State
State Health Benefits Program Plan Design Committee Meets
Yesterday, the State Health Benefits Program (SHBP) Plan Design Committee met and the members were given an Overview of the Rate Setting Environment by AON, a risk management firm assisting the SHBP. AON’s overview offered a number of reasons for the 21.6% projected 2023 premium increase, including utilization/COVID-19, inflation, and lack of anticipated program savings. Specific cost drivers for local government are:
- 8.1%: Actual 2021 claims experience was higher compared to expected 2021 claims.
- While significant increases to member utilization in 2021 were anticipated because of COVID-19’s impact on 2020, actual utilization appears to be even higher, with utilization trends of 26.5% for Outpatient visits, 18.2% for Professional visits, 16.4% for Specialist visits, 17.0% for Emergency Room, and 38.0% for Urgent Care.
- The 2022 rate setting analysis included estimated vendor reported savings in 2021 for Horizon’s Navigation Advocacy program as well as third-party vendor point solutions. Savings for these programs are now assumed to be in the underlying 2021 claims experience.
- Actual 2021 prescription drug claims experience trend was 3.7%, lower than expected.
- 3.5%: The 2022 rate setting analysis included an additional 3.0% medical claims savings in Plan Year 2022, as well as additional projected savings for the third-party vendor point solutions. The savings attributable to these programs have been mostly removed in the updated projections.
- 7.6%: Annual medical and Rx trend projection assumptions have increased from the prior renewal analysis as a result of wide economic inflationary pressures on medical trends, expected increases in specialty drug trend costs and utilization, and an additional year of trend to 2023.
- -1.5%: Impact of increases in projected rebates.
- 0.5%: Impact of other changes including changes in plan migration assumptions, and changes in administrative fees.
- 2.0%: Additional 2023 premium margin.
As of this writing, the SHBP has not rescheduled the Rate Renewal Meeting that was canceled on July 25.
In addition, at the request of several municipalities, we have prepared a sample resolution opposing the proposed increases to the State Health Benefits Program and calling for the SHBC membership to include representatives from both local and county government.
We encourage you to review the presentation and reach out to the Governor’s office and your legislators to share your concerns about this large increase and its effects on municipal budgets.
Contact: Lori Buckelew, Deputy Executive Director & Director of Government Affairs, lbuckelew@njlm.org, 609-695-3481, x112.
Governor Signs Law Requiring Municipalities to Create Business Insurance Registry
Last Friday, Governor Murphy signed into law S-1368 requiring all business owners and owners of multifamily rental units to maintain certain levels of liability insurance. In addition, the new law requires that all business owners and owners of multifamily rental units annually register a certificate of insurance with the municipality where the business or rental unit is located.
The State does not make an appropriation for the cost municipalities are sure to incur to enforce its policy. A municipality is, however, authorized to charge a reasonable administrative fee for the certificate of registration. The law also does not provide any additional details or guidance to municipalities on what a certificate of insurance should contain.
When initially introduced, this legislation required the State Department of Community Affairs to act as the enforcement agent for this measure. However, last-minute amendments made shortly before both houses voted on the measure placed the onus on individual municipalities to enforce this state-mandated policy. The League did notify the sponsors and the Governor’s Office of our concerns.
The requirement for business owners and multifamily unit owners to register with the municipality becomes effective in 90 days. Please review this new law with your municipal attorney, business administrator, and clerk for more information.
Contact: Frank Marshall, Esq., Associate General Counsel, fmarshall@njlm.org, 609-695-3481, x137.
DEP Issues Statewide Drought Watch
After weeks of very little precipitation, New Jersey Commissioner of Environmental Protection Shawn LaTourette issued a statewide drought watch as of August 9. The administration is urging residents and businesses to conserve water as persistent dry and hot conditions continue to stress water supplies throughout the state.
A drought watch is the first in the State’s three-stage drought advisory system. The declaration of a drought watch does not impose any mandatory restrictions on water use, but instead is meant to sow awareness and appreciation of the stress upon water supply sources and encourage voluntary water conservation measures. If conditions do not improve, a declaration of a drought warning or drought emergency may be issued, which would bring about mandatory water use restrictions.
For additional information on the status of New Jersey’s water supplies, please visit the NJ Department of Environmental Protection’s website, where you can also find information regarding water conservation efforts.
Contact: Frank Marshall, Esq., Associate General Counsel, fmarshall@njlm.org, 609-695-3481, x137.
County and Municipal Airport Financial Law Changes
On August 5, Governor Murphy signed into law legislation that authorizes a county that acquires, establishes, and operates an airport to maintain, operate, and manage the airport as a public utility. In addition, the new law clarifies that counties and municipalities must follow the Local Bond Law when issuing bonds for airport purposes. P.L. 2022, c. 93 took effect immediately.
Contact: Lori Buckelew, Deputy Executive Director & Director of Government Affairs, lbuckelew@njlm.org, 609-695-3481, x112.
Federal
Register for Federal Infrastructure Grant Application Bootcamp
The National League of Cities (NLC), the League’s federal partner, in conjunction with Bloomberg Philanthropies, has announced a
Local Infrastructure Hub Grant Application Bootcamp for municipalities with a population less than 150,000 to access federal infrastructure dollars.
The
application process is now open and closes on August 31.
Towns and cities participating in these programs will receive support from NLC to develop a robust federal grant application, including access to subject matter experts, individualized coaching sessions, office hours, and peer-to-peer learning, as well as tools including templates, example submissions, and white papers. The technical assistance program will last approximately 3-4 months and participants will include mayors and municipal staff with job functions focused on finance, community engagement, and other relevant disciplines.
Over the next two years, there will be at least 30 bootcamps, each tied to a specific category of funding available as part of the Bipartisan Infrastructure Law. The first five offerings that will be available this fall will focus on the following grant categories:
This is a great opportunity for municipalities to learn best practices to obtain federal funding. We encourage you to register and participate.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.
ARP Project & Expenditure Reporting to DLGS
If you are among the municipalities that have yet to file your American Rescue Plan State and Local Fiscal Recovery Funds Project and Expenditure Report that was due on April 30, please be advised that the Division of Local Government Services (DLGS) has been raising this issue when reviewing applications before the Local Finance Board.
At this week’s Local Finance Board meeting, DLGS Director Jacquelyn Suarez advised delinquent municipalities to share the reasons for the lack of filing with DLGS.
Working with the National League of Cities, the League’s federal partner, we have helped many municipalities with technical issues so they are able to properly file the April 30 Project & Expenditure report. If you are having issues submitting your report please contact Paul Penna, Senior Legislative Analyst, at ppenna@njlm.org.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.
President Signs CHIPS and Science Act
On Tuesday, August 9, President Joe Biden signed H.R. 4346, the CHIPS and Science Act, into law. In addition to authorizing funding for research and innovation programs, the law appropriates a total of $54.2 billion to support domestic semiconductor manufacturing, research and development, semiconductor workforce development, international information and communications technology security and semiconductor supply chain activities, and advanced wireless communication technologies. The law also establishes a 25% tax credit for investments in semiconductor manufacturing, including the manufacturing of specialized equipment required for semiconductor manufacturing.
Included in the CHIPS and Science Act is a $10 billion authorization to invest in regional innovation and technology hubs across the country, bringing together state and local governments, institutes of higher education, labor unions, businesses, and community-based organizations to create regional partnerships for the development technology, innovation, and manufacturing sectors.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.
Inflation Reduction Act Activity
This past weekend, the U.S. Senate utilized the chamber’s reconciliation rules to pass the Inflation Reduction Act, along a party line vote of 51-50, with Vice President Kamala Harris casting the tie-breaking vote.
On Wednesday, the House of Representatives Committee on Rules passed the parameters for the House’s consideration of this legislation on Friday.
The majority of the provisions in the act concerns mitigating the effects of climate change, health policy, increased enforcement by the Internal Revenue Services (IRS), and increases in government revenue.
Not included in the package was any consideration of a change to the $10,000 State and Local Taxes (SALT) deduction cap. Public comments indicate that its exclusion will not preclude support from New Jersey congressional members who have previously indicated that the deduction cap removal must be included in the legislation.
For more information on the legislation, please read the League’s recent blog post.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.
U.S. Treasury Releases ARPA SLFRF Affordable Housing Guidance
The U.S. Department of the Treasury recently announced How-to Guidance on increasing the ability of state, local, and tribal governments to use American Rescue Plan (ARP) State and Local Recovery Fiscal Recovery Fund (SLFRF) payments to boost the supply of affordable housing in their communities.
There are two options outlined in the guidance.
For the first option, SLFRF funds used for affordable housing projects under the PH-NEI eligible use category are presumptively eligible if the project meets certain core requirements of an expanded list of federal housing programs
For the other alternative, SLFRF funds used for affordable rental housing under the PH-NEI eligible use category are presumptively eligible uses if the units funded serve households at or below 65% of Average Median Income (AMI) for a period of 20 years or greater.
SLFRF funds can now be used to fund the full principal amount of certain loans that finance long-term affordable housing investments. Among other requirements, the loans must have maturity and affordability covenants of 20 years or longer, including but not limited to loans that fund low-income housing tax credit (LIHTC) projects.
We encourage you to review this material with your Municipal Administrator.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.
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