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Bill

A 5330

Permits Director of Division of Pensions and Benefits to initiate temporary transfer of funds in certain circumstances.

2026-2027 Regular Session Introduced by Verlina Reynolds-Jackson and 2 co-sponsors

The bill allows temporary transfers from the retiree health fund to cover up to 30 days of active fund payments when shortfalls occur, with mandatory repayment and oversight.

Approved P.L.2026, c.28.
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Bill Summary · A 5330

Summary of Bill A 5330 (Session 222) – New Jersey

Purpose and intent

This bill creates a funding mechanism to prevent shortfalls in the School Employees’ Health Benefits Program (SEHBP) for active education employees and their dependents. If the SEHBP health benefits fund runs low (below an amount to cover 10 days of anticipated payments), the Director of the Division of Pensions and Benefits may temporarily transfer funds from the retiree health benefits fund to the active employees’ fund. The goal is to ensure timely payment of health benefits during cash-flow gaps and to provide a clear process for monitoring and repayment.

Key provisions and changes

  • Trigger for transfers (new section 2a):

    • A temporary transfer may be initiated when available funds in the active education retiree/benefits fund fall to a level insufficient to cover 10 days of anticipated payments for the active education fund. Anticipated payments are based on a six-month average for medical, prescription, and dental expenses, plus other payments due in the next 30 days.

  • Transfer amount and source:

    • The Director may transfer up to enough to cover 30 days of anticipated payments for the active fund (including premiums, claims, and other charges).

  • Repayment:

    • Transferred amounts must be reimbursed to the retiree fund (active retirees and dependents) from the active employee fund on or before the 120th day after the transfer, unless an extension is approved to ensure sufficient funding for active-employee claims.
    • In no case can the reimbursement be extended more than an additional 365 days.

  • Oversight and reporting:

    • The Director must provide the State Treasurer with a monthly accounting of transfers in the prior 30 days, the outstanding balance of all transfers, repayments received, and the current balance of the active fund.
    • The transfer is designed to be temporary and transparent, with ongoing monitoring to avoid disruption to benefits.

  • Existing SEHBP structure (section 39 amendments):

    • Reiterates and clarifies how employer premiums/charges are determined and funded, including collective negotiations considerations, employee contributions (1.5% of base salary for active employees starting upon the effective date of P.L.2010, c.2), and the establishment of the SEHBP fund and a dedicated claims subaccount.
    • Allows the third-party medical claims reviewer to operate in the best interests of the State and participants, and to share de-identified data for governance and quality improvements, while complying with HIPAA and other laws.

  • Effective date:

    • The act takes effect immediately upon enactment.

Who and what is affected

  • Active school employees and their dependents enrolled in SEHBP will be affected indirectly through the potential shifting of funds to cover short-term payment needs.
  • Retirees and dependents under the retiree health benefits fund may experience transfers out, with a defined repayment back to their fund.
  • State bodies involved: Division of Pensions and Benefits, School Employees’ Health Benefits Commission, and related committees and the State Treasurer will have enhanced reporting and oversight responsibilities.

Procedural and timeline aspects

  • Transfers can occur when the active fund falls below a 10-day coverage threshold.
  • Transfer amount capped to cover up to 30 days of anticipated payments.
  • Repayment required within 120 days, with possible extension up to 485 days total from transfer date.
  • Monthly reporting to the State Treasurer is required for all transfers, balances, repayments, and current fund status.
  • Immediate effect upon enactment.

Compiled from official sources — confirm details with the bill’s official record.

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