Horizon Blue Cross Shield of New Jersey officials at the Senate Budget and Appropriations Committee hearing Monday in Trenton. – (ANJALEE KHEMLANI)
Legislators advanced a bill Monday that could significantly increase the state’s control over the finances of its largest insurer, as well as set a precedent for businesses statewide.
The bill, introduced Friday by Sen. Joseph Vitale (D-Woodbridge), and amended Monday, cleared the state Senate’s Budget and Appropriations Committee.
If it becomes law, it would allow the state to have access to “excess” reserves of Horizon Blue Cross Blue Shield of New Jersey.
Vitale said the bill does not create “a slush fund” and is not a “money-grabbing” move. He said it establishes a “ceiling” for the reserves of Horizon, and anything beyond the ceiling would be “divested in a public way” to the state.
Currently, Vitale explained, there is only a range, or “floor,” within which Horizon keeps its reserves.
“We don’t want (Horizon)to be over-reserved. There is no benefit to the members if they are over-reserved,” Vitale said.
Horizon said it ended 2016 with a risk-based capital, or reserves ratio, of 620 percent, and it is incurring substantial losses in the individual market this year. It expects to end the year with an RBC under 590 percent, which is at the lower end of the 550-700 percent range established by regulators in Pennsylvania.
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