Risk & Business Magazine JGS Insurance Spring 2020 | Page 6
NJ MANDATES
Individual Mandate
Still Applies In New
Jersey Under New
State Law
T
he New Jersey Health
Insurance Market Preservation
Act became effective January 1,
2019. This was a continuation
of the federal Affordable
Care Act (ACA) provision requiring every
New Jersey resident to obtain health
insurance or pay a penalty. While the
federal individual mandate penalty will
no longer be imposed to the uninsured
in 2019, under this new law, New Jersey
taxpayers who are subject to the individual
mandate (and their dependents) must
have minimum essential coverage (MEC)
during each month of the year or be
subject to a penalty.
WHAT IS CONSIDERED MEC?
For purposes of the New Jersey individual
mandate, minimum essential coverage
has the same definition as under the ACA.
MEC includes coverage under:
•
a government-sponsored program,
such as coverage under the
Medicare or Medicaid programs,
the Children’s Health Insurance
Program (CHIP), TRICARE, and
certain types of veterans’ health
coverage;
6
•
an eligible employer-sponsored
plan (including a self-funded plan,
COBRA, and retiree coverage),
defined as any plan offered by an
employer to an employee that is
a governmental plan or a plan or
coverage offered in the small or
large group market within a state;
• a health plan purchased in the
individual market; or
• a grandfathered health plan.
AFFECTED INDIVIDUALS
The requirement to maintain minimum
essential coverage applies to individuals
of all ages (including children) unless that
individual falls within a specific exception
or is exempt. An individual is treated
as having coverage for a month if he or
she has coverage for any one day of that
month.
The following categories of individuals are
exempt from the New Jersey individual
mandate penalty:
• individuals who cannot afford
coverage;
• taxpayers with income below the
New Jersey tax filing threshold;
•
•
•
•
•
•
nonresident taxpayers;
religious conscience objectors;
members of a health care sharing
ministry;
incarcerated individuals;
individuals not lawfully present in
the United States; and
individuals who experience a
hardship.
An individual who is eligible for an
exemption for any one day of a month is
treated as exempt for the entire month.
THE PENALTY
New Jersey’s individual mandate penalty
is calculated in the same manner as the
ACA’s individual mandate. The penalty
is the greater of two amounts—a flat
dollar amount ($695) or a percentage
of income amount (2.5 percent of
income). For purposes of calculating
the penalty, income is the taxpayer’s
household income minus any exemption
(or exemptions, for a married couple) and
standard deductions. Families will pay
half the penalty amount for children, up
to a family cap of three times the annual