As Colorado policymakers grapple with the state’s increasing Medicaid costs, an Arvada legislator has an idea for how to fill some of the gap.
Her bill would levy fees on large employers that have hundreds — if not thousands — of workers receiving public assistance for health care.
“We can’t afford to subsidize Walmart and Target and Amazon off the backs of our taxpayers,” said Rep. Lisa Feret, an Arvada Democrat. “Especially when we’re cutting services for disabled people in the same year.”
House Bill 1327 would apply to a small group of large companies, requiring them to pay a $2,300 fee for each worker whose pay is low enough to qualify for Medicaid, the federal-state safety net health insurance program. The money would then flow back to the state to support Medicaid providers, who face rate cuts this year amid broader existential fears about the program’s overall fiscal future.
The bill, Feret said, would help bring in more money for state Medicaid while trying to nudge large employers to offer health care to a wider swath of workers so they could avoid the fee.
The measure would apply to companies with more than 500 employees, and the fee would take effect starting Aug. 1, 2028. It wouldn’t apply to employers that offer health coverage to employees working more than 20 hours per week; are nonprofits or franchises, like fast-food restaurants; or are public entities.
At least 25,000 Coloradans on Medicaid work for companies that would covered by the bill, according to a nonpartisan legislative analysis. A list provided by Feret identifies eight companies that would be covered; the legislative analysis didn’t have an estimate for how many employers would be covered, but analysts assumed it would be fewer than 50 in total.
Citing data she received from the state Department of Health Care Policy and Financing, Feret said Walmart employed an average of 9,000 Colorado workers who were on Medicaid between May 2023 and July 2025, meaning that 31% of its total workforce in the state received Medicaid. Amazon averaged just under 6,300 workers on Medicaid in that time period, or 40% of its Colorado workforce. Target clocked in at 2,738 workers, or 33%.
The idea is gaining attention elsewhere as Medicaid costs rise nationwide.
New Jersey Gov. Mikie Sherrill has proposed fining the companies $725 for each worker on Medicaid. Lawmakers in Washington proposed similar legislation earlier this year, though they dropped the proposal last month, according to the Washington State Standard. Another bill, still alive in the Oregon legislature, would require that state to publicly identify companies with high numbers of workers on Medicaid.
The new Colorado bill wouldn’t be enough to shore up the state’s multibillion-dollar Medicaid program. Because of state fiscal rules, the fund set up by HB-1327 could raise only $100 million over its first five years. Anything over that would be deposited into a second fund, which would count toward the revenue cap instituted by the Taxpayer’s Bill of Rights.
“We get the intention behind the bill, and it’s really a good one, to ask large employers who benefit from public benefits to pay a little more to help offset those costs,” said Kathy White, the executive director of the liberal Colorado Fiscal Institute.
Still, she cautioned that the policy may have unintended consequences.
Large companies “will change their behavior to make their labor costs less,” she continued. “And if you’re making it more expensive for them to hire workers who are likely to be on Medicaid, they either aren’t going to hire those workers who are likely to be on Medicaid, or they’re going to reduce wages and benefits across the board.”
Feret said she, too, was concerned about the bill prompting changes to employer behavior. She said she planned to amend the bill to include additional reporting requirements, so that the state could monitor how large companies were adapting in response.
White said CFI was working with Feret, and with national partners, to address those concerns.
Large employers are opposed to the bill. In a statement, Walmart spokesman Jimmy Carter said the fees would be passed on to consumers and would “raise system-wide costs and make groceries, essentials and pharmacy items more expensive.”
Like Carter, Amazon spokeswoman Alisa Carroll touted efforts undertaken by the $2.2 trillion company to increase workers’ pay and ease access to company-provided health insurance. Target and Home Depot did not return messages seeking comment for this story.
Katie Wolf, of the Colorado Retail Council, said the bill would discourage larger employers from hiring part-time workers.
“The way that taxes work currently is that everyone pays in and a lot of that money goes to Medicaid now,” she said. “So I would say all these companies are paying their fair share and what they’re supposed to be paying to cover employees.”
HB-1327 is set for its first committee hearing in the House’s Health and Human Services Committee on Tuesday.
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