Healthcare Providers Speak Out Against Proposed Tax on Health Insurance Plans

Coalition of New Jersey healthcare and physician advocates say tax would increase costs on those hardest hit by the COVID-19 pandemic  

TRENTON, N.J. – State healthcare and physician advocates, led by the Home Care & Hospice Association of NJ, and the New Jersey Dental Association, called on the Senate and Assembly today to oppose a new tax on health insurance, as proposed in two bills, S-2676 and A-4389. The coalition joins a growing choir of employers, seniors, and health professionals concerned that the bill will increase health insurance costs on New Jersey communities that have already been hit hard by the COVID-19 crisis.

“In the face of a global health pandemic, lawmakers should be working to help seniors and patients—not making it more expensive for those who are already at risk of severe illness from COVID-19,” said Nancy Fitterer, president of the Home Care and Hospice Association of New Jersey. “The home care and hospice industry cares for a population that requires specialized, intensive, and personalized care. These patients already face expensive health care costs and simply cannot shoulder another financial burden in our state – and neither can their families and caregivers who support them and rely on affordable coverage to stay healthy themselves.”

The proposed legislation, S-2676 and A-4389, aims to raise $300 million for a “Health Insurance Affordability Fund” through a 2.75 percent tax on health insurance plans. Early estimates suggest that the tax will increase health insurance premiums by at least $600 annually for New Jersey residents covered by the typical family health insurance plan. These costs will be absorbed by New Jersey’s employers, families and workers who get their coverage through their job, and seniors on Medicare supplemental plans.

The Senate Commerce Committee and the Assembly Financial Institutions and Insurance Committee are hearing the bill on Thursday, July 23^rd.

“Unfortunately, this proposal, as drafted would have seismic effects on dentistry in New Jersey. Thousands of NJ dental practices provide health coverage for their employees through MEWAs and the small group market,” said Jim Schulz, Director of Govermental and Public Affairs for the New Jersey Dental Association. “They cannot sustain further negative economic impact like this tax would have on their business. At this time in our history, we need our legislators to help raise up small business, and particularly our healthcare businesses, and not encumber them with higher taxation.

The proposed tax is modeled after a federal health insurance tax that was permanently repealed in 2019 by Congress with overwhelming bipartisan support, including from Democratic members of New Jersey’s congressional delegation, Josh Gottheimer and Andy Kim.

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