NJ Will Require Health Benefit Plans Cover Abortion Services

The New Jersey Department of Banking and Insurance (NJ DOBI) recently released a study
on access to reproductive health care in NJ that found “there is a need for greater transparency and consistency regarding health coverage for abortion
[…and…] a need for a clear regulation to provide for abortion coverage under state-regulated health benefits plans…”.

On January 13, 2022, Governor Murphy signed the Freedom of Reproductive Choice Act, which recognizes the right to reproductive choice as a “fundamental right enshrined in the State Constitution.”

The Freedom of Reproductive Choice Act, or “The Act,” found that the constitutional right to reproductive health choices includes the rights to:

• “determine whether and when to bear children”
• “access contraception, including emergency contraception”
• “not be denied public benefits based on the choice to have additional children”
• “choose to terminate a pregnancy; and may choose to carry a pregnancy to term”

With regard to health insurance coverage, The Act directed the DOBI to conduct a study and issue a report on access to reproductive health care in New Jersey, after which the Department “may direct health benefit plans to provide coverage for abortion services.”

“The results of the Department of Banking and Insurance’s study confirm what we have long known to be true – that rights without access mean nothing,” said Governor Murphy. “In light of the study’s findings, the Department has begun the process of establishing a requirement that will ensure access to abortion services without exceptions limiting coverage. I applaud the health benefits boards for beginning the process for earlier implementation of this requirement and encourage them to vote to finalize the earlier date to ensure more of our residents can access the care they both need and deserve as soon as possible.”

Under the rules process in the Administrative Procedures Act, the requirement could take effect next plan year, on January 1, 2024. However, the department requested that insurance companies in the individual market, which include those offering plans through Get Covered New Jersey, the State’s Official Health Insurance Marketplace, off-marketplace, and the small employer market, implement the change as soon as possible to make coverage for abortion services, without exceptions, effective for the start of the 2023 plan year on January 1, 2023.

At the department’s request, the Individual Health Coverage Program board voted on November 30, 2022, to propose the change, thus beginning the process of implementing the change. The Small Employer Health Program board also voted yesterday to begin the process.

After a 20-day public comment period, both boards are expected to hold a final vote in late December to adopt the change to make the requirement effective January 1, 2023.

Currently, health insurance coverage for abortion services in the regulated markets is neither explicitly prohibited nor required by state or federal law. However, in the most regulated markets, the individual and small employer markets, all carriers currently provide some type of coverage for abortion. Carriers in these markets may opt to limit such coverage to cases of rape, incest, or the life of the woman.

The department’s study found that requiring insurance coverage for abortion, without exceptions that limit coverage, will not increase premiums in any material way, contributes to access to the full range of reproductive healthcare, increases transparency, and would be consistent with actions taken in other states.

As part of its study pursuant to the Act, the Department requested specific information and conducted an analysis of available data on the cost and possible impacts to insurance coverage if coverage for abortion was required in the regulated markets.

Carriers in the individual and small employer markets in New Jersey were asked to provide the impact of covering all abortions as part of their 2023 rate filings. Carriers estimated a range of zero impact to .1% of the premium. Therefore, enacting an abortion coverage requirement would not be expected to materially impact insurance rates in the regulated markets.

The Act also recognizes the right of certain religious employers to request an exclusion under a health insurance contract if the required coverage conflicts with the religious employer’s bona fide religious beliefs and practices. Therefore, the regulation proposed by the department would incorporate such an exception.

In preparation for the study, the Department accepted public comments on access to comprehensive reproductive care, coverage of reproductive services, and related health impacts. In response, hundreds of comments were submitted and reviewed by the Department.

The State of New Jersey has regulatory authority over certain health insurance markets. Specifically, the department regulates the individual, small employer, and fully-insured large employer health insurance markets often referred to as the “regulated markets.” The individual market includes plans offered on the marketplace, through Get Covered New Jersey, the State’s Official Health Insurance Marketplace, and off-marketplace.

The department began the regulatory process on November 23rd to advance the requirement that state-regulated plans cover abortion services without exceptions that limit coverage. Beginning the advance notice process makes public and seeks comment for a 60-day period on the proposal prior to its publication in the New Jersey Register.

Simultaneously, the Individual Health Coverage and Small Employer Health Benefits Program boards are moving forward with implementing the requirement for the individual and small employer markets, effective January 1, 2023. The requirement would take effect in the large employer market after the rules process under the Administrative Procedure Act is completed in 2023.

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