JULY 2, 2026
New Jersey signs law charging employers whose workers use Medicaid; other states weigh similar measures
New Jersey Gov. Mikie Sherrill signed legislation Tuesday requiring employers with at least 50 workers on Medicaid to pay a per-person annual fee ranging from $325 to $725, depending on company size. The state budget counts on raising $145 million this year from the program. Several other states, including California, Colorado, Oregon, Connecticut, and Washington, have introduced or advanced similar proposals.
New Jersey's new law charges employers for each employee and dependent enrolled in Medicaid, with fees scaled by the number of Medicaid recipients at the company: $325 per person annually for firms with 50 to 249 Medicaid beneficiaries, rising to $725 for firms with 500 or more. The legislation exempts temporary, seasonal, and part-time workers, and bars employers from making hiring or firing decisions based on a worker's Medicaid status.
Democratic proponents in New Jersey and other states have framed the policy in two ways: as a revenue tool to offset anticipated federal Medicaid cost shifts, and as a matter of fairness. State Sen. John Laird, the California Democrat who sponsored a parallel bill there, said, "If you're a small business person in California, you are quite likely paying for health insurance for your employees. And through your taxes, you're paying for health insurance for some of the biggest employers in California. And that's not fair." The nonpartisan Congressional Budget Office projects that the federal tax and spending law signed by President Trump will result in more than 10 million additional uninsured people by 2034, partly through new work and documentation requirements for Medicaid recipients.
California's legislature passed a bill this year that does not impose a fee immediately but directs the state administration to present options for doing so in 2026. Legislation passed one chamber each in Colorado and Oregon but did not reach either governor. Connecticut Gov. Ned Lamont has called for a similar charge as part of a future state budget.