New Jersey enacted annual fees on larger employers based on the number of employees or dependents receiving Medicaid, with rates ranging from $325 to $725 per covered person depending on employer size. The state expects the policy to generate roughly $145 million amid pressure on Medicaid financing. Business groups sued on August 20, arguing among other things that the law conflicts with federal benefit law and may penalize hiring. The policy dispute is whether large low-wage employers should contribute directly to public health costs or whether Medicaid eligibility should remain independent of employer-specific assessments. If a company's compensation model leaves many workers relying on public coverage, taxpayers notice. But charging employers based on workers' enrollment can create its own bad incentives.