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State issues license to its newest health insurance company

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New Jersey has awarded a license to a new health insurance company, Health Republic Insurance of New Jersey, a nonprofit, cooperative funded by more than $100 million in federal loans under the Affordable Care Act to provide more choices for the consumers who will purchase health plans on the ACA's new exchange marketplace.

That marketplace will begin Oct. 1 to enroll individuals and small businesses in health plans taking effect Jan. 1, when the ACA requires most Americans to either get coverage or pay fines. Many of the individuals who purchase coverage on the marketplace will qualify for federal subsidies to make their health insurance affordable; it's been estimated that New Jersey could receive about $700 million in subsidies.

The nonprofit is receiving a federal loan of $107 million so that it has a surplus to pay claims until it builds up revenue from premiums.

James Martin is executive director of Health Republic, the name Freelancers Co-Op of New Jersey has chosen to do business. The company is affiliated with the Freelancers Union in New York City, an association of freelance workers that also has launched ACA-funded cooperative health insurers in New York and Oregon.

Health Republic has its headquarters in Newark, and has a staff of eight, Martin said, with several more joining over the next few weeks. Martin said he was notified Wednesday that the state Department of Banking and Insurance had granted a state health insurance license to the company.

Martin, a former vice president of behavioral health at Liberty Health, parent company of Jersey City Medical Center, said Health Republic will offer a choice of 10 plans that he expects will offer low-cost alternatives that help get uninsured New Jerseyans covered.

Martin estimated Health Republic will enroll 20,000 members in 2014 and 40,000 by 2016. Insurers who have announced that they will sell plans on the ACA marketplace include Horizon Blue Cross Blue Shield of New Jersey, AmeriHealth and Aetna.

"We're expecting that we will be one of the low cost providers among the competition," he said. "It's our intention to make the program attractive to those members of the population who have not had access to insurance previously, or who had it and no longer have it."

Health Republic will offer the members of its plans a doctor and hospital network through a partnership with QualCare, a managed health care company in Piscataway. Martin said he is working with QualCare on ways to improve the health of the Health Republic members, including encouraging them to "see their primary-care physicians before going to an emergency room, and maintaining healthy lifestyles."

Martin said Health Republic "is going to be targeting employees of small business and freelancers — everybody from doctors, to nannies, to beauty parlor owners with five or six employees — the working uninsured."

Cynthia Jay, Health Republic's marketing director, said the company is conducting an outreach campaign to potential customers, and is working directly with associations, legislators, universities and freelancer organizations.

Martin said Health Republic will sell its plans online, via the exchange marketplace, and through a network for brokers that is now being established. He said the company is looking for brokers "who can best relay our unique message."

He said he's spent most of his career in the health delivery field, including serving a decade ago as CEO of the Tri-State Health System in Suffern, N.Y., now the Bon Secours Charity Health System. "I was quite familiar with previous attempts at health care reform — and I couldn't wait for it," Martin said.

Reporter Beth Fitzgerald is @BethFitzgerald8 on Twitter.

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