Senators press regulator on several state insurance funds, transfers and a growing exchange surplus

Senators on the Budget and Appropriations Committee pressed Commissioner Justin Zimmerman on May 1 about multiple state insurance-related funds, why money is being transferred among them, and whether legislative approval is required to change tax or fee rates that fund the state marketplace.

Zimmerman explained that the health insurance affordability fund (sometimes shortened in testimony to the “HIYA” or affordability fund) helps finance the state reinsurance program and state subsidies so those programs do not rely on the general fund. He described the transfers as written into the statutes and budget design: federally sourced pass-through funding covers the bulk of reinsurance costs in fiscal year 2026, and the affordability fund fills remaining gaps so the general fund is not tapped.

Senators asked why the health insurance exchange trust fund is projected to hold a large surplus even while the state continues to collect a 3.5% user fee that formerly went to the federal exchange. Zimmerman said the fee is statutorily dedicated to exchange operations and that higher enrollment and increased call-center and navigator expenses justify keeping the operational reserve: “It allows us to operate the exchange, independently of the general fund, and allows us to ensure that we're able to meet the needs of our residents, very quickly.”

Committee members repeatedly asked whether the commissioner had authority to increase the fee from 3.5% and whether funds could be shifted to the general fund. Zimmerman responded that any increase would require statutory authority and that he would follow the statute directing dedication of funds to the exchange. When a senator cited historical examples of dedicated-fee funds being repurposed for other uses, Zimmerman pledged to “ensure and try to protect that that fund stays where it is” while he remains in office.

The department also told the committee it expects federal pass-through funding to cover about 75% of reinsurance costs in FY26, with the affordability fund covering roughly 25% of the remainder. Senators requested more detail on balances and transfers; Zimmerman offered to provide additional budget detail to the committee through the chair.

The exchange trust fund and related transfers are central to New Jersey’s effort to keep premiums lower through reinsurance and state subsidies; committee members framed their questions around long-term sustainability and whether transfers that smooth year-to-year budgets may reduce reserve levels needed for future contingencies.