NJ Approves 2.5% Health Insurance Tax
New Tax Effective 1/1/2021
The state of New Jersey has imposed a 2.5% excise tax on fully insured insurance premiums through legislature A4389, taking effect 1/1/21.
The legislature received massive pushback from NJ businesses; 35 organizations sent a letter of discontent to Gov. Phil Murphy in opposition of the bill. Early estimates suggest that these taxes could raise premiums by at least $600 for families covered by the typical family health insurance plan.
The bill is expected generate $200 million tax dollars for the state. An estimated $77 million of the tax money collected will bolster the state’s existing reinsurance program to cover high cost claims and lower premium costs in the individual market.
Click on the links below for articles with more details regarding this new law.
- NJ.com: Murphy enacts new tax on insurance companies to expand health coverage for middle-class families
- NJBIA: Murphy signs health insurance tax, law takes effect Jan 1
- NJSpotlight: Murphy budget includes taxes, spending to combat ACA ‘Sabotage’
Consider alternative premium financing to avoid these state and federal premium taxes. Our consultants would be happy to provide a risk assessment to determine if you are eligible for alternative premium financing.