New Jersey Approves Fee on Employers With Medicaid-Covered Workers

New Jersey will begin billing employers that have 50 or more workers covered by Medicaid, with fees ranging from $325 to $725 per person each year. The state budget approved earlier this week counts on raising $145 million from the new charges. Companies will be billed for each employee and dependent receiving the joint federal-state coverage.

A bill passed this week in California directs state officials to present options for an employer charge next year. The measure would be implemented by the successor to Gov. Gavin Newsom, who leaves office in January. Democratic gubernatorial candidate Xavier Becerra has included an employer charge in his platform.

State Sen. John Laird, sponsor of the California proposal, said the federal tax and policy law signed by President Trump a year ago prompted the action because it could increase state Medicaid spending. Legislation with similar intent passed one chamber in Colorado and Oregon this year but did not become law.

A measure was introduced in Washington. Connecticut Gov. Ned Lamont has proposed including such a charge in the state budget beginning in two years.

Massachusetts enacted a similar charge in 2017 that applied to employers with workers covered by Medicaid or a state-subsidized plan, but the program expired after one year. Maryland passed a 2006 measure that affected only Walmart before a court challenge ended the fees.

New Jersey's law exempts temporary, seasonal and part-time workers and prohibits employment decisions based on Medicaid status. The nonpartisan Congressional Budget Office projects the federal law will leave more than 10 million people uninsured by 2034.