State RegulationsNJ specificDifficulty 2/5
A small New Jersey employer wants to change the benefit levels in its group health plan at renewal. Under the structure of group health coverage, with whom does the employer deal, and what do enrolled members receive?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under the group structure of N.J.S.A. 17B:27-26 et seq., the employer is the policyholder, so benefit changes are negotiated between the group policyholder and the carrier and take effect through amendments to the master policy. Members do not negotiate individually; they receive updated certificates reflecting their rights under the revised contract. The New Jersey Department of Banking and Insurance supervises the amended forms in the carrier's group business.
Why the other options are wrong
- A) Members hold no individual policies to negotiate; the master contract is the vehicle for benefit changes.
- B) Trade associations are not parties to the insurance contract, and benefit changes do require documentation through the master policy and certificates.
- D) The department supervises but does not negotiate private contracts or mail policies to members.
Memory hook
Policyholder bargains, carrier amends, members get new certificates.