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New Jersey will administer its own statewide health exchange marketplace starting in 2021. As a result, the state will no longer operate under the federal health exchange.
The funding for transferring into a state exchange will come from the federal exchange user fee, roughly 3.5% of medical premiums, amounting to roughly $50 million annually, according to the state’s official announcement. Maintaining the existing federal user fee in the individual market at 3.5% of premium allows the state to dedicate funding towards outreach and enrollment efforts, which have been reduced at the federal level, the announcement noted.
The official announcement states that “transitioning to a state-based exchange will give the state more control over the open enrollment period; access to data that can be used to better regulate the market, conduct targeted outreach and inform policy decision; and allow user fees to fund exchange exchanges operations, consumer assistance, outreach and advertising.”
Other states that currently operated state-based health exchanges are California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont and Washington. The District of Columbia also operates its own exchange.
New Jersey is one of several states taking an aggressive stance on the protections first implemented by the Affordable Care Act. Among some of the protections to become state policy under Governor Murphy is the formation of a statewide individual mandate that began this year. Other states are also considering passing their own individual mandates.
“New Jersey has not shied away from the work required to secure the protections afforded by the Affordable Care Act and to provide access to quality affordable health care that our residents deserve – in fact, in partnership with the Legislature our state has stepped up,” said Governor Murphy. “Together with the Legislature, we have the ability to further protect New Jersey from actions taken by the Trump Administration to roll back the hard-fought protections afforded by the ACA and I would argue we have an obligation to do so.”
New Jersey’s actions to administer its own statewide health exchange, in addition to including ACA protections into state law, show overarching support for the Affordable Care Act. Like New Jersey, other states are considering creation of their own statewide individual mandates.
Despite efforts made by the Trump administration, the truth is that the ACA remains law of the land, including the Employer Share Responsibility Provisions, commonly referred to as the Employer Mandate.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs), employers with 50 or more full-time employees and full-time equivalent employees, are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to IRS 4980H penalties.
By the year 2026, the IRS is expected to have issued more than $228 billion in penalty assessments for ACA non-compliance to employers. Employers uncertain of their position in regards to ACA compliance should consider having a cost-free ACA Penalty Risk Assessment performed to identify errors that could lead to the issuance of ACA penalties by the IRS. The federal tax agency currently is issuing ACA penalty notices to employers who the IRS has identified as failing to comply with the ACA in the 2016 tax year. IRS staff is now gathering the information to start issuing ACA penalty notices for the 2017 tax year. Those Letter 226J penalty notices for 2017 are expected to arrive sometime in the fourth quarter of 2019.
