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New Jersey Becomes Second State to Mandate Individual Health Insurance


Last month, Governor Phil Murphy signed legislation to enact an individual health insurance mandate into law, making New Jersey the second state in the country to require all residents to have health coverage or pay a penalty. The law will take effect on January 1, 2019, providing officials with ample time to educate residents about the new requirement.

The bill signed by Governor Murphy, NJ A3380 (18R), was drafted by lawmakers in response to Congress’ decision to repeal a federal mandate established under the Affordable Care Act (ACA), which legislators feared would drive healthier individuals out of the state’s Obamacare market and cause health insurance premiums to spike.

As advocates state, the mandate is a critical protection for state residents who may find themselves in need of medical services, expected or otherwise. Without insurance, these individuals, including those harmed in unforeseen accidents, would be on the hook for what are often hefty medical bills. The new mandate, lawmakers say, helps keep people insured by mitigating significant premium increases and making health insurance more affordable, and keeps the market healthier.

By becoming the second state in the nation to pass such legislation, New Jersey follows the footsteps of Massachusetts, which passed an individual health insurance mandate that took effect more than a decade ago. That law also served as the model for the federal provision included in the ACA. As of 2016, Massachusetts had the lowest percentage of uninsured residents in the nation, with more than 97% of its population having health insurance. Similar efforts are being made in other states across the country, including Vermont, where Governor Phil Scott recently signed a similar measure to enact an individual health insurance mandate by 2020.

Under New Jersey’s new mandate, residents without health insurance will face an annual penalty of 2.5% of a household’s income or a per-person charge, whichever is greater. Maximum penalties based on household income will be the average yearly premium for a bronze plan, and when based on a per-person charge, will amount to $2,085. The law will also provide for a hardship exception for residents who are unable to afford health insurance, to be determined by the state treasurer. Money collected through these penalties – expected to be between $90 million to $100 million, would help fund a state reinsurance program, in addition to federal funding, and cover the costs of the most expensive patients and reduce average premium increased by as much as 20%.

At Levinson Axelrod, P.A., our New Jersey personal injury lawyers have decades of collective experience representing injured victims who face considerable strains when it comes to treating their injuries and paying for that treatment. Although we work to help clients cover these costs through personal injury claims when they are victims of negligence, we are well aware that medical care can be immensely expensive, especially without insurance. The new mandate is a sensible and solid approach to benefiting the communities and individuals we serve, and can help alleviate devastating financial burdens that hurt many families. We encourage our clients and other residents throughout the state to learn more about the new mandate and their options before the law takes effect on the first of next year.

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