Connecticut employers raise concerns that Lamont’s Medicaid fee could cost jobs

A new healthcare fee sparks debate

Connecticut Governor Ned Lamont wants large employers to pay when workers rely on the state’s HUSKY Medicaid program. His proposal targets companies with sizeable workforces and public coverage use.

Supporters call it a fair contribution toward healthcare costs. Business groups warn that the added expense could reduce hiring, limit raises, or push companies to reconsider expansion plans.

Who would have to pay

The Fair Share Healthcare initiative would apply to for-profit employers with at least 100 workers. Nonprofit organizations with 1,000 or more employees would also fall under the proposal.

Covered employers could owe up to $1,000 for each worker enrolled in HUSKY. Smaller businesses and state-contracted social service providers would be excluded from the planned fee.

The plan could raise $100 million

Lamont says the employer fee could generate more than $100 million each year. The money would support healthcare affordability programs rather than flow into general state spending.

The administration plans to direct revenue toward Access Health CT and related subsidies. Those programs help residents who earn too much for Medicaid but still struggle with private insurance premiums.

Lamont calls it corporate welfare

Lamont argues profitable corporations should not shift employee healthcare costs onto taxpayers. He says businesses benefiting from Connecticut’s workforce should help cover public insurance used by their employees.

The governor presented the proposal near a Walmart in Wallingford, pointing to large employers with workers receiving public benefits. Walmart later rejected the policy as unfair and ineffective.

Employers warn costs will spread

The Connecticut Business and Industry Association says companies will not simply absorb the new charge. Employers may respond through slower hiring, smaller raises, higher prices, or reduced investment.

Business leaders describe the proposal as another tax on employment. They argue it could weaken Connecticut’s competitiveness when companies compare labor costs and expansion opportunities across different states.

Medicaid enrollment is not controlled

Employers say they cannot force eligible workers to join company health plans. Some employees may choose Medicaid because household income, family size, or coverage costs make it preferable.

Business groups argue the fee would punish companies for decisions they do not control. They also note that many employers already offer health insurance to qualifying workers.

Walmart defends its benefits

Walmart says eligible Connecticut employees can access medical coverage beginning at $38.30 per pay period. The company reports an average hourly wage of $19.31 in the state.

It argues the proposed fee would not reduce premiums, prescription prices, or other healthcare costs. Walmart says charging employers for hiring residents creates poor health and economic policy.

Amazon disputes public aid rankings

Amazon employs more than 15,000 full- and part-time workers across Connecticut. The company says it has invested more than $12 billion in the state since 2010 and supports thousands of additional indirect jobs.

Amazon says eligible employees can receive company-sponsored healthcare and has emphasized recent investments intended to increase pay and lower healthcare costs. Public-assistance totals involving large employers require context because companies with larger workforces may naturally have more employees enrolled in public programs.

Healthcare pressures are growing

Connecticut developed the proposal as federal policy changes and rising medical costs placed greater pressure on state healthcare programs. Officials are seeking recurring revenue rather than relying entirely on temporary reserves.

Access Health CT recorded 157,246 qualified-health-plan enrollments for 2026, a 4% increase and a new record. Connecticut provided $70 million in temporary assistance after enhanced federal premium tax credits expired, but officials remain concerned about future affordability.

Hospitals could face more unpaid care

Healthcare officials warn that some people losing affordable insurance may become uninsured rather than move into another form of coverage. Hospital emergency departments generally must screen and stabilize patients with emergency medical conditions regardless of their insurance status or ability to pay.

An increase in uninsured patients could raise hospitals’ uncompensated-care expenses, including charity care and unpaid bills. Those additional costs could place pressure on hospital finances, staffing and available services.

Other states are testing similar fees

New Jersey enacted a related employer charge in 2026 for companies with at least 50 workers covered by Medicaid. Fees vary with employer size and can reach $725 per person.

California also directed officials to develop options for charging large corporations tied to Medi-Cal enrollment. Connecticut supporters say these efforts reflect a wider state funding challenge.

Little-known fact: California raised its managed care tax to $8.85 per enrollee per month for 2027 through 2029.

Colorado’s proposal did not become law

Colorado lawmakers considered a related proposal that would have charged certain employers with at least 500 workers an annual fee for employees receiving Medicaid. The measure passed the state House but did not receive final Senate action before lawmakers adjourned in May 2026.

Connecticut’s proposal would use different employer thresholds and a lower maximum fee per covered worker. Its final provisions would require legislative approval and could change during that process.

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The legislature will decide the outcome

Lamont’s proposal is not yet law and would need approval from Connecticut legislators. Lawmakers will weigh healthcare funding needs against concerns about employment costs and business growth.

The debate centers on who should pay when workers use Medicaid. Its outcome could shape insurance subsidies, hiring decisions, and how other states approach similar employer fees elsewhere.

Curious who can receive more than $1,000 weekly? Learn how Connecticut calculates paid leave benefits.

Should Connecticut rethink Lamont’s Medicaid fee if employers say it may affect jobs? Let us know in the comments.

This slideshow was made with AI assistance and human editing.

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