N.J. Stat. § 2A:17-56.11b
The income withholding provisions of P.L. 1981, c.417 (C.2A:17-56.7 et seq.) shall be extended to include a withholding of income from the party responsible for maintaining medical support coverage for a child under a child support order issued pursuant to the provisions of N.J.S. 2A:34-23 when the child is eligible for medical assistance pursuant to P.L. 1968, c.413 (C.30:4D-1 et seq.) and the party responsible for maintaining medical support coverage has received payment from a third party for the cost of health care services provided to the child but has not reimbursed the obligee or the health care provider who provided the services for the amount of the payment. A payment received on or after April 1, 1995 shall be subject to the provisions of this section.
The income withholding shall be subject to the following conditions:
The Division of Medical Assistance and Health Services in the Department of Human Services, in consultation with the Administrative Office of the Courts, may initiate procedures for the withholding of income pursuant to this section.
As used in this section, "third party" means a third party as defined in section 3 of P.L. 1968, c.413 (C.30:4D-3).
N.J.S. § 2A:17-56.11b