Progressive group pans Murphy’s proposed corporate healthcare fee
TRENTON — As lawmakers begin examining Gov. Phil Murphy’s $40.9 billion budget plan, with the first of four public hearings Tuesday, the Democrat’s proposal is taking criticism from an unlikely source – a progressive think tank concerned about a proposed fee on some corporations.
Specifically, the D.C.-based Center on Budget and Policy Priorities says the "corporate responsibility fee" that Murphy proposes to levy on employers who have at least 50 workers getting health coverage through Medicaid, operated under the name NJ FamilyCare, would hurt those it seeks to help.
“We think this proposal is very well-intended, and we absolutely share the governor’s goals of raising working conditions and health coverage for workers,” said Chye-Ching Huang, the CBPP’s senior director of economic policy. “But we’re concerned that this proposal as it’s designed would almost certainly lead to unintended discrimination in hiring and layoffs.”
Under Murphy’s budget plan, companies with 50 to 500 employees would pay $325 for each worker on Medicaid. If they had 500 to 1,000 employees, they’d pay $525 for each on Medicaid. Those with over 1,000 employees would pay $725 apiece. In all, the proposed fee is budgeted to raise $180 million.
Murphy said that for each person enrolled in FamilyCare, New Jersey pays an average of $1,000 – without any contribution by their employers.
“There are large corporations in New Jersey that do not provide health benefits to their employees and their families, or who offer policies that their employees cannot afford,” Murphy said in his budget address. “When these families turn to Medicaid, it’s our taxpayers who pick up their health-care costs.”
But Huang said that to avoid the fees, companies are unlikely to offer health coverage or raise wages. She said employers always try to find the least costly options, meaning they’d try to avoid hiring people they think are on Medicaid or use subsidiaries or outside contractors with fewer labor protections.
“That unfortunately creates a situation where employers could either try to identify exactly which workers receive Medicaid and avoid hiring them or perhaps when there are layoffs, prioritize firing those workers,” Huang said.
“Many of these types of discrimination are already outlawed, and it’s quite hard to enforce,” she said. “And this would really pour fuel on the fire.”
Groups allied with Murphy, such as the New Jersey AFL-CIO and New Jersey Citizen Action, have endorsed the proposed health-care fee. Lawmakers, who didn’t advance a slimmed-down version of the plan Murphy proposed a year ago, haven’t been quick to embrace it.
“Only one other state in this nation has this tax,” said Assembly Minority Leader Jon Bramnick, R-Union, who said it would mean that “when you decide whether to bring a business into this state, you are looking at a supertax on your employees.”
Massachusetts is the only state that has imposed a corporate responsibility fee like the one Murphy proposes, though the fee in that state expired at the end of the 2019 after two years in effect.
More From WOBM News: