Following the enactment of HR 1/Public Law 119-21 in July 2025, which included Medicaid funding cuts, Democratic-led states have renewed interest in requiring large employers to help fund state health care programs through taxes or employer assessments. Often referred to as “fair share” legislation, similar proposals gained attention in the 2000s but saw limited success. According to The Hill, at least 30 states considered such legislation in 2006.
Past Activity
- Maryland
- In 2006, Maryland became the only state to enact a “Fair Share” law, requiring employers with more than 10,000 employees to spend at least eight percent of payroll on health benefits or pay a state fee.
- Wal-Mart, the only affected employer, challenged the law along with the Retail Industry Leaders Association, arguing it was preempted by ERISA.
- The law was struck down by a federal court later that year.
- Massachusetts
- In 2017, the state temporarily increased Employer Medical Assistance Contribution fees and created a penalty to help fund MassHealth for employers averaging more than five employees per quarter.
- The provisions expired in 2019.
Activity During the 2026 Session
Bills That Failed
- Colorado HB 1327 passed the House but died in the Senate Finance Committee. The bill would have imposed a $2,300 annual fee per supported worker on employers with 500 or more workers that did not provide affordable health coverage.
- Oregon HB 4147 passed the House but died in the Senate upon adjournment. It would have required annual reporting on employers with 500 or more employees whose workers or dependents received state medical assistance.
- Washington HB 2300 failed in the House Health Care & Wellness Committee, while similar provisions in SB 6173 died in the Senate Ways & Means Committee. The legislation would have assessed employers with 500 or more Washington employees for state health care costs associated with workers enrolled in medical assistance programs.
Enacted Legislation
- California SB 177/Chapter 64, enacted July 6, 2026, directs the Department of Finance to recommend by March 1, 2027, options for holding the state’s largest corporations accountable for taxpayer costs associated with employees enrolled in Medi-Cal.
- New Jersey AB 5324/Chapter 23, effective July 1, 2026, establishes employer fees for businesses with at least 50 employees or dependents enrolled in Medicaid. Fees range from $325 per covered employee for smaller employers to $725 for employers with 500 or more employees.
Looking Ahead to 2027
Colorado, Oregon, and Washington are likely to revisit legislation introduced in 2026, while California is expected to consider additional proposals based on the study required under SB 177.
Connecticut may also join the trend. In June 2026, Democratic Gov. Ned Lamont proposed assessing for-profit employers with 100 or more employees and nonprofits with 1,000 or more employees up to $1,000 for each employee enrolled in HUSKY. The proposal is a revival of legislation considered 20 years ago but represents a notable shift for a governor who has generally opposed new business taxes and fees, according to the CT Mirror. At the same time, Connecticut was among the states that acted to offset reduced federal health care tax credits. Whether other Democratic-led states pursue similar employer assessments in 2027 remains to be seen.
FOCUS will continue to monitor developments on employer health care fees across the country.
by Alexis Sly 7/20/26
