New Jersey Law Would Charge Employers for Workers on Medicaid

According to a report from CBS News, a new New Jersey state law will charge employers a fee if their employees use the state’s Medicaid program. Employers with 50 or more employees are covered by the new law. They will face additional fees if they have employees that use Medicaid. Several other states are considering similar changes to their law. In this article, our New Jersey employment attorney provides a more comprehensive overview of the law.

Know the Basics: What the New Law Does

New Jersey will charge certain employers a fee when their workers receive health coverage through the state Medicaid program instead of employer-sponsored health insurance. The law is designed to ensure that employers whose workforce includes a substantial number of employees enrolled in NJ FamilyCare/Medicaid pay their fair share. The policy is designed to help offset state Medicaid costs at a time when states are facing increased fiscal pressure related to health coverage. It does not simply require every employer to provide health insurance. Instead, it creates a fee-based system tied to employees and dependents who receive Medicaid coverage.

Small Employers are Not Covered (50+ Employees)

Notably, small businesses are not covered by the new law. The bill applies to employers that, during the previous calendar year, employed 50 or more employees who receive health benefits coverage through the State Medicaid program. The fee is assessed for each covered employee and each covered dependent. The amount depends on the number of Medicaid-covered employees:

• $325 per person for employers with at least 50 but fewer than 250 covered employees;
• $525 for employers with at least 250 but fewer than 500 covered employees; and
• $725 for employers with 500 or more covered employees.

Notably, the statute also places the burden on the employer to establish independent contractor status under the referenced unemployment-law test when classification is disputed. 

Compliance, Reporting, and Employer Appeal Rights 

The law is structured as an administrative assessment. The Division of Revenue and Enterprise Services is expected to notify covered employers of liability by March 1, including the number of employees and dependents for whom the fee is assessed. Payment and required filing information are due electronically by April 15 of each year. Employers that fail to pay may face penalties of up to $500 per day while the fee remains unpaid. Employers can dispute an assessment through an administrative appeal, but the bill requires the employer to remit the fee while the appeal is pending. If the assessment is found improper, the employer may receive a refund.

Contact Our New Jersey Employment Law Attorney Today

At Poulos LoPiccolo PC, our New Jersey employment lawyer provides solutions-focused guidance and support to clients. If you have any questions or concerns about an employment law matter, please do not hesitate to contact us to arrange a strictly confidential, no commitment initial case review. Our firm handles labor and employment matters statewide in New Jersey.

Source:

cbsnews.com/philadelphia/news/medicaid-employee-health-coverage-bill-new-jersey-sherrill/