For Applicable Large Employers [ALEs], complying with the Affordable Care Act (ACA) is the primary focus of health benefits compliance.
But New Jersey’s new Medicaid Employer Fee — also known as the Medicaid Employer Assessment — creates a separate state requirement that orgnaizations with NJ employees should evaluate independently.
The key takeaway: Employers that are fully compliant with the ACA may still owe the New Jersey Medicaid Employer Fee.
The new bill was signed on June 30, 2026, and effective July 1, 2026, P.L.2026, c.23
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Who Is Liable?
Employers may offer ACA-compliant health coverage, yet NJ employees or their family members may still enroll in NJ FamilyCare because they:
• Are in a waiting period for employer coverage.
• Decline employer-sponsored coverage.
• Have family members who qualify for Medicaid.
ª Qualify for Medicaid based on household income rules.
These enrolments count toward the employer’s assessment for the new fee.
Subject to the law’s exemptions and calculation rules, if 50 or more employees or dependents enrol in Medicaid based on a December 31 headcount, then the employer is liable to the Medicaid Employer Fee.
How the Fee Works
Annual assessments are based on employer size:
• 50–249 Medicaid-covered employees or dependents: $325 per person
• 250–499: $525 per person
• 500 or more: $725 per person
Key dates each year:
• March 1: Employers receive their headcount and assessment notice.
• April 15: Payment is due electronically.
Late payments may result in penalties of up to $500 per day for each affected employee or dependent. Employers may appeal an assessment, but payment is required while the appeal is pending.
Exemptions: The law excludes employees and dependents with developmental, intellectual, or permanent physical disabilities.
Beginning July 1, 2027, additional exclusions apply to employees with fewer than 90 days of service, as well as part-time, per diem, temporary, and seasonal employees.
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What Employers Should Do
Employers with New Jersey employees should:
• Continue meeting ACA reporting & compliance requirements.
• Evaluate if many employees may qualify for NJ FamilyCare.
• Review whether exclusions or credits apply.
• Work with your benefit advisors to understand potential exposure.
• Budget for the assessment if Medicaid enrolment thresholds are likely to be met.
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The Bottom Line
The New Jersey Medicaid Employer Fee is a separate compliance obligation — not an ACA penalty or replacement. Employers should evaluate the ACA employer mandates and New Jersey Medicaid Employer Fee as distinct compliance requirements.
With other states reportedly considering similar measures, New Jersey’s law may be the beginning of a broader trend. Employers that understand the new rules now will be better positioned to manage compliance and budget for any potential assessment.
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If you have questions about ACA Compliance or the New Jersey Medicaid Employer Fee, please do not hesitate to contact BENEFITSCAPE today by emailing info@benefitscape.com or calling +1 508-655-3307, or use the contact form on benefitscape.com.
We are industry leaders in benefits and compliance — and always happy to help.
