Legislation introduced this year in the legislature of Washington state, which would have created a new employer tax tied to Medicaid enrollment, ultimately failed to advance. However, many observers expect similar proposals to emerge next year, in Washington and in other states, as policy makers search for new ways to fund public health programs.
The bill, SB 6173, sought to establish an “Apple Health Employer Assessment” that would apply to employers with 100 or more employees in Washington if any of their workers were enrolled in the state’s Medicaid program, known as Apple Health. Under the proposal, employers meeting that threshold would be required to pay a monthly state assessment for each employee enrolled in Medicaid, with the revenue directed to Washington’s health care affordability account to help offset the state’s growing Medicaid costs.
The assessment would be equal to the number of months an employee is enrolled in Medicaid multiplied by the state’s Medicaid “fair share” capitation rate, representing the per-person monthly Medicaid managed care payment—approximately $607 for 2026.
Supporters argued that the state faces mounting fiscal pressure associated with funding Apple Health and that large employers whose workers rely on public coverage should contribute to the program’s costs. Proponents also framed the bill as a way to encourage employers to offer more comprehensive health benefits and reduce reliance on publicly funded coverage.
Business groups and employer organizations strongly opposed the measure, emphasizing that employers often have little control over whether an employee qualifies for Medicaid. Eligibility is based on factors such as household income, family size, disability status, and an employee’s personal decision to enroll in public coverage rather than an employer-sponsored plan.
Critics also warned that the proposal could create unintended consequences in the labor market. By imposing a financial assessment when employees are enrolled in Apple Health, the bill could discourage employers from hiring individuals who are more likely to qualify for Medicaid, such as low-income workers or those transitioning back into the workforce after periods of unemployment.
In practice, this dynamic could make it harder for economically vulnerable individuals to secure employment at the very moment they are attempting to move off public assistance and into the workforce. Temporary staffing firms often play a key role in this transition by helping workers re-enter the labor market, gain experience, and build income stability.
Although the bill did not move forward this year, the debate highlights growing pressure felt in many states to identify new funding sources for public health programs. As federal funding allocations continue to evolve following passage of the July 2025 budget reconciliation bill, policy makers are increasingly exploring proposals that shift costs to employers.
ASA will continue to engage with lawmakers and broader business coalitions to ensure that proposals aimed at funding public health programs do not undermine workforce participation, limit hiring opportunities for vulnerable workers, or disrupt the staffing industry’s role in connecting people with work.