Beginning January 1, 2019 New Jersey residents will be required to have health insurance or pay a tax penalty. The State of New Jersey has become the second state in the nation to adopt a state-level individual health insurance mandate. The New Jersey Health Insurance Market Preservation Act, signed into law on May 30, 2018, aligns with the Affordable Care Act’s (ACA) mandate in that it requires New Jersey taxpayers (and their dependents) to have minimum essential coverage (MEC) during each month of the year or be subject to a penalty. Individuals failing to enroll in MEC coverage may be subject to a tax penalty of 2.5% of a household’s adjusted gross income or a per-person charge, whichever is higher.
The New Jersey mandate does allow for certain individuals to be excluded and does not apply to individuals who object to health insurance for religious reasons or individuals enrolled in a health care sharing ministry, or those who are incarcerated or not lawfully present.
The new legislation will also create a state-based reinsurance program, the New Jersey Health Insurance Premium Security Act, which will use the Revenue collected from the New Jersey’s individual mandate penalty to fund the program.
Employers that offer health coverage, health insurers and the New Jersey Department of Human Services will have to comply with new reporting requirements which have not yet been made available. The reporting will be key to the state in determining whether the New Jersey taxpayers have complied with the mandate. ADP TotalSource will provide details as additional guidance is released.
The full legislation can be found at https://www.njleg.state.nj.us/2018/Bills/A3500/3380_R1.PDF