Starting in April 2027, employers will be subject to a fee if at least 50 employees or dependents receive Medicaid benefits from the state of New Jersey. The New Jersey Medicaid Employer Assessment (A5324) aims to defray the rising costs of providing healthcare coverage to state Medicaid beneficiaries.
By March 1 of each year, the New Jersey Division of Revenue and Enterprise Services will notify employers whether or not they are required to pay the fee. The notification will include a fee calculation and instructions for remitting the payment. All filings and payments are due by April 15.
The fee amount will be based on the total number of employees and dependents enrolled in Medicaid, as follows:
- $325 per applicable individual for employers with 50 to 249 employees and dependents enrolled in Medicaid.
- $525 per applicable individual for employers with 250 to 499 employees and dependents enrolled in Medicaid.
- $725 per applicable individual for employers with 500 or more employees and dependents enrolled in Medicaid.
The law provides that employers are not liable for fees on behalf of individuals with developmental, intellectual, or permanent physical disabilities. Starting July 1, 2027, the following categories of employees will also be exempt from consideration for the fee:
- Individuals employed by the employer for fewer than 90 days.
- Temporary, part-time, and per-diem employees.
- Seasonal employees.
Employers who fail to remit the fee on a timely basis may be charged a penalty of up to $500 per day. The bill establishes an appeals process for employers who wish to dispute their assessment. Employers are prohibited from taking an individual’s Medicaid status into consideration when making employment-related decisions. The New Jersey Department of Labor and Workforce Development is authorized to conduct audits and investigations to enforce compliance with the new law.
Employers operating in New Jersey should be aware of the potential for new annual fees starting next April and prepare accordingly.
For more information, read New Jersey Legislature Bill A5324.