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News Release

New Jersey Department of
Banking and Insurance


Commissioner Richard J. Badolato

For Immediate Release:
September 12, 2016

For Further Information:
Marshall McKnight (609) 292-5064


Department Files for Rehabilitation of
Health Republic Insurance of New Jersey

Plan has Consumers Keeping Their Policies until Year End;
No Disruption to Medical Care; Providers Will be Paid

TRENTON — New Jersey Department of Banking and Insurance Commissioner Richard J. Badolato today announced that Freelancers Consumer Operated and Oriented Program of New Jersey, doing business as Health Republic Insurance of New Jersey (HRINJ), has consented to be placed in rehabilitation due to its deteriorating financial condition. If approved by the court, the rehabilitation will enable the Department to preserve the assets of the carrier so that consumers continue to receive the care to which they are entitled and medical providers are paid.

Under this rehabilitation plan, current policies will remain in force through December 31, 2016, but the carrier will not offer coverage for 2017. The Department and the carrier will advise individual consumers and small employers with HRINJ policies on how to secure new coverage for 2017.

This plan is in response to HRINJ’s hazardous financial condition, arising in part from a liability of $46.3 million under the Affordable Care Act’s Risk Adjustment program.

“Our first priority in working with HRINJ under the anticipated order of rehabilitation will be to ensure that all HRINJ members and providers receive the service and payment promised them under the terms of their health insurance plans,” said Commissioner Badolato. “We will also be assisting individual consumers as they transition to a new plan during the open enrollment period this fall. Similarly, we will work with small employers as they seek replacement plans for their businesses.”

The Department has worked diligently with the company over an extended period to protect policyholders and medical providers as HRINJ conducted its operations.

“Leadership at HRINJ remains committed to its members and medical providers and will work closely with DOBI under the order of rehabilitation,” said Health Republic of New Jersey Interim CEO Tom Dwyer. “Despite our hard work and growing customer base, the unfortunate necessity for complying with the ACA’s risk adjustment mandate has put the company under considerable financial strain.”

Rehabilitation of HRINJ will allow the Department to stabilize the company while measures to strengthen its financial condition can be pursued, in anticipation of a potential return to the marketplace in 2018.  

Impact to policyholders:

Individual Health Care policyholders (26,000 members)

  • All individual plan members will be fully covered through the end of the 2016 plan year which ends December 31, 2016.
  • During open enrollment for the 2017 plan year, which runs from November 1 through January 31, 2017, individual plan members should choose a plan from a different carrier because HRINJ plans will no longer be offered.

Small Employer Health policyholders (9,000 members)

  • All existing HRINJ small employer policies will be terminated effective December 31, 2016 regardless of the termination date in their policies;
  • As open enrollment restrictions do not apply to small employers, small employers will be able to select a replacement small employer policy from a new carrier at any time;
  • The Department immediately will work with HRINJ, small employers and licensed producers to help small employers find new coverage effective January 1, 2017.

Individual and small employer policyholders must continue to pay monthly premiums in order for coverage to remain in effect. To expedite claims processing, providers are encouraged to submit bills promptly and no later than 60 days of the date of service. HRINJ will continue to pay claims.

The not-for-profit HRINJ began offering health insurance policies in New Jersey in 2014. In the first quarter of 2016, HRINJ held a 7.34% share in the state’s Individual Health Coverage (IHC) market and a 2.1% market share in the Small Employer Health (SEH) sector.

For additional information regarding their existing health insurance policies, HRINJ consumers should contact HRINJ or their agent directly. For more information regarding the order of rehabilitation, consumers may go online to Frequently Asked Questions or http://www.state.nj.us/dobi/index.html, or call the Department at 1-800-446-7467 or 609-292-7272.

To make an inquiry or file a written complaint with the Department, consumers may go online at http://www.state.nj.us/dobi/consumer.htm or call the Department for additional information on the complaint process.

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