Gov. Phil Murphy signed a new 2.5% tax on certain health insurance premiums, one of two bills passed by the Legislature last week that were vehemently opposed by the business community because of the costs they will impose on thousands of employers.

NJBIA, along with other business and healthcare groups, went all out to convince lawmakers and the Murphy administration to oppose the legislation, and many legislators did vote against it, but the measure is now law. It takes effect Jan. 1, so affected employers will see the increase in their 2021 premiums.

“Even in ordinary times, these bills would be difficult to digest, especially when considering the exorbitant costs of doing business in New Jersey,” NJBIA President and CEO Michele Siekerka said in an op-ed in the Asbury Park Press. “But in these extraordinary and unprecedented times, when most of our surviving businesses tell us it will take years — if ever — to recoup their losses, the pursuit of these bills on their backs is unimaginable.”

Legislators did adopt a couple of NJBIA-backed amendments to the bill to limit the impact it would have on employers overall. Nevertheless, it’s a $200 million tax at a time when most businesses are fighting for their survival.

Legislators have also passed legislation to impose the cost of treating workers who contract COVID-19 onto the state’s workers’ compensation system, which is financed by employers, by creating a presumption that any infection occurred on the job. NJBIA is urging members to contact the governor and ask him to veto this bill.




11 responses to “Murphy Signs Health Insurance Tax, Law Takes Effect Jan. 1”

  1. Paul says:

    Wonderful, additional taxes when both employers and employees are suffering most since The Great Depression. How can we let this continue?

  2. Dan says:

    You must be kidding. A presumption that employees contracted COVID at their job? … while employers require masks and social distancing so their employees can go out after work for drinks with their colleagues within 6 feet of each other and not wearing masks. Let’s not forget employee’s children either… we all know they are practicing social safeguards while their parents are on the job.

  3. Jerry says:

    Why would any business stay here if they don’t have to?

  4. Benchman says:

    It looks like after 31 yrs owning a small mfg co in nj – I will be relocating for my final 8-10 yrs – I expect to be gone by next spring.
    This is only the beginning of the asinine decisions coming up. When will the public/state/school employees show some sacrifice as we all are?
    Start the layoffs and cuts – there’s no use putting off the inevitable. NJ is broke – the monies aren’t there and never will be – sell your house to a New Yorker and move on – it’s our only choice now

    • Don says:

      When will public/state/school employees show some sacrifice? You don’t pay attention much do you?

  5. Judy says:

    The health insurance has already been killing our employees. As a small business with a private plan it is a disaster every year in deciding what to do about the plan. Every year I tell my agent there has to be another way!! The premiums are high and the deductible high and we have tried every means to have an affordable plan that isn’t total garbage for our employees. We pay 1/2 their premium and give them $625 toward the first part of the deductible but the rates are insane. A family is paying $207 per week for their HALF!! They have to pay negotiated rates at the dr. until the deductible is met which is $3600 for a family. These are hard working employees making $18 to $25 per hour. Our business is small and not a large corp that can afford a gold plan. If we could we would do that, we are as generous as we can be without going out of business. Increases have to be passed on so it is ABSOLUTELY unfair to these hard working individuals (who most of the time cannot even go to the dr or take their children because of the costs) to pay more for a plan they cannot use just to subsidize others!!!!!!

    • Gui says:


      I was reading through the comment to get some feedback, and i am sorry to hear what your organizations are going through. Cost containment is a more relevant topic than ever during this challenging time. I work in the benefits space. Have you or your team explore self-funded or Reference base pricing plans for your employees that could potentially help with the cost.

      Just a thought for you as there has been a lot of creative solutions that could possibily help you and your employees

  6. Maura says:

    Why would people with healthcare have to pay a tax? What is the incentive for people that don’t really use their plans to keep them. The idea in keeping a plan’s premiums at a somewhat affordable level is for the balance for those that utilize the and those the infrequently use it(but it is necessary to have in case needed) to keep costs and renewal rates down.
    By taxing health plans those that have that are healthy will be more apt to drop their coverage due to the tax. The goal is to ensure MORE people have health coverage.

    This, then, leaves the full burden of the costs of plan on those that do use it more often. This creates higher claims ratio’s that will cause massive premium increases. Which, in turn, will cause many theses individuals who rely on their coverage to drop their needed medical coverage and not take care of their health. Which creates more serious health issues and financial hardship on not only the employee (if they can retain a job), the employer and the state.

    This “Little” tax will cost, already overburdened employees and employers, more money now but will cause premiums to sky rocket for many. This is not the time for this tax, with so many individuals out of work or working with reduced hours, this is a tremendous hardship during this already catastrophic time in our lives.

    I hope that those in Trenton seriously rethink this tax mandate and truly see that it will have monumental negative effects on all involved.

  7. phil f ryan says:

    this guy is ass he dose not care about working class, we need change in office tell them to take pay cut and pay for there health benefit are taxes pay there salary and health coverage

  8. Judith L Pidgeon says:

    Is he gonna tax my Medicare, Medigap and Part D policies?

    • Bob says:

      Of course he will tax everything you got, medicare, Medigap and anything else you paid for…We are a sanctuary state, do i really need to tell you who is going to benefit from your new tax dollars..