House Finance panel advances bill to charge some large employers to support Medicaid providers

The House Finance Committee advanced House Bill 13‑27 on a 6–5 vote after two sponsor amendments that narrow and clarify where enterprise funds can be used.

Sponsor Representative Ferre said the bill would "collect a reasonable fee by the nation's largest employers to help support providers and keep them, the Medicaid workers healthy and working," and that two amendments would address concerns raised by the attorney general's office and other stakeholders. The sponsor told members the measure is meant to stabilize provider rates and maintain access to care, not to solve the entire Medicaid shortfall.

Business groups and retail associations opposed the bill. "The bill is unverifiable, unequally applied and we urge a no vote," Katie Wolf of the Colorado Retail Council told the committee, arguing the measure operates as a penalty tax and would require employers to pay based on data they cannot independently verify. Parker White, representing the Colorado Competitive Council and the Denver Metro Chamber of Commerce, said definitions in the bill are "too broad and too unclear," warning employers could be exposed even when workers opt out of employer coverage.

Legal experts at the hearing told members the bill faces serious constitutional and statutory risks. Trey Rogers, an attorney testifying for business interests, said the measure likely "violates TABOR" because the proposed enterprise fee lacks the direct nexus to a service that enterprise fees typically require; he also warned of possible ERISA preemption. Committee members repeatedly asked how the enterprise model would satisfy TABOR's nexus requirement and how the statutory $2,300 per‑employee fee and the five‑year, $100,000,000 enterprise cap would interact with voter‑approval thresholds.

Proponents including the Colorado Nurses Association and the Department of Health Care Policy and Financing said the state faces immediate provider stability problems if reimbursement rates continue to fall. Adela Flores Brennan, Medicaid director, said the fee is targeted to employers that "benefit from Medicaid precisely because they do not offer that coverage," and she said the department has data and infrastructure to calculate the population targeted by the proposal.

During amendment debate the sponsor won two changes. Amendment L002 broadened allowable enterprise uses to include employer wellness and on‑site clinic funding as a tool to strengthen the legal "nexus" between payers and benefits; L003 explicitly limited enterprise collections to $100,000,000 over five years to mirror statutory caps raised by members. Both amendments passed by voice vote.

After testimony and amendment votes the committee gave the bill a favorable recommendation to the Committee on Appropriations by roll call, 6 to 5. The record shows the committee advanced the measure as amended; opponents warned litigation is likely whether or not the bill advances.

The committee’s action sends the measure for further fiscal and legal review on the House appropriations calendar.