The bill establishes the NJ FamilyCare Stabilization Fund, a nonlapsing, revolving fund within the Department of the Treasury, aimed at supporting the state's publicly funded health insurance program for low-income individuals, which includes Medicaid and the Children's Health Insurance Program. It mandates that five percent of the state's unreserved - undesignated General Fund balance, as determined by the annual appropriations act, be appropriated to this fund each fiscal year. For example, in FY 2026, this would amount to approximately $335 million. The fund's resources will be utilized by the Division of Medical Assistance and Health Services to maintain existing NJ FamilyCare services and benefits during fiscal years when federal reimbursements are expected to decrease by 15 percent or more compared to the previous year.

Additionally, the bill stipulates that disbursements from the fund are limited to 60 percent of the fund balance as of July 1 of the applicable fiscal year. It also requires the State Treasurer to report annually on the fund's status and the Department of Human Services to document expenditures and projections related to the fund. This initiative is particularly timely given the anticipated reductions in federal funding for the NJ FamilyCare Program due to recent changes in federal law, aiming to ensure continued access to comprehensive health benefits for the state's most vulnerable residents.