TRENTON – The Senate on Monday passed a bill sponsored by Senator Renee Burgess that differentiates certain legal service plans from traditional insurance products. This distinction clarifies that these legal services are not insurance because they don’t require the payment of claims, assumption of risk, or reimbursement or indemnification for legal services or expenses.

As defined by Bill S-3061, a legal services plan is a program or membership that provides access to legal assistance and services for a fixed fee, typically on a subscription or prepaid basis. Plans are offered through employers, professional organizations, unions, or directly to individuals, aiming to make legal help more affordable and accessible by bundling or providing discounts on services.

Features of a legal services plan often include access to legal advice and consultations, document review services, discounts on other services like complex litigation, and even court representation for specific cases such as civil disputes or minor criminal issues.

These plans benefit a wide range of individuals and groups, including employees who are offered legal services plans as part of their workplace benefits, individuals who frequently require legal assistance, as well as small businesses.

“While legal services plans share some similarities like risk pooling with insurance products,” said Senator Burgess (D-Essex/Union). “Treating them as one in the same could reduce the flexibility of these plans and ultimately increase costs due to added regulatory burdens, in turn making them less affordable for customers. This goes against what these plans are meant to be, and therefore it’s essential to define them not as an insurance product but as a service in order to keep them accessible and affordable.”

The bill passed in a 39-0 vote.