This past summer the New Jersey state legislature enacted its own individual health care mandate that requires New Jersey residents to obtain health coverage or pay a penalty. The law was passed in response to Congress’ decision to repeal the federal individual mandate established under the Affordable Care Act (ACA) and is a continuation of the ACA provision requiring New Jersey residents to obtain health insurance throughout 2019 or make a Shared Responsibility Payment when they file their 2019 New Jersey Income Tax return. The New Jersey individual mandate law takes effect on January 1, 2019 and includes employer reporting requirements that will be similar to the federal ACA reporting requirements. New Jersey has also launched a new website, GetCovered.NJ.gov, to promote health insurance enrollment and as a means to coordinate public awareness about plan options, as well as contact information for navigators and enrollment assisters who can help residents access coverage. State agencies and departments that regularly interact with the public are also expected to disseminate materials and educate residents on health coverage options and the availability of financial assistance. See the Governor’s press release for more information.
New Jersey’s Individual Mandate: The New Jersey individual mandate closely mirrors the federal ACA individual mandate in terms of the amount of the penalty, the minimum essential coverage (MEC) standard (with some important exceptions), and the administration of the penalty via the tax system. Under the new law, New Jersey taxpayers who are subject to the individual mandate (and their dependents) must have MEC during each month of the year beginning January 1, 2019. Those without MEC may be subject to a penalty that is equal to the amount they would have paid if the ACA’s mandate had not been repealed: $695 for adults ($347.50 per child) or 2.5 percent of a taxpayer’s income, whichever is greater (as adjusted). The hope is that the state-level mandate will incentivize coverage among healthy individuals who might not otherwise purchase insurance following repeal of the federal ACA individual mandate penalty.
Impact on Employer Plans: The New Jersey individual mandate will not likely have much, if any, impact on employer provided health plans. However, certain entities, such as employers of all sizes that offer employer-based health coverage (whether fully insured or self-insured), insurers, and the New Jersey Department of Human Services, will have to submit a return to the state treasurer to include data on individuals covered under MEC such as names, Social Security numbers, dates of coverage, and other information requested by the treasurer.
New Jersey’s individual mandate is one of the first to be effective post the Trump administration’s repeal of the ACA individual mandate. Employers sponsoring both fully-insured and self-insured plans that cover New Jersey residents should stay tuned for clarifying regulations on the reporting requirements, as details are yet to be released on the reporting aspects of this new law. We will continue to provide updates on the New Jersey reporting rules as further information becomes available. Contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220 should you have any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.