The Chamber of Commerce Southern New Jersey (CCSNJ) respectfully opposes A5324 (Murphy), which would impose a new annual assessment on employers based on the number of employees, and their dependents, who receive health coverage through the State Medicaid program.

While CCSNJ recognizes the importance of maintaining a strong Medicaid program and appreciates the legislature’s desire to offset increasing healthcare costs, this legislation places an unfair financial burden on employers for circumstances that are largely outside of their control.

Eligibility for NJ FamilyCare and other Medicaid programs is determined by household income and family circumstances, not solely an individual's wages or the health benefits offered by an employer. Employees may qualify because of a spouse's employment status, changes in household income, caregiving responsibilities, or other personal circumstances unrelated to decisions made by their employer. Additionally, many eligible individuals choose Medicaid because it offers coverage that better meets the needs of their family. Those enrollment decisions are personal and often unrelated to the quality or affordability of an employer-sponsored health plan. Employers have no role in determining an individual's eligibility for Medicaid or whether an eligible individual elects to enroll. As a result, this legislation unfairly shifts responsibility for funding a public benefit onto employers who have no control over the factors that determine participation.

CCSNJ is also concerned that the assessment would be based on data employers have little ability to verify. The bill relies on State agency data matching to identify employees and their dependents enrolled in Medicaid and assign those individuals to a particular employer. However, employment status, household composition, and Medicaid eligibility can change frequently, creating a significant risk of inaccurate assessments. Employers generally do not know whether an employee or a dependent is enrolled in NJ FamilyCare, nor should they be expected to maintain that information. Consequently, employers could be assessed fees based on outdated or inaccurate records and would bear the burden of challenging those assessments, even though the underlying data is maintained by the State. This creates unnecessary administrative burdens, financial uncertainty, and due process concerns for New Jersey employers.

CCSNJ is further concerned that the proposal creates unintended disincentives for hiring and workforce growth. By imposing assessments once an employer reaches the statutory threshold, the legislation effectively penalizes businesses for expanding their workforce. Moreover, tying an employer's financial liability to whether an employee or a dependent participates in Medicaid creates the perception that Medicaid eligibility could become a factor in employment decisions, despite employers having no control over an individual's eligibility or enrollment choices. Public policy should never create incentives, or even the appearance of incentives, that could discourage hiring or raise concerns that employment decisions may be influenced by an applicant's potential eligibility for a public benefit.

Finally, the bill raises significant concerns regarding employer privacy, administrative burden, and compliance. The proposal requires extensive data sharing among multiple State agencies, annual employer assessments, electronic reporting requirements, potential audits, and substantial penalties for noncompliance. Employers are also required to pay an assessment before an appeal is resolved, creating additional financial uncertainty and forcing businesses to bear the cost of correcting potential State errors.

For these reasons, the Chamber of Commerce Southern New Jersey respectfully opposes A5324 (Murphy).