Gov. Mikie Sherrill signed the measure into law Tuesday, establishing a new assessment on larger employers whose workers and their dependents receive Medicaid coverage instead of employer-sponsored insurance. State officials included an estimated $145 million in anticipated revenue from the program in the fiscal year budget approved earlier this week.

The policy reflects broader concerns among several Democratic-led states about Medicaid financing following recent federal policy changes that are expected to increase state spending obligations and affect insurance coverage for millions of Americans.

Medicaid is jointly funded by federal and state governments and provides health coverage for eligible low-income individuals and families. State leaders argue that employers whose workforces rely heavily on the program benefit from taxpayer-funded healthcare without bearing the full cost through employer-sponsored insurance.

New Employer Assessment Takes Effect

Under New Jersey’s new law, employers with at least 50 workers or covered dependents enrolled in Medicaid will be required to pay an annual assessment based on the number of beneficiaries associated with their workforce.

The fee begins at $325 per covered individual for employers with between 50 and 249 Medicaid beneficiaries and rises to as much as $725 per person annually for employers with at least 500 beneficiaries.

State lawmakers designed the measure to generate additional funding for Medicaid while attempting to limit unintended employment consequences. The legislation exempts temporary, seasonal and part-time workers from the assessment and prohibits employers from making hiring, firing or other employment decisions based on an individual’s Medicaid enrollment.

Federal Policy Changes Shape State Decisions

New Jersey’s action comes as several other states examine similar approaches to financing Medicaid amid shifting federal requirements.

In California, lawmakers approved legislation directing the state administration to develop options for a comparable employer assessment next year, although no immediate fee has been enacted. The proposal follows concerns that federal Medicaid policy changes signed into law by President Donald Trump could increase financial pressure on state healthcare programs.

California State Sen. John Laird, who sponsored the legislation, argued that employers offering health insurance should not shoulder additional tax burdens while some larger companies benefit from employees relying on publicly funded coverage.

The Congressional Budget Office has projected that more than 10 million people could become uninsured by 2034 under the federal law. Among its provisions are work, education or volunteer activity requirements for certain Medicaid beneficiaries, along with expanded documentation requirements to demonstrate eligibility. The budget office’s estimate has become part of the debate over how states may finance Medicaid in the coming years.

Beyond California, lawmakers in Colorado and Oregon approved similar proposals in one legislative chamber during the most recent session, although neither measure ultimately became law. Comparable legislation was also introduced in Washington state, while Connecticut Gov. Ned Lamont has proposed incorporating an employer assessment into a future state budget.

Business Groups Raise Concerns

Business organizations have criticized New Jersey’s approach, arguing that employers may be charged even when workers voluntarily choose Medicaid over an available employer-sponsored health plan.

Christopher Emigholz, chief government affairs officer for the New Jersey Business and Industry Association, said in a statement that employers could be penalized for decisions outside their control if employees decline workplace health coverage in favor of Medicaid.

Opponents contend the additional assessment could increase operating costs for businesses already managing higher labor and healthcare expenses.

Some Policy Advocates Warn of Unintended Effects

Opposition has also emerged from some left-leaning policy organizations that generally support Medicaid expansion.

Gideon Lukens, a health policy analyst at the Center on Budget and Policy Priorities, said the assessment could unintentionally influence hiring decisions involving workers from lower-income households or single-parent families. He also warned that some individuals might avoid enrolling in Medicaid if they believe doing so could affect employment opportunities.

Lukens said taxes or fees tied to a particular activity often create incentives to reduce the behavior being taxed, raising concerns about possible unintended labor market effects.

New Jersey’s legislation attempts to address those concerns by explicitly prohibiting employment decisions based on Medicaid enrollment status.

Similar Policies Have Been Tried Before

Employer assessments linked to Medicaid participation are not new, although previous efforts have had mixed outcomes.

Massachusetts introduced a similar employer fee in 2018 that applied to certain workers covered through Medicaid or a state-subsidized health insurance exchange. The program expired the following year and was not renewed.

Maryland pursued an earlier version of the policy in 2006 that primarily affected Walmart. An industry challenge ultimately halted the measure after a federal court ruled that it conflicted with federal law governing self-insured employee health plans.

Supporters of more recent proposals believe newer legislative approaches may avoid those legal issues by structuring employer assessments differently and avoiding references to self-insured health plans.

As states continue evaluating how to finance Medicaid amid changing federal requirements, New Jersey’s new employer assessment is likely to remain closely watched by policymakers weighing similar strategies elsewhere.

Tags: Medicaid, New Jersey, Healthcare Policy, Employer Health Coverage, Medicaid Funding, Public Health Financing, California Legislature, Congressional Budget Office, Gov. Mikie Sherrill, Employer Assessment, Health Insurance, State Budgets,

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In a bold move to reshape the nation’s social safety net, House Republicans are proposing nearly $1 trillion in cuts to Medicaid and food stamps. If passed, the sweeping legislation could result in millions of Americans losing access to essential healthcare and nutrition support — despite repeated promises by GOP leaders, including Donald Trump, to leave programs like Medicaid untouched.

Who’s at Risk?

The cuts would hit far more than just able-bodied adults not working, as GOP lawmakers suggest. Experts warn the reductions could impact:

• Children
• Seniors
• People with disabilities
• Low-income workers
• Caregivers and students

More than 71 million Americans rely on Medicaid, and another 42 million receive food stamps through the Supplemental Nutrition Assistance Program (SNAP). This proposal puts a sizable portion of the U.S. population in jeopardy.

Key Medicaid Changes: $700 Billion in Cuts

The House package slashes nearly $700 billion from Medicaid over the next decade, according to the Congressional Budget Office (CBO). The result? Over 10 million people could lose Medicaid coverage by 2034, with 7.6 million projected to be uninsured entirely.

A First in Medicaid’s 60-Year History

For the first time ever, certain adults ages 19 to 64 would need to work at least 80 hours per month — or participate in community service, school, or job programs — to keep their Medicaid benefits. The requirement, set to take effect in 2029, exempts some groups like pregnant women, medically frail individuals, and those with substance use disorders.

But there’s a catch: even people who are working or qualify for exemptions could still lose coverage due to complex reporting requirements.

“Millions could lose coverage simply because they can’t navigate the bureaucracy,” said Michael Karpman of the Urban Institute.

Collateral Damage: Hospitals and States

Hospitals — especially in rural and underserved areas — could be hit hard. With more people uninsured and states receiving less federal aid, hospitals may be forced to:

• Cut services
• Raise prices for insured patients
• Shut down altogether

Nursing homes and state health systems could also suffer as the bill limits how states tax health care providers — a major funding stream for local health programs.

Seniors, Dual Eligibles Also at Risk

The bill could delay streamlined Medicaid eligibility reforms until 2035, potentially pushing 2.3 million people, including seniors and those with disabilities, off the rolls.

And since Medicaid is the largest federal funding source for state budgets, cash-strapped states may have to cut optional services (like dental and home care), raise taxes, or slash other vital programs like education.

One projection from KFF says states would need to raise taxes by an average of 4% to compensate for the loss — ranging from 1% in Kansas and Wyoming to 11% in Louisiana.

Food Stamps: Work Requirements Expanded, State Burden Increased

Under the proposed bill, the rules around SNAP — the formal name for food stamps — would get significantly tougher.

Work Mandates Extended

Currently, adults 18–54 without dependents must work at least 20 hours per week to receive SNAP benefits for more than three months. The new bill would:

• Expand this requirement to adults up to age 64
• Include parents with children aged 7 to 18
• Make it harder for states to waive these rules during tough economic times

States on the Hook for Costs

For the first time, states would have to cover at least 5% of food stamp benefit costs by 2028 — and possibly up to 25% if they have high payment error rates. Administrative costs would also rise, with states covering 75% instead of the current 50%.

The result? Some states may pull back from the program or restrict access further.

“The work requirements could put 11 million people — including 4 million children — at risk of losing food aid,” said Ty Jones Cox from the Center on Budget and Policy Priorities.

A Blow to Local Economies

Independent grocers and local businesses are also sounding the alarm.

SNAP funding supports:

• 388,000 jobs
• Over $20 billion in wages
• More than $4.5 billion in tax revenue

“SNAP is not just food assistance — it’s an economic engine,” said Stephanie Johnson of the National Grocers Association.

What’s Next?

The proposal still faces a rocky path through Congress, with conservative and moderate Republicans battling over the details. The Senate is expected to make further changes.

But one thing is clear: If passed, this legislation would mark a historic rollback of federal support for healthcare and nutrition — potentially reshaping the lives of millions of Americans and the communities they live in.

Source: CNN – House GOP lawmakers are proposing nearly $1 trillion in cuts to Medicaid and food stamps. Here’s who could be impacted

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