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DENVER, CO – The House Health & Human Services Committee today passed legislation to require Colorado’s largest employers to offer health care or contribute more to Colorado’s Medicaid program and safety net to help cover the cost of providing Medicaid to their employees.
“Colorado taxpayers should not subsidize the nation’s largest corporations by way of our state providing Medicaid for their employees,” said Rep. Lisa Feret, D-Arvada. “Every year, Colorado’s largest corporate employers rake in record-breaking profits and report sky high stock prices, yet they are forcing taxpayers to pick up the tab for their health insurance costs. This bill requires the largest corporate employers to pay their share of employee health insurance costs, or contribute more to Medicaid, so we can prevent further cuts to our safety net. We’re facing a nearly $1 billion budget deficit, and this bill would help protect and increase health care coverage for Coloradans.”
HB26-1327 passed committee by a vote of 8-5. This bill would ensure Medicaid remains a safety net for workers rather than a subsidy for some of Colorado’s largest corporate employers. To lower Medicaid costs for the state of Colorado, HB26-1327 would offer options to large corporations to expand employee health care coverage. Under this bill, the annual fee on corporations would be $2,300 per employee who is enrolled in Medicaid, which is approximately half the cost of Medicaid benefits to account for the fact that some employees are part-time.
By March 2028, HB26-1327 would require the state to identify large employers who are subject to the new fee. Only employers with more than 500 employees who are enrolled in Medicaid and meet an established hourly threshold must pay the fee or demonstrate that they provide affordable health coverage to their employees. This threshold is employees working more than 20 hours per week or more than 80 hours per month. An employer is exempt if it offers affordable health coverage to this population of workers. Franchisees, nonprofits, public employers, or employers that include health care coverage in their collective bargaining agreements with employees are also exempt.
Revenue from this fee will be used to cover care for adults on Medicaid and increase reimbursement rates for providers who accept Medicaid patients. It is estimated that at least 37,200 Medicaid-enrolled workers in Colorado are employed by corporations that would be subject to the fee. This bill would set up penalties for large employers who fail to pay their fair share or offer alternative, affordable care options to their employees.
Under H.R.1, corporations received a massive tax cut, paying nearly 40 percent less in income tax this year. Next year, corporations will pay $1 billion less in taxes than they did before Congress passed H.R.1. H.R. 1 paid for these massive tax giveaways in part by significantly reducing the federal contribution to Medicaid by scaling down provider fee financing over the coming years. In Colorado, this will reduce annual federal support for hospitals and Medicaid benefits by more than $300 million.
At the same time, Medicaid costs in Colorado have skyrocketed by nearly $1 billion a year while providing roughly the same services to roughly the same eligible population. Lawmakers on the Joint Budget Committee must close a $740 million gap in the state’s budget to meet its constitutionally required balanced budget.
The nation's largest corporations, while projecting to attain record profits, have an average of 30-40 percent of employees enrolled in Medicaid. According to the Kaiser Family Foundation, 75 percent of Medicaid recipients in Colorado are working.