Individual Health Insurance Reform Act
The Individual Health Insurance Reform Act of 1992, often abbreviated as the "IHC Act" or "Reform Act," is a law in New Jersey that requires insurance carriers to "play or pay" an assessment, in order to ensure the availability of affordable individual health care coverage. Individual health care coverage is defined as insurance coverage offered by an insurance company or health maintenance organization directly to an individual and his family. The goal of the IHC Act was to reduce the number of uninsured self-employed or unemployed residents, many of whom lacked the option of purchasing employer-based or group health coverage.
The "play" part is for each insurance carrier to establish a target goal of individual policies, or specific "non-group" policies, that the carrier must issue in a calendar year if it wishes to obtain an exemption from the assessment (the "pay" alternative). In general, a carrier's target number of non-group policies for the exemption is calculated based on the carrier's proportion of the overall statewide health coverage market. See N.J.S.A. 17B:27A-12(d)(3). To the extent an insurance carrier does not "play", then it must "pay" an assessment to the State.
The IHC Act establishes a non-compensated, nine-member Board of Directors who "shall establish the policy and contract forms and benefit levels to be made available." N.J.S.A. 17B:27A-7. In 1993, the Board of Directors devised a program whereby state residents would be offered five standardized individual health plans. Insurance carriers were required to start offering the five plans on August 1, 1993.
- Health Maintenance Organization of New Jersey, Inc. v. Whitman, 72 F.3d 1123, 1124-26 (3d. Cir.1995).