STATE OF NEW JERSEY
DEPARTMENT OF THE TREASURY
DIVISION OF PENSIONS AND BENEFITS
MEMBER HANDBOOK
FOR EMPLOYEES AND RETIREES
ENROLLED IN THE
STATE HEALTH BENEFITS PROGRAM
OR
SCHOOL EMPLOYEES' HEALTH BENEFITS PROGRAM
PLAN YEAR 2009
ADMINISTERED FOR THE DIVISION OF PENSIONS AND BENEFITS BY
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY
Use Table of Contents or PDF Bookmarks to navigate this Handbook
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STATE OF NEW JERSEY
DEPARTMENT OF THE TREASURY
DIVISION OF PENSIONS AND BENEFITS
NJ DIRECT
MEMBER HANDBOOK
FOR EMPLOYEES AND RETIREES
ENROLLED IN THE
STATE HEALTH BENEFITS PROGRAM OR
SCHOOL EMPLOYEES' HEALTH BENEFITS PROGRAM
PLAN YEAR 2009
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NJ DIRECT MEMBER HANDBOOK
i
TABLE OF CONTENTS
INTRODUCTION ...................................................................................................................1
NJ DIRECT ...........................................................................................................................2
HEALTH BENEFITS PROGRAM ELIGIBILITY ...................................................................3
ACTIVE EMPLOYEE ELIGIBILITY .................................................................................3
STATE EMPLOYEES .....................................................................................................3
LOCAL EMPLOYEES .....................................................................................................3
ENROLLMENT.................................................................................................................4
ELIGIBLE DEPENDENTS ...............................................................................................4
DEPENDENT ELIGIBILITY VERIFICATION AUDIT .......................................................6
MEDICARE COVERAGE WHILE EMPLOYED ...............................................................6
RETIREE ELIGIBILITY ...................................................................................................7
Aggregate of Pension Membership Service Credit ...................................................8
Eligible Dependents of Retirees ................................................................................ 9
Enrolling in Retired Group Coverage.........................................................................9
MEDICARE COVERAGE ................................................................................................ 9
Medicare Parts A and B.............................................................................................9
Medicare Part D.......................................................................................................10
Medicare Eligibility ...................................................................................................10
How to File a Claim If You Are Eligible for Medicare ...............................................11
GENERAL CONDITIONS OF THE PLAN ..........................................................................13
Medical Need and Appropriate Level of Care .........................................................13
Health Care Fraud ...................................................................................................13
PRECERTIFICATION OF BENEFITS IN-NETWORK AND OUT-OF-NETWORK ........14
NJ DIRECT SERVICES REQUIRING PRECERTIFICATION .......................................14
Predeterminati
on of Benefits ...................................................................................16
UTILIZATION MANAGEMENT .....................................................................................17
Reasonable and Customary Allowances .................................................................17
Experimental or Investigational Treatments ............................................................17
PLAN BENEFITS ................................................................................................................19
IN-NETWORK BENEFITS ............................................................................................19
Copayments ............................................................................................................19
ii NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
OUT-OF-NETWORK BENEFITS .................................................................................. 19
Deductible ............................................................................................................... 20
Coinsurance (Out-of-Network) ................................................................................ 20
OVERALL BENEFIT MAXIMUMS ................................................................................. 21
Mental Health Benefit Maximums ........................................................................... 21
COORDINATION OF BENEFITS .................................................................................. 21
GENERAL BENEFITS ........................................................................................................ 23
Acupuncture ............................................................................................................ 23
Alcoholism and Substance Abuse ........................................................................... 23
Allergy Testing and Treatment ................................................................................ 23
Ambulance .............................................................................................................. 24
Audiology Services .................................................................................................. 24
Automobile-Rel
ated Injuries .................................................................................... 24
Biofeedback ............................................................................................................ 24
Birthing Centers ...................................................................................................... 25
Blood ....................................................................................................................... 25
Breast Reconstruction ............................................................................................. 25
Chiropractic Services .............................................................................................. 25
Congenital Defects .................................................................................................. 25
Dental Care ............................................................................................................. 25
Diabetic Self-Management Education ..................................................................... 26
Dialysis .................................................................................................................... 27
Durable Medical Equipment and Supplies .............................................................. 27
Emergency Medical Services .................................................................................. 27
Urgent and After Hours Care ............................................................................... 27
Emergency Room ................................................................................................... 28
Federal Government Hospitals ............................................................................... 28
Gynecological Care and Examinations ................................................................... 28
Hearing Aids ............................................................................................................ 28
Hemophilia Treatment ............................................................................................. 28
Home Health Care .................................................................................................. 29
Hospice Care Benefits ............................................................................................ 29
Hospital-Based Weight Loss Programs ................................................................... 30
Immunizations ......................................................................................................... 30
NJ DIRECT MEMBER HANDBOOK
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Infertility Treatment ..................................................................................................30
Lead Poisoning Screening and Treatment ..............................................................32
Lithotripsy Centers ..................................................................................................32
Lyme Disease Intravenous Antibiotic Therapy ........................................................32
Mammography ........................................................................................................32
Mastectomy Benefits ...............................................................................................33
Maternity/Obst
etrical Care .......................................................................................33
Maternity/Obstetrical Care for Child Dependents ....................................................33
Mental or Nervous Conditions and Substance Abuse .............................................33
Nutritional Counseling (In-Network Only) ................................................................ 34
Occupational Therapy .............................................................................................34
Organ Transplant Benefits ......................................................................................34
Pain Management ...................................................................................................34
Pap Smears .............................................................................................................34
Patient Controlled Analgesia (PCA) .........................................................................35
Physical Therapy/Occupational Therapy .................................................................35
Physicals (In-Network Only) ....................................................................................35
Pre-Admission Hospital Review (In and Out-of-Network) .......................................35
Pre-Admission Testing Charges ..............................................................................35
Prostate Cancer Screening (In-Network Only) ........................................................35
Scalp Hair Prostheses .............................................................................................35
Second Surgical Opinion .........................................................................................36
Shock Therapy Benefits ..........................................................................................36
Skilled Nursing Facility Charges ..............................................................................36
Speech Therapy Benefit ..........................................................................................36
Surgical Services (Out-of-Network) .........................................................................36
Temporomandibular Joint Disorder (TMJ) and Mouth Conditions ...........................37
Vision Care Benefits ................................................................................................ 37
CHARGES NOT COVERED BY NJ DIRECT ................................................................ 38
THIRD PARTY LIABILITY .............................................................................................44
Repayment Agreement ...........................................................................................44
Recovery Right ........................................................................................................44
SUBROGATION AND REIMBURSEMENT ..................................................................44
WHEN YOU HAVE A CLAIM ........................................................................................45
Submitting a Claim (In-Network) .............................................................................45
iv NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
Submitting a Claim (Out-of-Network) ...................................................................... 45
Filing Deadline (Proof of Loss) ................................................................................ 45
Itemized Bills are Necessary ................................................................................... 46
Foreign Claims ........................................................................................................ 46
Filling Out the Claim Form ...................................................................................... 46
MEDICARE CLAIM SUBMISSION ................................................................................ 46
AUTHORIZATION TO PAY PROVIDER ....................................................................... 46
QUESTIONS ABOUT CLAIMS ..................................................................................... 46
APPEAL PROCEDURES ................................................................................................... 47
UTILIZATION REVIEW APPEAL .................................................................................. 47
CLAIMS APPEAL .......................................................................................................... 47
First Level Appeal ................................................................................................... 47
Second Level Appeal .............................................................................................. 47
Commission Appeal ................................................................................................ 48
PRESCRIPTION DRUG BENEFITS ................................................................................... 50
EMPLOYEE PRESCRIPTION DRUG PLAN ................................................................ 50
Plan Benefits ........................................................................................................... 50
PRESCRIPTION DRUG BENEFITS PROVIDED THROUGH NJ DIRECT .................. 51
RETIREE PRESCRIPTION DRUG COVERAGE .......................................................... 51
Medicare Part D ...................................................................................................... 52
COBRA COVERAGE ......................................................................................................... 53
CONTINUING COVERAGE WHEN IT WOULD NORMALLY END .............................. 53
COBRA Events ....................................................................................................... 53
Cost of COBRA Coverage ...................................................................................... 54
Duration of COBRA Coverage ................................................................................ 54
Employer Responsibilities Under COBRA ............................................................... 54
Employee Responsibilities Under COBRA .............................................................. 55
Failure to Elect COBRA Coverage .......................................................................... 55
Termination of COBRA Coverage ........................................................................... 56
APPENDIX I ........................................................................................................................ 57
SPECIAL PLAN PROVISIONS UNDER NJ DIRECT ......................................................... 57
WORK-RELATED INJURY OR DISEASE .................................................................... 57
MEDICAL PLAN EXTENSION OF BENEFITS ............................................................. 57
TERMINATION FOR CAUSE ....................................................................................... 57
NJ DIRECT MEMBER HANDBOOK
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APPENDIX II .......................................................................................................................59
SUMMARY SCHEDULE OF SERVICES AND SUPPLIES ...........................................59
ELIGIBLE SERVICES AND SUPPLIES ........................................................................59
COVERED SERVICES .................................................................................................59
APPENDIX III ......................................................................................................................65
GLOSSARY ..................................................................................................................65
APPENDIX IV .....................................................................................................................74
HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT .........................74
Certification of Coverage .........................................................................................74
HIPAA Privacy .........................................................................................................74
APPENDIX V ......................................................................................................................75
NOTICE OF PRIVACY PRACTICES ............................................................................75
Protected Health Information ...................................................................................75
Uses and Disclosures of PHI....................................................................................75
Member Rights ........................................................................................................76
Questions and Complaints ......................................................................................77
APPENDIX VI .....................................................................................................................79
HEALTH BENEFITS PROGRAM CONTACT INFORMATION......................................79
Addresses
................................................................................................................ 79
Telephone Numbers.................................................................................................79
HEALTH BENEFITS PROGRAM PUBLICATIONS........................................................80
General Publications................................................................................................ 80
Member Handbooks.................................................................................................81
An online version of this handbook containing current updates is available for viewing at:
www.state.nj.us/treasury/pensions/shbp.htm Be sure to check the Division of Pensions and
Benefits Internet home page at: www.state.nj.us/treasury/pensions for forms, fact sheets,
and news of any new developments affecting your health benefits.
vi NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
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NJ DIRECT MEMBER HANDBOOK
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INTRODUCTION
The State Health Benefits Program (SHBP) was established in 1961. It offers medical and
prescription drug coverage to qualified State and local government public employees,
retirees, and eligible dependents; and dental coverage to qualified State and local
government/education public employees, retirees, and their eligible dependents. Local
employers must adopt a resolution to participate in the SHBP.
The State Health Benefits Commission (SHBC) is the executive organization responsible for
overseeing the SHBP. The SHBC includes the State Treasurer as the chairperson, the
Commissioner of the Department of Banking and Insurance, the Chairman of the Civil
Service Commission, a State employee representative chosen by the Public Employees'
Committee of the AFL-CIO, and a local employee representative chosen by the Public
Employees' Committee of the AFL-CIO. The Director of the Division of Pensions and
Benefits is the Secretary to the SHBC.
The State Health Benefits Program Act is found in the New Jersey Statutes Annotated, Title
52, Article 17.25 et.seq. Rules governing the operation and administration of the program
are found in Title 17, Chapter 9 of the New Jersey Administrative Code.
The School Employees' Health Benefits Program (SEHBP) was established in 2007. It
offers medical and prescription drug coverage to qualified local education public employees,
retirees, and eligible dependents. Local education employers must adopt a resolution to
participate in the SEHBP.
The School Employees' Health Benefits Commission (SEHBC) is the executive organization
responsible for overseeing the SEHBP. The SEHBC includes the State Treasurer, the
Commissioner of the Department of Banking and Insurance, an appointee of the Governor,
an appointee from New Jersey School Board Association, three appointees from New
Jersey Education Association, an appointee from New Jersey State AFL-CIO, and a
chairperson appointed by the Governor from nominations submitted by the other members
of the commission. The Director of the Division of Pensions and Benefits is the Secretary to
the SEHBC.
The School Employees' Health Benefits Program Act is found in the New Jersey Statutes
Annotated, Title 52, Article 14-17.46 et.seq. Rules governing the operation and
administration of the program are found in Title 17, Chapter 9 of the New Jersey
Administrative Code.
The Division of Pensions and Benefits, specifically the Health Benefits Bureau and the
Bureau of Policy and Planning, is responsible for the daily administrative activities of the
SHBP and the SEHBP.
Every effort has been made to ensure the accuracy of the NJ DIRECT Member Handbook;
which describes the benefits provided in the contract with Horizon BCBSNJ. However, State
law and the New Jersey Administrative Code govern the SHBP and SEHBP. If there are any
discrepancies between the information presented in this booklet and/or plan documents and
the law, regulations, or contracts, the law, regulations, and contracts will govern.
Furthermore, if you are unsure whether a procedure is covered, contact your plan
before you receive services to avoid any denial of coverage issues that could result.
If, after reading this booklet, you have any questions, comments, or suggestions regarding
this material, please write to the Division of Pensions and Benefits, PO Box 295, Trenton, NJ
08625-0295, call us at (609) 292-7524, or send an e-mail to: pensions.nj@treas.state.nj.us
2 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
NJ DIRECT
Except where identified, the NJ DIRECT benefits described in this member handbook
are identical for SHBP and SEHBP members.
NJ DIRECT is administered for the Division of Pensions and Benefits by Horizon Blue Cross
Blue Shield of New Jersey (Horizon BCBSNJ).
NJ DIRECT provides both in-network and out-of-network benefits.
• In-network care is provided through a network of providers which includes
internists, general practitioners, pediatricians, specialists, and hospitals. Network
providers offer a full range of services that include well-care and preventive
services such as annual physicals, well-baby/well-child care, immunizations,
mammograms, annual gynecological examinations, and prostate examinations.
In-network services are generally covered in full after a member copayment.
Most in-network hospital admissions are covered in full. For in-patient mental
health hospitalization information see page 33.
• Out-of-network benefits provide reimbursement for expenses for eligible
services rendered for the treatment of illness and injury. Most out-of-network care
is usually reimbursed at a percentage of the reasonable and customary
allowance after an annual member deductible is met, see page 20. Under the
SHBP, out-of-network hospital admissions are subject to a separate $200.00
deductible per admission.
NJ DIRECT is self funded. Funds for the payment of claims and services come from funds
supplied by the State, participating local employers, and members.
Refer to page 79 for additional information on contacting NJ DIRECT, the Division of
Pensions and Benefits, and related health services.
NJ DIRECT MEMBER HANDBOOK
3
HEALTH BENEFITS PROGRAM ELIGIBILITY
ACTIVE EMPLOYEE ELIGIBILITY
Eligibility for coverage is determined by the State Health Benefits Program (SHBP) or
School Employees' Health Benefits Program (SEHBP). Enrollments, terminations, changes
to coverage, etc. must be presented through your employer to the Division of Pensions and
Benefits. If you have any questions concerning eligibility provisions, you should contact
the Division of Pensions and Benefits' Office of Client Services at (609) 292-7524. or send
e-mail to: pensions.nj@treas.state.nj.us
STATE EMPLOYEES
To be eligible for State employee coverage, you must work full-time for the State of New
Jersey or be an appointed or an elected officer of the State of New Jersey (this includes
employees of a State agency or authority and employees of a State college or university).
For State employees, full-time normally requires 35 hours per week.
The following categories of State employees are also eligible for coverage in NJ DIRECT15.
State Part-Time Employees — Part-time employees of the State and part-time faculty at
institutions of higher education that participate in the SHBP are eligible for NJ DIRECT15
coverage if they are members of a State-administered pension system. The employee or
faculty member must pay the full cost of the coverage. Part-time employees will not qualify
for employer or State-paid post-retirement health care benefits, but may enroll in retired
group coverage at their own expense provided they were covered by NJ DIRECT15 up to
the date of retirement. See Fact Sheet #66 , Health Benefits Coverage for Part-Time
Employees, for more information.
State Intermittent Employees — Certain intermittent State employees who have worked
750 hours in a Fiscal Year (July 1 - June 30) are eligible for coverage under NJ DIRECT15.
Intermittent employees who maintain 750 hours of work per year continue to qualify for
coverage in subsequent years. See Fact Sheet #69 , SHBP Coverage for State Intermittent
Employees, for more information.
New Jersey National Guard — A member of the New Jersey National Guard who is called
to State active duty for 30 days or more is eligible to enroll in NJ DIRECT15 at the State's
expense. Upon enrollment, the member may also enroll eligible dependents. The
Department of Military and Veteran's Affairs is responsible for notifying eligible members
and the Division of Pensions and Benefits of members who are eligible for coverage under
NJ DIRECT15.
LOCAL EMPLOYEES
To be eligible for local employer coverage, you must be a full-time employee as determined
by your employer or an appointed or elected officer as defined by N.J.S.A. 40A:9 receiving a
salary from a local government employer (county, municipality, county or municipal
authority, etc.) that participates in the SHBP or a local education employer (board of
education, county college, etc.) that participates in the SEHBP. Each participating local
employer defines the minimum number of hours necessary to be considered full-time. It can
be no less than an average of 20 hours per week. The employer is required to file a
resolution with the Health Benefits Bureau of the Division of Pensions and Benefits
4 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
indicating the minimum hour requirement. Employment must also be for 12 months per year
except for employees whose usual work schedule is 10 months per year (the standard
school year).
The following categories of local employees are also eligible for coverage in NJ DIRECT15.
Local Part-Time Employees — A part-time faculty member employed by a county or
community college that participates in the SEHBP is eligible for NJ DIRECT15 coverage if
they are members of a State-administered pension system. The faculty member must pay
the full cost of the coverage. Part-time faculty members will not qualify for employer or State-
paid post-retirement health care benefits, but may enroll in retired group coverage at their
own expense provided they were covered by NJ DIRECT15 up to the date of retirement.
See Fact Sheet #66 , Health Benefits Coverage for Part-Time Employees, for more
information.
ENROLLMENT
You are not covered until you enroll in the SHBP or SEHBP. You must fill out a NJ Health
Benefits Application and provide all the information requested. If you do not enroll all eligible
members of your family within 60 days of the time you or they first become eligible for
coverage, you must wait until the next Open Enrollment period to do so. Open Enrollment
periods generally occur once a year usually during the month of October. Information about
the dates of the Open Enrollment period and effective dates for coverage is announced by
the Division of Pensions and Benefits.
ELIGIBLE DEPENDENTS
Your eligible dependents are your spouse, civil union partner or eligible same-sex domestic
partner, and your eligible unmarried children.
Spouse — A member of the opposite sex to whom you are legally married. A photocopy of
the marriage certificate is required for enrollment.
Civil Union Partner — A person of the same sex with whom you have entered into a civil
union. A photocopy of the New Jersey Civil Union Certificate or a valid certification from
another jurisdiction that recognizes same-sex civil unions is required for enrollment. The
cost of a civil union partner's coverage may be subject to federal tax (see your employer or
Fact Sheet #75 , Civil Unions, for details).
Domestic Partner — A person of the same sex with whom you have entered into a
domestic partnership as defined under Chapter 246, P.L. 2003, the Domestic Partnership
Act. The domestic partner of any State employee, State retiree, or an eligible employee or
retiree of a participating local public entity that adopts a resolution to provide Chapter 246
health benefits, is eligible for coverage. A photocopy of the New Jersey Certificate of
Domestic Partnership dated prior to February 19, 2007 (or a valid certification from another
State or foreign jurisdiction that recognizes same-sex domestic partners) is required for
enrollment. The cost of same-sex domestic partner coverage may be subject to federal tax
(see your employer or Fact Sheet #71 , Benefits Under the Domestic Partnership Act, for
details).
NJ DIRECT MEMBER HANDBOOK
5
Children — Refers to your unmarried children under age 23 who:
• live with you in a regular parent-child relationship;
• are away at school; or
• are divorced children living at home provided that they are dependent upon you
for support and maintenance.
A photocopy of your child's birth certificate is required for enrollment.
If you are a single parent, divorced, or legally separated, your children who do not live with
you are eligible if you are legally required to support those children — Affidavits of
Dependency and legal documentation are required with enrollment forms for these cases. If
a Qualified Medical Child Support Order (QMCSO) is issued for your child, the health plan of
the parent required to provide coverage according to the terms of the QMCSO will be the
primary plan for that child. The employer must be notified of the QMCSO and a NJ Health
Benefits Application submitted electing coverage for the child within 60 days of the date the
order was issued.
Stepchildren, foster children, legally adopted children, and children in a guardian-ward
relationship are also eligible provided they live with you, are under the age of 23 and are
substantially dependent upon you for support and maintenance. Affidavits of Dependency
and legal documentation are required with enrollment forms for these cases.
Coverage for an enrolled child will end when the child marries, enters into a civil union or
domestic partnership, moves out of the household, turns age 23, or is no longer dependent
on you for support and maintenance. Coverage for children age 23 ends on December 31 of
the year in which they turn age 23 (see the "COBRA" section on page 53, "Dependent
Children with Disabilities" and "Over Age Children Until Age 31" below for continuation of
coverage provisions).
Dependent Children with Disabilities — If a covered child is not capable of self-support
when he or she reaches age 23 due to mental illness or incapacity, or a physical disability,
the child may be eligible for a continuance of coverage. To request continued coverage,
contact the Office of Client Services at (609) 292-7524 or write to the Division of Pensions
and Benefits, Health Benefits Bureau, 50 West State Street, P. O. Box 299, Trenton, New
Jersey 08625 for a Continuance for Dependent with Disabilities form. The form and proof of
the child's condition must be given to the Division no later than 31 days after the date
coverage would normally end. Since coverage for children ends on December 31 of the year
they turn 23, you have until January 31 to file the Continuance for Dependent with
Disabilities form. Coverage for children with disabilities may continue only while (1) you are
covered through the SHBP or SEHBP, and (2) the child continues to be disabled, and (3)
the child is unmarried or does not enter into a civil union or domestic partnership, and (4) the
child remains dependent on you for support and maintenance. You will be contacted
periodically to verify that the child remains eligible for continued coverage.
Over Age Children Until Age 31 — Certain over age children may be eligible for coverage
until age 31 under the provisions of Chapter 375, P.L. 2005, as amended by Chapter 38,
P.L. 2008.
This includes a child by blood or law who:
• is under the age of 31;
• unmarried or not a partner in a civil union or domestic partnership;
• has no dependent(s) of his or her own;
6 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
• is a resident of New Jersey or is a full-time student at an accredited public or
private institution of higher education; and
• is not provided coverage as a subscriber, insured, enrollee, or covered person
under a group or individual health benefits plan, church plan, or entitled to
benefits under Medicare.
Under Chapter 375, an over age child does not have any choice in the selection of benefits
but is enrolled for coverage in exactly the same plan or plans (medical and/or prescription
drug) that the covered parent has selected. The covered parent or child is responsible for
the entire cost of coverage. There is no provision for dental or vision benefits under Chapter
375, however, vision and dental benefits may be available through COBRA (see page 53).
Coverage for an enrolled over age child will end when the child no longer meets any one of
the eligibility requirements or if the required payment is not received. Coverage will also end
when the covered parent's coverage ends. Coverage ends on the first of the month following
the event that makes the dependent ineligible or up until the paid through date in the case of
non-payment.
See Fact Sheet #74 , Health Benefits Coverage of Children until Age 31 under Chapter 375 ,
for more details.
DEPENDENT ELIGIBILITY VERIFICATION AUDIT
During 2009 and 2010, a Dependent Eligibility Verification Audit of all members will be
performed by Aon Consulting on behalf of the Division of Pensions and Benefits to
determine if covered dependents are eligible under plan provisions. Proof of dependency
such as a marriage, civil union, and/or birth certificates, and tax returns are required.
Coverage for ineligible dependents will be terminated. An amnesty period will be permitted
during which employees and retirees will have the opportunity to voluntarily identify and
remove any ineligible dependents from coverage and therefore avoid any penalties or other
legal action. After the close of the amnesty period, members who are found to have
intentionally enrolled an ineligible person for coverage will be prosecuted to the fullest extent
of the law. Failure to respond to the audit will result in the termination of dependent
coverage.
MEDICARE COVERAGE WHILE EMPLOYED
In general, it is not necessary for a Medicare-eligible employee, spouse, civil union or
domestic partner, or dependent child(ren) to be covered by Medicare while the employee
remains actively at work. However, if you or your dependents become eligible for Medicare
due to End Stage Renal Disease (ESRD) you and/or your dependents must enroll in
Medicare Parts A and B even though you are actively at work. For more information, see
"Medicare Coverage" beginning on page 9 in the "Retiree Eligibility" section.
NJ DIRECT MEMBER HANDBOOK
7
RETIREE ELIGIBILITY
The following individuals will be offered SHBP Retired Group coverage for themselves and
their eligible dependents:
• Full-time State employees, employees of State colleges/universities, autonomous
State agencies and commissions, or local employees who were covered by, or
eligible for, the SHBP at the time of retirement and begin receiving a monthly
retirement benefit or lifetime annuity immediately following termination of
employment.
• Part-time State employees and part-time faculty at institutions of higher
education that participate in the SHBP if enrolled in the SHBP at the time of
retirement.
• Participants in the Alternate Benefit Program (ABP) eligible for the SHBP who
retire with at least 25 years of credited ABP service or those who are on a long-
term disability and begin receiving a monthly lifetime annuity immediately
following termination of employment.
• Certain local policemen or firemen with 25 years or more of service credit in the
pension fund or retiring on a disability retirement if the employer does not provide
any payment or compensation toward the cost of the retiree's health benefits. A
qualified retiree may enroll at the time of retirement or when he or she becomes
eligible for Medicare. See Fact Sheet #47 , Retired Health Benefits Coverage
under Chapter 330, for more information.
• Surviving spouses, civil union partners, eligible same-sex domestic partners, and
children of Police and Firemen's Retirement System (PFRS) members or State
Police Retirement System (SPRS) members killed in the line of duty.
The following individuals will be offered SEHBP Retired Group coverage for themselves and
their eligible dependents:
• Full-time members of the Teachers' Pension and Annuity Fund (TPAF) and
school board or county college employees enrolled in the Public Employees'
Retirement System (PERS) who retire with less than 25 years of service credit
from an employer that participates in the SEHBP.
• Full-time members of the TPAF and school board or county college employees
enrolled in the PERS who retire with 25 years or more of service credit in one or
more State or locally-administered retirement systems or who retire on a
disability retirement, even if their employer did not cover its employees under the
SEHBP. This includes those who elect to defer retirement with 25 or more years
of service credit in one or more State or locally-administered retirement systems
(see "Aggregate of Pension Membership Service Credit" on page 8).
• Full-time members of the TPAF or PERS who retire from a board of education,
vocational/ technical school, or special services commission; maintain
participation in the health benefits plan of their former employer; and are eligible
for and enrolled in Medicare Parts A and B. A qualified retiree may enroll at
retirement or when he or she becomes eligible for Medicare.
• Participants in the Alternate Benefit Program (ABP) eligible for the SEHBP who
retire with at least 25 years of credited ABP service or those who are on a long-
8 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
term disability and begin receiving a monthly lifetime annuity immediately
following termination of employment.
• Part-time faculty at institutions of higher education that participate in the SEHBP
if enrolled in the SEHBP at the time of retirement.
Eligibility for SHBP or SEHBP membership for the individuals listed in this section is
contingent upon meeting two conditions:
1. You must be immediately eligible for a retirement allowance from a State- or
locally-administered retirement system (except certain employees retiring from a
school board or community college); and
2. You were a full-time employee and eligible for employer-paid medical coverage
immediately preceding the effective date of your retirement (if you are an
employee retiring from a school board or community college under a deferred
retirement with 25 or more years of service, you must have been eligible at the
time you terminated your employment), or a part-time State employee or part-
time faculty member who is enrolled in the SHBP or SEHBP immediately
preceding the effective date of your retirement.
This means that if you allow your active coverage to lapse (i.e. because of a leave of
absence, reduction in hours, or termination of employment) prior to your retirement or you
defer your retirement for any length of time after leaving employment, you will lose your
eligibility for Retired Group health coverage. (This does not include former full-time
employees enrolled in TPAF and PERS board of education or county college who retire with
25 or more years of service).
Note: If you continue group coverage through COBRA (see the "COBRA" section on page
53) — or as a dependent under other coverage through a public employer — until your
retirement becomes effective, you will be eligible for retired coverage under the SHBP or
SEHBP.
Otherwise qualified employees whose coverage is terminated prior to retirement but who
are later approved for a disability retirement will be eligible for Retired Group coverage
beginning on the employee's retirement date. If the approval of the disability retirement is
delayed, coverage shall not be retroactive for more than one year.
Aggregate of Pension Membership Service Credit
Upon retirement, a full-time State employee, board of education, or county college employee
who has 25 years or more of service credit, is eligible for State-paid health benefits under
the SHBP or SEHBP.
A full-time employee of a local government who has 25 years or more of service credit
whose employer participates in the SHBP and has chosen to provide post-retirement
medical coverage to its retirees is eligible for employer-paid health benefits under the SHBP.
A retiree eligible for the SHBP or SEHBP may receive this benefit if the 25 years of service
credit is from one or more State or locally-administered retirement systems and the time
credited is nonconcurrent.
For PERS or TPAF members, Out-of-State Service, U.S. Government Service, or service
with a bi-state or multi-state agency, requested for purchase after November 1, 2008, cannot
be used to qualify for any State-paid or employer-paid health benefits in retirement.
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Eligible Dependents of Retirees
Dependent eligibility rules for Retired Group coverage are the same as for Active Group
coverage except for Chapter 334 domestic partners and the Medicare requirements
(described below).
Chapter 334, P.L. 2005, provides that retirees from local entities (municipalities, counties,
boards of education, and county colleges) whose employers do not participate in the in
SHBP or SEHBP, but who become eligible for SHBP or SEHBP coverage at retirement (see
page 7), may also enroll a registered same-sex domestic partner as a covered dependent
provided that the former employer's plan includes domestic partner coverage for employees.
Enrolling in Retired Group Coverage
The Health Benefits Bureau is notified when you file an application for retirement with the
Division of Pensions and Benefits. If eligible, you will receive a letter inviting you to enroll in
Retired Group coverage. Early filing for retirement is recommended to prevent any lapse of
coverage or delay of eligibility.
If you do not submit a Retired Coverage Enrollment Application at the time of retirement, you
will not generally be permitted to enroll for coverage at a later date. See Fact Sheet #11 ,
Enrolling for Health Benefits Coverage When You Retire, for more information.
If you believe you are eligible for Retired Group coverage and do not receive an offering
letter by the date of your retirement, please contact the Division of Pensions and Benefits,
Office of Client Services at (609) 292-7524 or send an e-mail to:
pensions.nj@treas.state.nj.us .
Additional restrictions and/or requirements may apply when enrolling for Retired
Group coverage. Be sure to carefully read the "Retiree Enrollment" section of the Summary
Program Description .
MEDICARE COVERAGE
Medicare Parts A and B
IMPORTANT: A Retired Group member and/or dependent spouse, civil union partner,
eligible same-sex domestic partner, or child who is eligible for Medicare coverage by
reason of age or disability must be enrolled in both Medicare Part A (Hospital
Insurance) and Part B (Medical Insurance) to enroll or remain in SHBP or SEHBP
Retired Group coverage.
You will be required to submit documented evidence of enrollment in Medicare Part A and
Part B when you or your dependent becomes eligible for that coverage. Acceptable
documentation includes a photocopy of the Medicare card showing both Part A and Part B
enrollment, or a letter from Medicare indicating the effective dates of both Part A and Part B
coverage. Send your evidence of enrollment to the Health Benefits Bureau, Division of
Pensions and Benefits, PO Box 299, Trenton, New Jersey 08625-0299 or fax it to (609) 341-
3407. If you do not submit evidence of Medicare coverage under both Part A and Part B,
you and/or your dependents will be terminated from coverage. Upon submission of proof of
full Medicare coverage, your Retired Group coverage will be reinstated by the Health
Benefits Bureau on a prospective basis.
IMPORTANT: When coordinating benefits with Medicare, the secondary benefit under
NJ DIRECT is supplemental to the Medicare payment. NJ DIRECT will consider the
remaining Medicare coinsurance and deductible as the allowable expense and apply
10 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
the applicable copayments, coinsurance, or deductible when appropriate. If a
provider is not registered with or opts out of Medicare, no benefits are payable under
the SHBP or SEHBP for the provider's services, the charges would not be considered
under the medical plan, and the member will be responsible for the charges.
Medicare Part D
The prescription drug benefits provided through the SHBP and SEHBP Retired Group
medical plans are equal to or better than the benefits provided by the standard Medicare
Part D plan. Therefore, most Medicare eligible retirees and/or their Medicare eligible
dependents need not enroll in Medicare Part D prescription drug coverage. Some SHBP or
SEHBP members who qualify for low income subsidy programs may find it beneficial to
enroll in Medicare Part D. However, once you and/or your dependents enroll in Medicare
Part D, your SHBP or SEHBP retired group prescription drug benefits will be terminated for
both you and your dependents.
Medicare Eligibility
A member may be eligible for Medicare for the following reasons:
• Medicare Eligibility by Reason of Turning Age 65
A member (the retiree or covered spouse/partner) is considered to be eligible for
Medicare by reason of age from the first day of the month during which he or she
reaches age 65. However, if he or she is born on the first day of a month, he or
she is considered to be eligible for Medicare from the first day of the month which
is immediately prior to his/her 65th birthday.
The retired group health plan is the secondary plan.
• Medicare Eligibility by Reason of Disability
A member (the retiree or covered spouse/partner or dependent) who is under
age 65 is considered to be eligible for Medicare by reason of disability if they
have been receiving Social Security Disability benefits for 24 months.
The retired group health plan is the secondary plan.
• Medicare Eligibility by Reasons of End Stage Renal Disease
A member usually becomes eligible for Medicare at age 65 or upon receiving
Social Security Disability benefits for two years. A member (the retiree or covered
spouse/partner or dependent) who is not eligible for Medicare because of age or
disability may qualify because of treatment for End Stage Renal Disease
(ESRD). When a person is eligible for Medicare due to ESRD, Medicare is the
secondary payer when:
• The individual has group health coverage of their own or through a family
member (including a spouse/partner).
• The group health coverage is from either a current employer or a former
employer. The employer may be of any size (not limited to employers with
more than 20 employees).
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The rules listed above, known as the Medicare Secondary Payer (MSP) rules are
federal regulations that determine whether Medicare pays first or second to the
group health plan. These rules have changed over time.
As of January 1, 2000, where the member becomes eligible for Medicare solely
on the basis of ESRD, the Medicare eligibility can be segmented into three parts:
(1) an initial three-month waiting period; (2) a "coordination of benefits" period;
and (3) a period where Medicare is primary.
Three-month waiting period
Once a person has begun a regular course of renal dialysis for treatment of
ESRD, there is a three-month waiting period before the individual becomes
entitled to Medicare Parts A and B benefits. During the initial three-month period,
the group health plan is primary.
Coordination of benefits period
During the "coordination of benefits" period, Medicare is secondary to the
group health plan coverage. Claims are processed first under the health plan.
Medicare considers the claims as a secondary carrier. For members who
became eligible for Medicare due solely to ESRD, the coordination of benefits
period is 30 months.
When Medicare is primary
After the coordination of benefits period ends, Medicare is considered the
primary payer and the group health plan is secondary.
Dual Medicare Eligibility
When the member is eligible for Medicare because of age or disability and then
becomes eligible for Medicare because of ESRD:
• If the health plan is primary because the member has active employment
status, then the group health plan continues to be primary for 30 months
from the date of dual Medicare entitlement.
• If the health plan is secondary because the member is not actively employed,
then the health plan continues to be the secondary payer. There is no 30-
month coordination period.
How to File a Claim If You Are Eligible for Medicare
When filing your claim, follow the procedure listed below that applies to you.
New Jersey Physicians or Providers:
• You should provide the physician or provider with your identification number. This
number should be written on the Medicare Request for Payment (claim form)
under "Other Health Insurance."
• The physician or provider will then submit the Medicare Request for Payment to
the Medicare Part B carrier.
• After Medicare has taken action, you will receive an Explanation of Benefits
statement from Medicare.
12 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
• If the remarks section of the Explanation of Benefits contains the following
statement, you need not take any action: "This information has been forwarded to
the Plan for their consideration in processing supplementary coverage benefits."
• If the statement shown above does not appear on the Explanation of Benefits,
you should indicate your NJ DIRECT identification number and the name and
address of the physician or provider in the remarks section of the Explanation of
Benefits with a completed NJ DIRECT claim form and send it to the address on
the claim form.
Out-Of-State Physicians or Providers:
• The Medicare Request for Payment form should be submitted to the Medicare
Part B carrier in the area where services were performed. Call your local Social
Security office for information.
• When you receive the Explanation of Benefits , indicate your identification number
and the name and address of the physician or provider in the Explanation of
Benefits with a completed claim form to the address on the claim form.
Retirees Enrolled in Medicare Who Move Outside the United States
Members who reside outside the United States must still maintain their Medicare
coverage (Part A and Part B) in order to be covered under Retired Group coverage;
however, Medicare does not cover services outside the United States. For members
who reside outside the United States, NJ DIRECT covers services as if NJ DIRECT
were primary.
Members, who reside outside the United States, even if they reside in a country with a
national health plan, should consider that if they travel outside their country of residence
they will still need coverage. In order to have coverage at any time in the future, the
member must stay enrolled in the SHBP or SEHBP, since once a member terminates
coverage they will not be reinstated.
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GENERAL CONDITIONS OF THE PLAN
All benefits listed in this handbook may be subject to limitations and exclusions as described
in subsequent sections. All pertinent parts of this handbook should be consulted regarding a
specific benefit.
Even though a service or supply may not be described or listed in this handbook, that
does not mean the service or supply is eligible for benefits under NJ DIRECT.
NJ DIRECT will pay only for eligible services or supplies that meet the following conditions:
• Are medically needed at the appropriate level of care (see below) for the medical
condition. (When there is a question as to medical need, the decision on whether
the treatment is eligible for coverage will be made by Horizon BCBSNJ.)
• Are listed in the "Eligible Services and Supplies" section on page 59.
• Are ordered by an eligible provider for treatment of illness or injury.
• Were provided while you or your eligible covered dependents were covered by
NJ DIRECT.
• Are not specifically excluded (listed in the "Charges Not Covered by NJ DIRECT"
section on page 38).
When you use an out-of-network provider, all services, supplies, tests, etc. prescribed by the
out-of-network provider, including hospitalization, are reimbursed at a percentage of the
reasonable and customary allowance after deductibles and coinsurance have been met. The
member is responsible for any amount charged by the physician that is above and beyond
the reasonable and customary allowance in addition to deductibles and coinsurance.
Medical Need and Appropriate Level of Care
The medical need and appropriate level of care for any service or supply is determined by
Horizon BCBSNJ and must meet each of these requirements:
• It is ordered by an eligible provider for the diagnosis or the treatment of an illness
or injury.
• The prevailing opinion within the appropriate specialty of the United States
medical profession is that it is safe and effective for its intended use.
• That it is the most appropriate level of service or supply considering the potential
benefits and possible harm to the patient.
See also "Experimental or Investigational Treatments" on page 17.
Health Care Fraud
Health care fraud is an intentional deception or misrepresentation that results in an
unauthorized benefit to a member or to some other person. Any individual who willfully and
knowingly engages in an activity intended to defraud the SHBP or SEHBP will face
disciplinary action that could include termination of employment and may result in
prosecution. Any member who receives monies fraudulently from a health plan will be
required to fully reimburse the plan.
14 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
PRECERTIFICATION OF BENEFITS
IN-NETWORK AND OUT-OF-NETWORK
A precertification is required for certain services and all inpatient admissions. Failure to
obtain a precertification may result in benefits being denied. Participating physicians and
hospitals will obtain precertification on your behalf. Horizon BCBSNJ will conduct a review of
any services that were not precertified to determine eligibility. If you do not obtain
precertification, payment will not be made for services that are determined to be not
medically appropriate.
NJ DIRECT SERVICES REQUIRING PRECERTIFICATION
Accidental Dental Injuries
Air Ambulance
Cancer Clinical Trials
Cochlear Implants
Durable Medical Equipment (DME) (see examples below)
• Electric, customized or motorized wheelchairs and scooters, and powered accessories
• Electric beds/Clinitron/powered hospital beds/air mattresses/powered accessories
• Enteral formula
• Bone stimulators
• Neurostimulators
• Lymphadema pumps
• External defibrillators
• All rentals
Inpatient Admissions:
• All acute care confinements, exclusive of maternities, including:
1. Surgical admissions
2. Medical admissions
3. Hospice admission
4. All Skilled Nursing Facility (SNF) confinements
• All Rehabilitation Facility confinements
• All Sub-Acute confinements
• Mental health and substance abuse confinements (including Residential, Partial
Hospitalizations, and Intensive Out-Patient Admissions.)
Home Health Care Services
Home Hospice Services
Hospital Based Weight Loss Programs
Hyperbaric Oxygen Therapy
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Infertility Services
• Gamete intrafallopian transfer
• In vitro fertilization
• Zygote intrafallopian transfer
• Artificial insemination
• Hysterosalpingography
Home Infusion (IV) Therapy
Mental Health and Alcohol and Substance Abuse Services
Specific Medications administered in a physician's office or dialysis facility
(review performed by Care Core National)
• Aranesp
• Epogen
• Procrit
Pain Management
Private Duty Nursing in the Home (Inpatient PDN is ineligible)
Radiology (review services performed by Care Core National)
• CT/CTA Scans
• MRI/MRA
• Nuclear Medicine/Nuclear Cardiology
• PET and PET/CT Scans
• Echo Stress Tests
• Diagnostic Left Heart Catheterization.
Reconstructive Procedures that may be considered Cosmetic:
• Blepharoplasty/Canthopexy/Canthoplasty
• Excision of excessive skin due to weight loss
• Rhinoplasty/rhytidectomy
• Pectus excavatum repair
• Breast reconstruction/enlargement
• Breast reduction/mammoplasty
• Lipectomy or excess fat removal
• Sclerotherapy or surgery for varicose veins
• Facial reconstruction or repair including:
9 Orthognathic surgery
9 Bone grafts
9 Osteotomies
9 Surgical management of temporomandibular joint
16 NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
• Any other potentially cosmetic procedure
Specialty Pharmaceuticals
Spinal Disk Surgeries (including but not limited to):
• Percutaneous Laser Discectomy
• Nucleoplasty
• Spinal Fusion
Surgery for Morbid Obesity (including but not limited to):
• Gastroplasty
• Gastric Bypass
• Bariatric Procedures
Therapy Services:
• Cognitive Therapy
• Occupational Therapy
• Physical Therapy
• Speech Therapy
Transplants
• Lung
• Liver
• Heart
• Pancreas
• Autologous Bone Marrow
• Cornea
• Kidney
• Autologous Condrocyte Transplants
• Uvulopalatopharyngoplasty (UPPP)
Predetermination of Benefits
A predetermination for any service may be obtained in writing in advance of services being
rendered. The written request will need to include the provider's name, address, and phone
number, the diagnosis, a description of the services to be rendered, and the anticipated
charges. Telephone contact with Horizon BCBSNJ or the Division of Pensions and Benefits
about coverage does not constitute a predetermination of benefits. If the actual services
rendered differ from those described in the written request, the predetermination of benefits
will have no effect. A predetermination is valid for one year from the date issued. All
requests for written predeterminations must include all necessary medical documentation
and must be presented to Horizon BCBSNJ three to four weeks prior to the services being
rendered. If Horizon BCBSNJ requires additional medical information, the written response
may be delayed.
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UTILIZATION MANAGEMENT
(Medical Management and Review)
Both in-network and out-of-network treatment is subject to Utilization Management (UM), a
process used to ensure that treatment is medically needed and provided at the appropriate
level of care. When the treatment is proposed by an in-network provider, the provider is
responsible for the UM contact. Benefits are payable for in-network treatment when they are
provided by an in-network provider, the UM organization has been notified to review the
treatment, and the UM organization has approved the treatment.
Out-of-network benefits that are actually payable will also depend on whether the patient or
patient's provider has or has not contacted the UM organization in regard to proposed
medical treatment and whether the UM organization agrees that the treatment is needed
and at the appropriate level of care. If the member is utilizing a non-participating physician,
they should request their non-participating physician to contact Utilization Management at
the number listed on their ID card (1-800-664-2583) . If a member calls this number to
request precertification, the UM organization's Precertification Department will request the
phone number of the physician and will contact the physician to obtain the