Amazon, Walmart and Other Large Employers Could Face New Costs As New Jersey Targets Companies With Medicaid Workers— Will Other States Foll

New Jersey will begin charging companies whose workers rely on Medicaid, as Democratic-led states look for new ways to fund the growing cost of public healthcare amid tightening federal rules, according to the Associated Press.

Governor Mikie Sherrill (D-NJ) signed the measure Tuesday night, creating a new employer fee for businesses with at least 50 workers enrolled in Medicaid.

Medicaid is the joint federal-state health insurance program for low-income Americans.

Under the law, companies will be charged for each employee and dependent receiving Medicaid coverage.

Annual fees start at $325 per person for employers with 50 to 249 Medicaid beneficiaries and rise to $725 for employers with at least 500 beneficiaries.

New Jersey’s budget expects the program to generate roughly $145 million this year.

According to a 2024 report from the New Jersey Department of Human Services cited by New Jersey Monitor, Amazon.com Inc. (NASDAQ: AMZN ) was the largest employer of Medicaid recipients in the state, with about 5,600 workers and more than 10,000 dependents enrolled in the program.

Walmart Inc (NASDAQ: WMT ) had more than 10,000 workers and family members on Medicaid, while Century II Staffing had just over 9,000.

Federal Pressure Builds The move comes as states brace for higher Medicaid costs under new federal rules.

Last month, the Centers for Medicare & Medicaid Services rolled out implementation guidance for Medicaid work requirements set to begin in 2027.

Under the policy, certain beneficiaries ages 19 to 64 must complete at least 80 hours per month of work, education, community service or other qualifying activities to maintain eligibility.

The Congressional Budget Office previously estimated 7.5 million people could lose Medicaid coverage by 2034 as the rules take effect.

Federal scrutiny around Medicaid spending has also intensified.

In June, the Trump administration sued New York officials and Public Partnerships LLC over an alleged $10 billion Medicaid fraud scheme tied to a home-care program, signaling broader efforts to curb fraud, waste and abuse in the system.

Other Democratic-led states are now exploring similar employer-based Medicaid fees.

California lawmakers recently advanced legislation directing officials to study such a charge, while similar proposals surfaced in Colorado, Oregon and Connecticut.

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Christopher Emigholz, chief government affairs officer at the New Jersey Business and Industry Association, said employers may be unfairly penalized when workers voluntarily choose Medicaid over company-sponsored insurance, according to the Associated Press.

Some progressive policy groups also raised concerns that the fee could discourage employers from hiring low-income workers or single parents.

New Jersey’s legislation attempts to address those concerns by exempting temporary, seasonal and part-time workers while barring employment decisions based on Medicaid status.

The policy revives an idea previously attempted in Massachusetts and Maryland, though earlier versions faced legal and political resistance.

As Medicaid costs continue climbing, more states may revisit similar measures.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published editors.

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