Beginning July 1, 2026, New Jersey has implemented a new law (P.L. 2026, c.23) that could create a significant new cost for employers with 50 or more employees.
Under the law, employers may be required to pay an annual assessment when an employee—or even one of their dependents—is enrolled in a New Jersey Medicaid program. The State estimates the program will generate approximately $145 million each year to help offset Medicaid funding shortfalls.
The annual assessment ranges from:
• $325 per Medicaid-enrolled employee or dependent for employers with 50–249 employees
• $525 for employers with 250–499 employees
• $725 for employers with 500 or more employees
What’s particularly noteworthy is that the law is not limited to New Jersey-based companies. Employers headquartered outside the state may also be subject to the assessment if they have employees working in New Jersey.
There are also important unanswered questions. Employers are not required to self-report Medicaid enrollment, and the law does not explain exactly how the State will identify covered employees or dependents. The expectation is that New Jersey will match Medicaid enrollment records with unemployment insurance and wage reporting data—a process that raises legitimate privacy and administrative concerns.
The law also includes strong anti-retaliation protections. Employers cannot consider Medicaid enrollment when making hiring, promotion, or employment decisions, and employees have enforcement rights under the New Jersey Civil Rights Act.
If you have employees in New Jersey, now is the time to:
- Review the affordability of your health plan.
- Evaluate your potential financial exposure.
- Monitor upcoming state regulations and guidance.
- Work with your benefits consultant, attorney, or compliance advisor to understand how this law may affect your organization.
As with many new employment laws, the details will matter. Employers should be paying close attention as New Jersey releases additional guidance in the months ahead.
