New Jersey News

Phil Murphy to Slap 2.5% Tax on Health Insurance Premiums in New Jersey

TRENTON, NJ – A new bill in Trenton has been passed and is headed for Governor Phil Murphy’s desk that includes a 2.5% tax on health insurance for everyone in New Jersey.  That money will be put in a health insurance affordability fund to provide health insurance for illegal aliens and to support the NJ FamilyCareAdvantage program.

The bill requires entities to pay an annual assessment that is 2.5% of the entity’s net written premiums as defined by the bill.

The bill requires the commissioner to calculate and issue to the health provider a certified assessment that is 2.5% of the entity’s net written premiums. The bill requires entities to pay the assessment issued by the commissioner to the State Treasurer no later than May 1 of each year, as prescribed by the commissioner.

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The bill reads:

The bill provides that if the commissioner determines that the amount of the assessment will reduce the State’s total revenue, the commissioner may reduce the assessment. The bill establishes in the Department of the Treasury a nonlapsing revolving fund to be known as the “Health Insurance Affordability Fund.” This fund is to be the repository for all monies collected pursuant to the bill. As directed by the commissioner, in consultation with the Commissioners of the Department of Human Services and the Department of Health, the monies in the fund are to be used only for the purposes of increasing affordability in the individual market and providing greater access to health insurance to the uninsured, including minors, with a primary focus on households with an income below 400 percent of the federal poverty level, expanding eligibility, or modifying the definition of affordability in the individual market, through subsidies, reinsurance, tax policies, outreach and enrollment efforts, buy-in programs, such as the NJ FamilyCare Advantage 2 Program, or any other efforts that can increase affordability for individual policyholders or that can reduce racial disparities in coverage for the uninsured. The bill provides that a report currently required to be issued by the Commissioner of Banking and Insurance by June 1, 2022 shall also set forth the impacts of the measures taken pursuant to the bill on affordability and reductions in racial disparities in health insurance coverage, including impacts by income level, race, and immigration status. The report shall make recommendations to increase affordability and reduce the uninsured rate in New Jersey, as appropriate, based on the data available to the department. The bill also requires that the assessments collected pursuant to the bill be used only for the purposes contained in the bill, with certain provisions to ensure the assessments are used for those purposes in future fiscal years.

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