Legislation aims to change the way insurance arrangements for employers work
Controversial legislation in New Jersey has managed to speed its way through the state’s Legislature, but has encountered an legislative hurdle that may be difficult to overcome. The legislation, called A3421, is designed to create incentives for businesses to band together in order to offer health insurance policies through self-funded Multiple Employer Welfare Arrangements. Critics of the legislation suggest that this is a way for employers to charge more for the coverage they sponsor for older workers.
Companies in insurance arrangements could charge older workers more for their insurance coverage
The legislation allows self-insurance organizations, which are typically set up by businesses, to be free from the limitations that had been placed upon them concerning what they could charge for coverage held by certain demographics. Current state law allows companies in insurance arrangements to base their rates on age and gender, but they are unable to charge more than twice as much for this coverage as their least expensive policies. The new legislation would allow these companies to charge much more for coverage based on the age of a policyholder.
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Some suggest that the bill will be good for the insurance market
Advocates of the legislation suggest that it would result in inexpensive insurance policies for young and healthy workers. This is because older workers that are more likely to get sick or have chronic health conditions would be paying more for coverage. Opponents of the legislation suggest that companies in insurance arrangements would be able to charge whatever they want for health insurance coverage that is being provided to their older workers.
Politicians begin the long battle over controversial legislation
The legislation is currently locked in a political fight within the New Jersey Legislature. Those supporting the bill claim that it will provide more options for those seeking health insurance coverage, while also making the state’s insurance exchange somewhat more attractive. Critics, however, claim that the legislation is an affront to the Affordable Care Act, whose provisions ensured that insurers could not charge whatever they wanted for coverage based on a person’s age, gender, medical condition.