Gov Signs NJ Health Insurance Tax Effective Jan 2021
Gov. Phil Murphy signed a law Friday that imposes a 2.5% tax on health insurance companies that will help pay the premiums for people who rely on the marketplace created by the Affordable Care Act to shop for coverage.
The Department of Banking and Insurance would levy a 2.5% tax on insurance companies based on the amount of money collected in premiums. The proceeds — estimated at about $200 million — would be deposited into the Health Insurance Affordability Fund and used to subsidize the cost of insurance for people who earn no more than four times the federal poverty level. For example, a single person earning a maximum of $50,040 and a family of three earning $86,880 would qualify.
An estimated $77 million of the tax money collected will bolster the state’s existing reinsurance program to cover high-cost claims and lower premium costs in the individual market.
Much like the Health Insurance Tax (HIT) on Insurers under the ACA, it is expected to be passed on to Employers and Consumers. The New Jersey Business and Industry Association testified against the bill while it was making its way through committee, arguing it would “increase costs on businesses and nonprofits, large and small, which have continued to offer health benefit plans during the current COVID-19 pandemic while struggling themselves to remain afloat.”
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New Jersey Enacts Individual Health Mandate – Jun 12, 2018
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