Colorado Bill Would Require Large Employers to Pay the State $2,300 per Employee on Medicaid
Brett Whitley, Associate
On March 9, 2026, Colorado legislators introduced House Bill 26-1327 titled, Large Employer Health-Care Support Enterprise Act (the “Bill”)[1] for the Colorado General Assembly’s consideration. By doing so, Colorado legislators supporting the Bill are aiming to reduce the costs of state-subsidized medical assistance benefits by imposing a fee of $2,300.00 on large employers for every employee receiving said benefits.
Background
Proponents of the Bill claim that, to date, large employers, like Walmart, Target, and JBS USA, have been actively avoiding providing health insurance to their employees by pushing them to part-time positions that do not require employers to offer health insurance. The Bill’s proponents argue that because large employers are avoiding providing health insurance to these part-time employees, these employees are resorting to enrolling in state-subsidized medical assistance benefits, which costs the state significantly and thus, contributes to Colorado’s general fund shortfall.
The Implications of the Large Employer Health-Care Support Enterprise Act
If the Bill becomes law, “large employers” could face a hefty price, known as an “enterprise fee” under the Bill. Specifically, large employers (in other words, an employer who has 500 or more employees who are receiving medical assistance benefits under Colorado’s medical assistance program) will pay $2,300.00 for each employee that receives medical assistance under Colorado’s medical assistance program. Under the Bill, these enterprise fees will help pay for the services that are provided by Colorado’s medical assistance program, which are commonly used by large employers’ part-time employees.
A large employer can avoid the enterprise fee by contesting that it qualifies as a large employer or by demonstrating that it provides healthcare insurance through a collective bargaining agreement with its employees or provides affordable health insurance to all of its employees working 20 or more hours per week or 80 or more hours per month. A large employer can also avoid the enterprise fee by being a franchisee of the employer; a nonprofit employer; or a public employer.
A large employer faces a petty offense and is subject to a civil penalty totaling the same cost of the enterprise fee for each employee each employee that receives medical assistance under Colorado’s medical assistance program.
Opponents of the Bill contend that assessing these enterprise fees will only raise the costs of running a business and hiring workers, which will force the most impactful employers raise costs and stop hiring employees likely to use Colorado’s medical assistance program. Per these opponents, the Bill could even force the most important employers (those who employ thousands across the state) to leave Colorado. It is estimated that 37,200 workers across Colorado will be affected by the Bill. Ultimately, if the Bill becomes law, the enterprise fee would not take effect until 2028.
Employer Considerations
As stated above, the Bill could significantly affect the operations of some of the most economically impactful employers in Colorado. Employers who could qualify as “large employers” should therefore begin considering what the financial impact could be on their operations if the Bill becomes law, which will first require an audit of their Colorado employees who receives medical assistance under Colorado’s medical assistance program. Campbell Litigation will continue to monitor the Bill and any amendments to the same as it progresses through the legislation process.
[1] See H.B. 26-1327, 75th Gen. Assemb., 2nd Reg. Sess. (Colo. 2026), available at https://leg.colorado.gov/bill_files/113080/download.