NJ Employers, Physicians Unite Against Proposed Tax on Health Insurance

On Jul 21, 2020

On July 20, leading New Jersey employer and physician organizations released a letter opposing a proposed new tax on health insurance moving through the New Jersey Legislature, S2676 and A4389. The New Jersey legislation aims to raise $300 million by levying a 2.75% tax on health insurance coverage purchased by New Jersey employers, working-class families, and seniors on certain Medicare plans. Early estimates suggest the tax will increase health insurance premiums by at least $600 every year for New Jersey residents covered by the typical family health insurance plan.

“Quite simply, during this unprecedented public health emergency and deep economic disruption resulting from the COVID-19 pandemic, now is not the time for new taxes, let alone new taxes that would increase the cost of health insurance for consumers and businesses in New Jersey,” wrote the 35 organizations in the joint letter. “We believe putting a sales tax on health insurance – which would effectively increase costs on those employers who are able to maintain coverage for their employees – is a significant step backward in ensuring New Jerseyans have access to affordable health care.”

“Local businesses across the state are already struggling to keep their doors open and their employees on payroll, and a new tax on health insurance will only make matters worse,” said Michele Siekerka, president and CEO of the New Jersey Business and Industry Association. “However well-intentioned this legislation may be, now is not the time to ask New Jersey businesses, employees, and families to shoulder added costs for their health care coverage.”

The new tax would also hit Medicare supplemental plans, threatening higher health care costs for over 500,000 New Jersey seniors who already face a heightened risk of health issues associated with the COVID-19 pandemic.

The proposed tax is modeled after a federal tax on health insurance that was permanently repealed in 2019 by the U.S. Congress with overwhelming bipartisan support from Democrats and Republicans.

Here is the list of the 35 New Jersey employer and physician organizations who have released the letter opposing the legislation:

• African American Chamber of Commerce NJ
• Affiliated Physicians & Employers Master Trust
  • The trust is sponsored by:
    • Employers Association of NJ
    • Medical Society of New Jersey
    • BioNJ
    • New Jersey Chamber of Commerce
    • CentraState Medical Center
    • Vista IPA
    • IPA of North Jersey
    • Trinitas Hospital Medical Staff
    • Mountainside IPA
    • Northwest Physicians Organization
    • The Medical & Dental Staff of Hackensack Meridian Health
• American Council of Life Insurers
• Chamber of Commerce of Southern New Jersey
• Commerce and Industry Association NJ
• Early Childcare Education Advocates
• Fuel Merchants Association of New Jersey
• Garden State Pharmacy Owners, Inc.
• Greater Metropolitan Furnishings Association
• Irrigation Association of New Jersey
• National Association of Dental Plans
• National Association of Insurance and Financial Advisors
• National Federation of Independent Business, New Jersey Chapter
• New Jersey Air-Conditioning Contractors Association
• New Jersey Association of Health Underwriters
• New Jersey Association of Health Plans
• New Jersey Builders Association
• New Jersey Building Material Dealers Association
• New Jersey Business and Industry Association
• New Jersey Chamber of Commerce
• New Jersey Dental Association
• New Jersey Food Council
• New Jersey Gasoline, C-Store, Automotive Association
• New Jersey Independent Electrical Contractors Association
• New Jersey Landscape Contractors Association
• New Jersey Motor Truck Association
• New Jersey Plumbing Heating Cooling Contractors
• New Jersey Restaurant & Hospitality Association
• New Jersey Retail Merchants Association
• New Jersey State Funeral Directors Association
• New Jersey State League of Master Plumbers Inc.
• New Jersey Veterinary Medical Association
• New Jersey Warehouse & Movers Association
• Northeastern Retail Lumber Association
• Statewide Hispanic Chamber of Commerce of New Jersey

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