New Jersey one of only two states to pay health benefits exchange board members

TRENTON – Of the states that have already adopted a state health benefits exchange, New Jersey is one of just two that plans to pay members of the exchange’s board, a State Street Wire survey has found.

And at $50,000 per year, the proposed salary here dwarfs the $30 per workday officials in Oregon will earn.

The inclusion of the salary in the bill, A2171, which originally called for members to “serve without compensation,” has at least some lawmakers wondering if the new board will become a home for patronage appointments.

The health exchange’s board of directors will be comprised of eight members, including the commissioners of the Department of Banking and Insurance, Human Services, and the head of the exchange’s Advisory Committee.  The other five “public members” are appointed by the governor, with recommendations by the Senate President and Assembly Speaker, and would serve between three and five years. The three non-public members would not receive compensation.

While state legislators defended the salaries, not all states agree with the logic. As of March 1, 13 states and the District of Columbia have established health insurance exchanges, according to the Kaiser Family Foundation. Of those, only Oregon plans to compensate members of the board.

The Beaver State will pay board members $30 per workday and reimburse their members no more than $25 for expenses, according to Lee Goldberg of the National Association of Social Insurance.

Both of the health benefit exchanges in Vermont and Utah don’t have directors’ boards.  Officials from both states said their respective advisory boards do not receive any money. 

Most of the states, however, do reimburse the board members for expenses related to their roles on the board, based on a review of state legislation.

Arizona, which is still in the process of implementing its exchange, is comparatively close-fisted, in that, according to legislation, “exchange board members are not eligible for compensation or reimbursement.”

If A2171 is signed as is, New Jersey would also provide such reimbursements to its members, in addition to their salaries.

Despite the trend in other states, the sponsors of the New Jersey health insurance exchange say board members will have their work cut out for them to get the program up and running within a couple of years.

“This is a very intensive process,” Sen. Nia Gill said following the vote. “The members will have to commit a lot of time toward this and it’s important to have highly qualified individuals (in helping to create the exchange).”

She added that New Jersey, like Maryland, could receive millions of dollars in grants from the federal government to help implement the exchange,

Assemblyman Herb Conaway, (D-7), of Delran, who sponsored A2171 and is a doctor by trade, said the decision to compensate the board members came after hearing testimony from people who are involved in the health insurance business. He said that since the board members would not be allowed to work in the health and insurance fields for some time after leaving the board, it seemed fair to pay them.

Both Gill and Conaway added that the board members would not receive any benefits.

“There’s a tremendous amount of work involved, and coordination between the different agencies,” Conaway said. “It’s a small price to pay for the high-quality workflow. The caliber of a person that will serve on the board of directors will be high and should be compensated.”

But at least one Republican lawmaker, Sen. Robert Singer, (R-30), of Jackson, said it will only expand state government at a time when taxpayers want to see it shrink. He, like all other Republicans at the last session, voted no.

“It’s a way of creating another bureaucracy,” he said. “There’s enough boards out there. We can get volunteers.”

At a time when there’s more scrutiny than ever on agencies that have been notorious for patronage, such as the Port Authority of New York and New Jersey and the Passaic Valley Sewerage Commissioners, Singer said the board could also become a den of cronyism.

“It will become a political giveaway,” Singer said. “The next thing they will do is provide benefits.”

Many Republicans say the state’s adoption of the exchange is premature.

The federal health insurance law is being reviewed by the Supreme Court, and will hear oral arguments about the individual mandate portion of the law, starting on March 26.

In addition to the paid board of directors, the bill also calls for a 15-member advisory committee who would not be compensated but would be reimbursed for expenses. The members of the advisory board would represent a variety of stakeholders, health insurance companies, health corporations, hospitals, long-term care facilities, small employers, nurses, public employee groups, consumer advocates, among others.

The goal of the health insurance exchange is to provide a one-stop shop for affordable health care plans to individuals and small businesses. The exchanges will certify health plans that it “determines (to) provide good value and offer high quality coverage to enrollees.”

The exchanges will help employers enroll their workers into plans they choose from the exchange. A standard application would be designed to help applicants with receiving their benefits.

Each state designs its own exchange where residents can compare the different plans that are offered. The original deadline for all states to set up such exchanges is Jan. 1, 2014.

Health benefit exchanges are one of the main aspects of the health insurance law signed by President Obama in March 2010. Formally known as Patient Protection and Affordable Care act, critics have dubbed it “Obamacare.”

Jeff Brown of New Jersey Citizen Action said that its members didn’t actively lobby for the salary, adding it was mostly concerned with preventing conflicts of interest between members on the board and their line of work.

However, the group supported the amended bill that includes salaries for the board of directors.

“This board will have a lot of work to do in the beginning,” he said

He added that other boards, such as the Board of Public Utilities, are compensated.

Brown said he is pleased with the conflict of interest language that is in the bill. The legislation states that the exchange board members or employees could not be employed with health care or insurance companies during their time with the exchange or for two years after it.

New Jersey one of only two states to pay health benefits exchange board members