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A2550 2R FISCAL ESTIMATE
LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
ASSEMBLY, No. 2550
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JULY 1, 2026
SUMMARY
Synopsis:
Requires continuation of health benefits dependent
coverage for certain children with disabilities who are 26 years of age or
older.
Type of Impact:
Annual expenditure increase for certain local governments
and school districts; annual State expenditure and revenue decreases.
Agencies Affected:
Certain local governments and school districts; Department
of Human Services; Department of Banking and Insurance.
Office of
Legislative Services Estimate
Fiscal Impact
Annual�
State Expenditure Decrease
Indeterminate
State Revenue Decrease (Federal Funds)
Indeterminate
Local Expenditure Increase
Indeterminate
�
The Office of Legislative Services (OLS) concludes that
permitting certain dependent adult children to receive healthcare coverage
indefinitely through a parent�s insurance plan will result in indeterminate
cost increases to local government and school district employers that provide
health insurance coverage for such dependents through private insurers. �Moreover,
this additional coverage required under the bill may affect the cost of future
contracts between local governments and private health insurers.
�
The OLS also finds that the State will realize indeterminate
reductions in Medicaid expenditures to the extent that adult dependent children
elect to continue healthcare coverage under a parent�s insurance plan in
addition to, or in lieu of, enrolling in NJ FamilyCare, the State�s Medicaid
program. �These reduced State Medicaid expenditures would also reduce the
amount of State revenue received from associated federal Medicaid cost
reimbursements.
�
The OLS further finds that additional, indeterminate State
savings will result from some adult children electing to continue healthcare
coverage under a parent�s insurance plan rather than enrolling in State-based
marketplace coverage, thereby reducing State expenditures on premium subsidies
for marketplace coverage.
BILL DESCRIPTION
����� This bill requires health insurers and group health
plans that provide dependent coverage to continue to make that coverage
available to adult children who are age 26 or older if: the adult child is
incapable of self-sustaining employment by reason of physical or intellectual
disability; the adult child is reliant on the plan subscriber for support and
maintenance; the child�s condition started before the child reached the
contract�s or policy�s age limit; and the child became insured by the contract or
policy before the child reached the dependent age limit and stayed continuously
insured thereafter.� The bill also provides that, if an insurance contract or
policy is replacing another health benefits plan that previously covered an adult
child incapable of self-sustaining employment due to physical or intellectual
disability, the contract or policy must offer dependent coverage to the child.
����� Current State law permits such dependents to receive
healthcare coverage through the plan subscriber�s insurance until the dependent
reaches age 31.�
FISCAL ANALYSIS
EXECUTIVE BRANCH
����� None received.
OFFICE OF LEGISLATIVE SERVICES
����� The OLS concludes that permitting certain dependent
adult children with disabilities to receive healthcare coverage indefinitely
through a parent�s insurance plan will result in indeterminate cost increases
to local government and school district employers that provide health insurance
coverage for such dependents through private insurers. �Moreover, this
additional coverage required under the bill may affect the cost of future
contracts between local governments and private health insurers. �Due to
insufficient data, the OLS cannot estimate the number of eligible adults with
disabilities likely to continue receiving coverage under their parents� insurance
or the aggregate increase in premiums or other costs likely to be incurred by
local governments and school districts.
����� At present, many of the adult children affected by the
bill are likely enrolled in NJ FamilyCare, the State�s Medicaid program, due to
receiving Supplemental Security Income benefits for persons with disabilities
(which confer automatic Medicaid eligibility) or by otherwise having monthly
incomes below the program�s eligibility thresholds. �Under the bill, some
affected adults may choose to continue receiving healthcare coverage via a
parent�s insurance while remaining enrolled in NJ FamilyCare, which would
become a secondary payer for services not fully reimbursed by the parent�s
insurance; other adults may continue their health coverage under a parent�s
insurance in lieu of enrolling in NJ FamilyCare.
����� In either case, these shifts would reduce State
Medicaid expenditures on coverage and services for the affected adults while
also reducing the amount of State revenue received from associated federal
Medicaid reimbursements. �These impacts would likely persist under the federal
One Big Beautiful Bill Act since most NJ FamilyCare members with disabilities
are expected to remain eligible for the program due to exemptions from new
Medicaid eligibility rules that begin in January 2027.� Based on available
data, however, the OLS cannot estimate how many adult NJ FamilyCare members
with disabilities have parents with private insurance, those members� likely
enrollment in private coverage under the bill (including any differential
impact on NJ FamilyCare members who are dually eligible for Medicare as
�disabled adult children� of Social Security beneficiaries), potential State
savings due to any reductions in NJ FamilyCare enrollment, or other expected
cost-shifting from NJ FamilyCare to private insurance for individuals who
dually enroll in both forms of coverage.
����� Finally, the OLS notes that some affected adults who
do not qualify for NJ FamilyCare due to income, immigration status, or other
factors may currently purchase health insurance via Get Covered New Jersey, the
State-based health insurance marketplace. �This marketplace coverage is
subsidized for eligible enrollees by a combination of federally funded premium
tax credits, federal cost-sharing reductions, and additional State premium
subsidies. �To the extent that some affected adults elect to continue their healthcare
coverage under a parent�s insurance plan rather than enroll in State-based
marketplace coverage, the State�s Health Insurance Affordability Fund would
realize savings due to these individuals no longer receiving State premium
subsidies for marketplace coverage. �The OLS has insufficient data to estimate
the number of these adults who are likely to substitute a parent�s insurance
for marketplace coverage and the potential State savings that would result.
Section:
State Government
Analyst:
Anna Harris
Associate Fiscal Analyst
Approved:
Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).