July 2026
Governor Sherrill signed a new law creating an annual assessment on employers with 50 or more employees enrolled in State Medicaid. An employer is subject to the assessment if it employed 50 or more workers who received State Medicaid coverage at any point in the prior calendar year. The law counts both employees and their Medicaid-enrolled dependents toward the fee. The purpose of the fee is to raise revenue to defray State Medicaid cost, with an estimated net revenue increase of $154.1 million in FY 2027 alone. The law became effective July 1, 2026.
The Fee Structure
The assessment is billed per enrolled employee and per enrolled dependent, based on total Medicaid enrollment tied to the employer:
$325 per person for employers with 50 to 249 enrolled
$525 per person for employers with 250 to 499 enrolled
$725 per person for employers with 500 or more enrolled
The state will notify employers by March 1 each year based on enrollment as of the prior December 31. Payment and any required filings are due April 15, submitted electronically to the Division of Revenue and Enterprise Services.
Exclusions
The law exempts employees and dependents with a developmental disability, intellectual disability, or permanent physical disability, as defined under existing state statutes.
Starting July 1, 2027, three additional categories are excluded:
• Employees on the job less than 90 days at the time the fee is calculated
• Part-time, per diem, or temporary employees
• Seasonal employees
If an employer is charged for someone who would qualify for one of these three exclusions before the 2027 start date, the law provides a credit against future liability, or a refund if there is no offsetting liability, in the following year. The employer bears the burden of proving eligibility for the exclusion.
Penalties and Appeals
Unpaid fees carry a penalty of up to $500 per day, per affected employee or dependent. Employers can appeal an assessment through the Department of Labor and Workforce Development, with further appeal available to the Appellate Division. The fee itself must still be paid while an appeal is pending; only the refund, not any penalty already paid, is recoverable if the employer wins.
The commissioner also has audit authority and can require employers to produce books and records tied to the assessment.
Nondiscrimination and Confidentiality Requirements
Employers cannot use an applicant’s or employee’s Medicaid enrollment status as a basis for hiring, firing, or promotion decisions. Individually identifiable Medicaid enrollment data collected for this program is confidential, exempt from OPRA, and restricted to official use.