Dear Legislator:

It is with extreme concern that we write to advise you of the insolvency of the Affiliated Physicians & Employers Master Trust dba/Members Health Plan of New Jersey (APEMT) as a result of COVID-19 expenses. APEMT is one of the largest providers of healthcare coverage in New Jersey's small group market and the looming financial catastrophe for over  4,000 small businesses and their more than 39,500 employees and family members is imminent.  These employers will be required to fund approximately $18 million in losses as a result of COVID-19 expenses at a time when they themselves are struggling to recover from this pandemic.

Click Here for the List of impacted Employers by County
Click Here for COVID-19 Claim Data through May 2021

We implore you to reach out to your legislative leadership and urge them to work with the Governor's office to allocate funds to prevent this catastrophe.  The Governor and leadership have the ability to allocate American Rescue Plan Act funding to mitigate financial and healthcare problems from COVID-19.  Attached is a list of the small businesses in New Jersey that will be negatively affected by this assessment should no funds be allocated. Your constituents will be impacted. APEMT sought legislative relief to avoid this catastrophe and had a bill introduced, with bi-partisan Senate sponsors in place, but ran out of time to get the bill approved.

APEMT is a self-insured trust that has no direct employees and has no access to any guaranty funds that insured carriers have access to and was unable to obtain any PPP or EDA funds during the COVID-19 pandemic. APEMT could not withstand the volume of COVID-related claims for testing and treatment of its member base which consists of a large share of healthcare workers and other frontline retail and small businesses whose employees were working during the pandemic to service the needs of the citizens of New Jersey. Through May 31, 2021 APEMT has paid over $18 million in COVID related claims.

APEMT is a fully assessable plan and must collect funds from employers to cover the estimated shortfall of $18 million.  This will create a severe financial hardship for many small businesses and their employees and families across the state who will receive a demand for their share of the shortfall in late summer or early fall. APEMT is a nonprofit health plan and has been in continuous operation for more than 18 years. APEMT has made every effort to restructure the Plan with capitalization from our partners but was not given the opportunity to continue operations, which has forced the Plan to wind down operations through the U.S. Bankruptcy Court.

Unless some funding source materializes in the next few weeks, we will have to issue payment demands to small businesses already suffering from the COVID-19 pandemic. We anticipate that many of these small businesses will not be able to afford the payment and some will have to close their doors or lay off employees.  Providers may not be paid for services, and healthcare claims may go unpaid if this assessment is not collected in full. This will be a disaster across the board for New Jersey businesses and its residents.

On behalf of the Trust,

Lawrence Downs
Chairman, Affiliated Physicians and Employers Master Trust