Vitale-Gill Bill to Shore-up NJ Health Insurance Market Passes Senate

TRENTON – In the face of a federal government determined to undermine the Affordable Care Act of 2010, the Senate passed a bill sponsored by Senator Joe Vitale and Senator Nia Gill that would help shore-up New Jersey’s health insurance market by instating a state-level health insurance assessment (HIA) fee.

The New Jersey fee would not be a new charge but would replace the current HIA which is a federal fee on health insurance companies that was established to help fund the ACA. The state-level HIA is needed because the existing federal fee is set to expire on January 1, 2021.

Creating the state-level HIA would “help shore-up our state’s health insurance market and generate revenue to improve health care access and affordability through a variety of mechanisms,” said Senator Vitale.

Revenues would be used to fund subsidies, reinsurance, tax policies, outreach and enrollment efforts, and other endeavors to extend coverage to and improve affordability of health insurance for low- and moderate-income families and the uninsured.

“This bill will help to ensure that people are able to afford health insurance during this critical time when a global disease is not only threatening their health, but their financial security in unimaginable ways,” said Senator Vitale (D-Middlesex), Chair of the Senate Health, Human Services and Senior Citizens Committee. “Of the many fissures exposed by COVID-19, the deficiencies in a system that relies on employer-based coverage is one that can’t be ignored. These subsidies could not come at a more critical time, in the midst of a pandemic, when health insurance is more vital than ever.”

The HIA proposed in this bill is projected to bring in hundreds of millions of dollars in revenue for New Jersey in calendar year 2021. However, since it is continuing the structure of fees already in place, New Jersey should not see an overall increase in premiums due to the assessment.

“This bill is critical at a time when thousands of New Jerseyans are losing their coverage due to the impact of COVID-19 on our economy,” said Senator Gill (D-Essex/Passaic). “By providing subsidies to people under 400 percent of the federal poverty line, this legislation will help to bridge the disparities within our healthcare system, and reduce the number of people who are uninsured in our middle-class. This is not a new tax, we are not asking the healthcare companies to do more, we are asking the healthcare companies to do their part.”

The assessment on any entity would be 2.5% of the entity’s net earned premiums.

Small employer health benefits plans, dental service corporations, and multiple employer welfare arrangements that are registered as the bills enactment would not be subject to the assessment fee.

The bill passed the Senate by a vote of 22-16.