New regulations require able-bodied adult Medicaid recipients to show proof of work before they qualify for benefits. The requirements are not that strict. Adults aged 19 to 64 must be in school, volunteer or work the equivalent of part time to receive benefits. The argument is that people should try to improve their own situation before they ask others for help. However, there are exceptions for serious medical conditions for enrollees who are too sick to work. How do you prove you are not healthy enough to work? Doctors are not eager to be the ones to decide.
A job is the best way out of poverty. That should be self-evident, but some states are working at cross-purposes. There are initiatives in several states to penalize employers whose workers (and / or dependents) are on public assistance.
This past June New Jersey passed a law to fine employers with at least 50 workers and their dependents on Medicaid. The fee would be $325 per enrolled beneficiary for firms with 50 to 249 employees or dependents on Medicaid. Penalties would top out at $725 for firms with more than 500 employees and dependents on Medicaid.
California is exploring a similar penalty for firms employing workers on Medicaid and their dependents. The following from CBS News:
California lawmakers seek to revive an expired law that would require the state to identify companies that employ 100 or more people and have employees enrolled in Medi-Cal, the state’s Medicaid program. Nevada has had a similar law in place since 2017, though a proposal for one in Oregon stalled when its legislative session ended in March.
Kaiser Family Foundation (KFF) Health News reported:
Bills that would have penalized companies with workers enrolled in Medicaid failed in Washington state and Colorado this year.
For the most part these laws and proposals are a money grab from large employers like Walmart and Amazon to subsidize the state’s cost of Medicaid benefits. There is a belief that firms owe it to their workers to provide health benefits. Indeed, the Affordable Care Act requires employers to offer health coverage. Moreover, the employee’s share of the cost for a (60% actuarial value) plan cannot exceed 9.96% of household income. However, many families believe that cost is too much and do not enroll or do not work enough hours to quality for health benefits. More from KFF Health News:
In Nevada, Amazon has employed more Medicaid enrollees than any other company since 2020, according to the state’s report published in January. For state fiscal year 2025, Walmart, the Clark County School District, the state government, and Tesla rounded out the top five.
Another problem with states’ attempts to recoup Medicaid costs from large employers is many of the Medicaid recipients identified are seasonal and part-time workers. Amazon reports that its fulltime workers earn too much to qualify for Medicaid, for instance.
Finally, a significant problem with fining firms who employ workers on Medicaid is one potential result would be to disadvantage workers in the job market who depend on Medicaid. The federal government wants Medicaid enrollees to have a job, but states are trying to penalize the firms who hire them. MIT economist Jonathan Gruber found years ago that the cost of a specific mandated benefit is often borne by the people it was designed to help. It is then logical to assume anything that makes it more expensive to hire workers enrolled in Medicaid would disadvantage those workers, especially if the potential worker had dependents also on Medicaid. Imagine a singe mother with three children trying to get a job at Walmart if hiring managers realize her employment will cost $2,900 in penalties.
Read more at KFF Health News: Facing Funding Losses, States Call Out Big Businesses With Employees on Medicaid