New Jersey Enacts State Individual Mandate and Reinsurance Program
On May 30, 2018, New Jersey Gov. Phil Murphy signed two bills into law that are designed to stabilize and reduce health insurance premiums in the individual market.
- The New Jersey Health Insurance Market Preservation Act is a state individual mandate, requiring individuals in New Jersey to maintain acceptable health coverage or pay a penalty, effective in 2019.
- The New Jersey Health Insurance Premium Security Act establishes a health insurance reinsurance plan in the state. New Jersey intends to seek federal funding for this program through a Section 1332 State Innovation Waiver made available under the Affordable Care Act (ACA).
These new laws are among the first state laws passed in response to changes made to the federal ACA. New Jersey is only the second state to enact its own health insurance individual mandate. Individuals in New Jersey should ensure that they are in compliance with the state individual mandate beginning in 2019.
State Individual Mandate
Effective beginning in 2019, the New Jersey Health Insurance Market Preservation Act imposes a state individual mandate that largely mirrors the ACA’s federal individual mandate requirement. The ACA’s individual mandate penalty has been effectively eliminated beginning in 2019.
New Jersey’s individual mandate requires most individuals in the state (and their family members) to be covered under minimum essential coverage for each month of the year, beginning in 2019. Individuals that don’t obtain acceptable health insurance coverage will be penalized.
Notably, the new law provides that the state individual mandate penalty will not be enforced for any tax year in which the ACA’s federal premium tax credits become unavailable.
Minimum Essential Coverage
For purposes of the New Jersey individual mandate, the term “minimum essential coverage” (MEC) has the same definition as under the ACA.
MEC […]