New Jersey is set to charge companies with workers on Medicaid. Other states may follow [View all]

Source: AP

Updated 7:18 AM EDT, July 2, 2026


New Jersey is launching a new fee on companies whose workers have Medicaid health coverage instead of being covered by their employers. Other states are considering it, too. Democratic lawmakers and governors see it as a way to help pay for the joint federal and state insurance program that covers low-income residents as federal policy changes are expected to make the program more expensive for states and may lead to a reduction in the number of people with coverage.

Proponents also say it’s about fairness because employers benefit from having some lower-income workers with taxpayer-funded health coverage. Business groups object. So do some liberal policy organizations.

New Jersey is putting the fee in place

New Jersey Gov. Mikie Sherrill signed a measure Tuesday night to charge employers that have at least 50 workers covered by Medicaid, and the state budget she approved earlier in the week counts on raising $145 million this year from the program.

Under the plan, companies will be billed for each employee and employees’ dependent receiving Medicaid, the joint state-federal insurance program. The fees per person would start at $325 a year for companies with 50 to 249 Medicaid beneficiaries and top out at $725 annually for employers with at least 500 recipients.

Read more: https://apnews.com/article/medicaid-employers-states-taxes-04356a421cb832340acc8f179ecc1d79