New Jersey businesses that don’t provide health insurance and whose employees are therefore enrolled in Medicaid would face new penalties under the state budget proposal Gov. Phil Murphy will unveil Tuesday, NJ Advance Media has learned.
The Democratic governor will announce the new per-person fee as part of his budget plan for the fiscal year beginning July 1.
Three sources familiar with the budget said Murphy’s administration expects to collect $20 million for his roughly $39 billion spending plan next year through the new fee.
Firms that don’t offer health insurance coverage and 50 or more of their employees are enrolled in Medicaid would be charged $150-a-head annually if their employees instead tap public benefits, sources said.
Making employers pay their share for health coverage is a popular progressive idea that grew out of anger at large companies like Wal-Mart and Amazon that pay low wages while workers often receive welfare, Medicaid and SNAP food assistance benefits.
Raymond Castro, an analyst at left-leaning think tank New Jersey Policy Perspective, called this a “good move" that could raise “a significant amount of funding."
“I think it’s a question of responsibility,” Castro said. “Why should taxpayers pay for the health coverage of these very profitable, large corporations?”
Still, Castro said the $150 fee “seems kind of low.”
“That’s a pretty incredible deal,” he said. “I think it’s too generous. I think we should re-evaluate that if that is the amount.”
This year’s state budget includes $4.38 billion in state dollars for Medicaid, according to an analysis by the Office of Legislative Services.
The federal Affordable Care Act included an insurance coverage requirement for employers with 50 or more workers. These employers must either offer a “minimum essential coverage plan” which pays 60 percent of benefit costs or pay a fee to the IRS.
As President Donald Trump’s administration has nixed cornerstones of Obamacare, like requiring people to buy a policy or face a fee at tax time, Murphy has picked up the slack by enacting a state insurance mandate for New Jerseyans.
An earlier version of this story contained an inaccurate description of employers’ obligations under the Affordable Care Act.
NJ Advance Media staff writers Matt Arco and Brent Johnson contributed to this report.
Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio.
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