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State Exchange Profiles: New Jersey

New Jersey

Updated as of December 10, 2012

Establishing the Exchange 

On December 7, 2012, Governor Chris Christie (R) vetoed A 3186/S 2135, which would have established a health insurance exchange within the Department of Banking and Insurance and announced that the state would default to a federal exchange.1Governor Chris Christie (R) vetoed similar legislation earlier in 2012.2

In 2011, the New Jersey Interagency Working Group on the ACA, led by the Health Care Policy Advisor to the Governor, had contracted with Rutgers University’s Center for State Health Policy to assist in the planning effort. In December 2011, the Center for State Health Policy released a summary of a multi-stakeholder forum convened to examine governance options for a New Jersey exchange.3 The results of the forum build on the Center’s compilation of stakeholder views of a state-based exchange released in August 2011.4 Though there was agreement that the state should establish an exchange, there was less consensus around the composition of the governing board and whether the exchange should be an active purchaser or clearinghouse.5

At the same time, the New Jersey Department of Banking and Insurance and the Robert Wood Johnson Foundation funded the Center for State Health Policy, in collaboration with Seton Hall University School of Law, to examine critical exchange design issues. The Center, completed a policy analysis of governance options and released a report recommending that New Jersey establish an exchange as a government agency, overseen by a Board of Directors with seven to nine members, and guided by insight from a larger advisory board.6 The Center released several additional reports on numerous topics: merging the non-group and small-group risk pools, establishment of a defined contribution strategy in the Small Business Health Options Program (SHOP) exchange, incorporating quality measures into exchange ratings of health plans, creation of Basic Health Plan in New Jersey, background information related to selection of an Essential Health Benefits plan, and prevention of adverse selection.7,8,9,10,11,12 The Center has also collaborated with Seton Hall University on a number of studies, including an assessment of the ACA’s impact on health coverage of New Jersey residents, an evaluation of federal and state regulation of rating factors, a comparison of the clearinghouse versus active purchaser model, and an investigation into eligibility and enrollment issues related to an exchange and Medicaid.13,14,15,16

Essential Health Benefits (EHB): The ACA requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. Since New Jersey has not put forward a recommendation, the state’s benchmark EHB plan will default to the largest small-group plan in the state, Horizon Blue Cross Blue Shield- HMO Access.

Exchange Funding

The New Jersey Department of Banking and Insurance received a federal Exchange Planning grant of $1 million in 2010. On February 22, 2012, the Department of Banking and Insurance also received a Level One Establishment grant of $7.7 million to address gaps in information technology and to continue the planning efforts and policy analysis of issues such as reinsurance, projected plan cost and utilization, standards for plan management, and the essential health benefits.17

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in New Jersey beginning in 2014.


1. A 3186/S 2135. New Jersey Health Benefit Exchange Act of 2012.http://www.njleg.state.nj.us/2012/Bills/A3500/3186_R1.PDF
2. A 2171. New Jersey Health Benefit Exchange Act of 2012.http://www.njleg.state.nj.us/2012/Bills/A2500/2171_R2.PDF
3. “Summary of Proceedings. Stakeholder Forum to Discuss Governance Options for a New Jersey Health Insurance Exchange.” Rutgers Center for State Health Policy. December 2011.http://www.cshp.rutgers.edu/Downloads/9160.pdf
4. Cantor J, et al. “Stakeholder Views about the Design of Health Insurance Exchanges for New Jersey: Volumes I, II, and II.” Rutgers Center for State Health Policy. August 2011.http://www.cshp.rutgers.edu/Downloads/8980.pdf,http://www.cshp.rutgers.edu/Downloads/9000.pdfhttp://www.cshp.rutgers.edu/Downloads/8990.pdf
5. Fitzgerald B. “Countdown to NJ’s Health Insurance Exchange.” NJSpotlight. January 3, 2012.http://www.njspotlight.com/stories/12/0103/0316/
6. Jacobi J. “Health Insurance Exchanges: Governance Issues for New Jersey.” Rutgers Center for State Health Policy. September 2011. http://www.cshp.rutgers.edu/Downloads/9020.pdf
7. Cantor J. “Combining New Jersey’s Individual and Small Group Health Insurance Risk Pools. Rutgers Center for State Health Policy. December 2011.http://www.cshp.rutgers.edu/Downloads/9140.pdf
8. Chou J, et al. “Examining a Defined Contribution Strategy in the SHOP Exchange.” Rutgers Center for State Health Policy. December 2011. http://www.cshp.rutgers.edu/Downloads/9130.pdf
9. Michael M and Gaboda D. “Incorporating Quality Measures in Health Insurance Exchange Ratings of Health Plans. Rutgers Center for State Health Policy. December 2011.http://www.cshp.rutgers.edu/Downloads/9150.pdf
10. Gaboda D and Farnham J. “The Basic Health Plan Option in New Jersey.” Rutgers Center for State Health Policy. December 2011. http://www.cshp.rutgers.edu/Downloads/9120.pdf
11. Greenwood K, Ragone TA, Jacobi JV. “Implementing the Essential Health Benefits Requirements in New Jersey; Decision Points and Policy Issues.” Rutgers’ Center for State Health Policy and Seton Hall’s Center for Health and Pharmaceutical law and Policy. August 2012.http://www.cshp.rutgers.edu/Downloads/9540.pdf
12. Canto J “Preventing Adverse Risk Selection in New Jersey’s Health Insurance Exchange and the Outside Individual and Small-Group Markets.” Rutgers Center for State Health Policy. August 2012. http://www.cshp.rutgers.edu/Downloads/9510.pdf
13. Cantor J, et al. “Health Insurance Status in New Jersey after Implementation of the Affordable Care Act.” Rutgers’ Center for State Health Policy and Seton Hall’s Center for Health and Pharmaceutical law and Policy. August 2011. http://www.cshp.rutgers.edu/Downloads/8970.pdf
14. Ragone TA. “Evaluating Federal and New Jersey Regulation of Rating Factors and Rating Bands. Rutgers’ Center for State Health Policy and Seton Hall’s Center for Health and Pharmaceutical law and Policy. August 2012. http://www.cshp.rutgers.edu/Downloads/9490.pdf
15. Jacobi J. “Active or Passive: The Role of a New Jersey Health Insurance Exchange.” Rutgers’ Center for State Health Policy and Seton Hall’s Center for Health and Pharmaceutical law and Policy. August 2012. http://www.cshp.rutgers.edu/Downloads/9530.pdf
16. Greenwood K. “The Health Insurance Exchange, the Medicaid program, and the Apportionment of Responsibility for Determining Eligibility and Effectuating Enrollment in New Jersey.” Rutgers’ Center for State Health Policy and Seton Hall’s Center for Health and Pharmaceutical law and Policy. August 2012. http://www.cshp.rutgers.edu/Downloads/9500.pdf
17. U.S. Department of Health and Human Services Factsheet. “Creating a New Competitive Marketplace: Health Insurance Exchange Establishment Grants Awards List.” (Accessed February 22, 2012) http://www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html