Gov. Phil Murphy on Friday signed legislation that creates the New Jersey Health Insurer Assessment, replacing a federal assessment on health insurance companies that will end on Dec. 31.
The legislation, which had both supporters and detractors in the business and health care communities, will create state-level subsidies that the administration says will lower the cost of health insurance for residents purchasing coverage on the Affordable Care Act marketplace in the fall.
“As the federal government continues to attack critical provisions of the Affordable Care Act, our administration remains committed to lowering the cost of coverage, expanding access to care and improving health equity for our most vulnerable,” Murphy said in a prepared statement. “This action could not come at a more critical juncture, and will directly benefit our uninsured and underinsured populations at a time when many New Jerseyans have lost health coverage as a result of the COVID-19 pandemic.”
The bills, S2676/A4389, establish the New Jersey Health Insurer Assessment, with revenue generated being used to support residents and families utilizing the individual market. The assessment rate of 2.5% of net written premiums is expected to generate more than $200 million in revenue starting in 2021.
The subsidy program will be available to New Jersey residents with an annual income up to 400% of the federal poverty level — $51,040 for individuals and $104,800 for a family of four.
It will be available for the majority of consumers purchasing insurance on the State-Based Marketplace during open enrollment starting Nov. 1, the Governor’s Office said.
Opponents of the measure had criticized it as essentially a “tax” on businesses that provide health insurance to employees. Meanwhile, supporters cited benefits to underserved communities, among other populations in need of assistance.