AB 2729 California Assembly · 2025-2026 Regular Session

Medi-Cal: Employer Responsibility for Medi-Cal Trust Fund.

Summary

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions. Existing federal law, Public Law 119-21, enacted on July 4, 2025, sets forth various changes to different health care programs, including certain requirements for Medicaid eligibility with regard to work or community engagement reporting, redeterminations, and cost sharing, among other factors, for certain Medicaid populations pursuant to a specified implementation timeline. Existing law, the federal Patient Protection and Affordable Care Act, imposes a certain assessment on an applicable large employer, as defined, that offers full-time employees and their dependents the opportunity to enroll in minimum essential coverage, and for whom one or more full-time employees have been certified as having enrolled in a qualified health plan for which a premium tax credit or cost-sharing reduction is allowed or paid. This bill would create the Employer Responsibility for Medi-Cal Trust Fund to consist of new taxes and deposits, including employer penalties specified in the Budget Act of 2026. The bill would continuously appropriate moneys in the fund to the department to fund the costs of administering the Medi-Cal program in a manner necessary to prevent loss of or to restore health care coverage, benefits, or access to care following the passage of Public Law 119-21 and subsequent state budget actions. The bill would state that these provisions would become operative only if the Medicaid provisions of Public Law 119-21 are not repealed prior to January 1, 2027. By creating a continuously appropriated fund, the bill would make an appropriation. This bill would declare that it is to take effect immediately as an urgency statute.

Issues: ✓ Healthcare

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 20, 2026 Last action May 19, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

05/18/26 - Amended Assembly → AB2729 · 3 edits

MINOR

The changes between these two versions of AB 2729 are primarily technical and editorial. The bill text was reformatted from a printed legislative document layout (with line numbers and page headers) into a web-published format. Minor textual cleanups include simplifying redundant references to 'federal House Resolution 1 (Public Law 119-21)' to just 'Public Law 119-21' in some places, using the president's full name 'Donald J. Trump' instead of just 'Trump,' and removing a redundant word 'department' after 'State Department of Health Care Services.' No substantive policy changes were made.

TECHNICAL

References to 'federal House Resolution 1 (Public Law 119-21)' were simplified to 'Public Law 119-21' in the legislative counsel's digest and Section 1(e), removing redundant naming of the same law.

The president's name was changed from 'Trump' to 'Donald J. Trump' in Section 1(d) for formal usage.

The word 'department' was removed after 'State Department of Health Care Services' in the digest, eliminating a redundant term.

03/19/26 - Amended Assembly → 05/18/26 - Amended Assembly · 4 edits · May 18, 2026

MODERATE

AB 2729 was amended to add an urgency clause making the bill take effect immediately upon approval rather than waiting until January 1, and to reframe the legislative digest by describing federal Public Law 119-21 as existing law with specific Medicaid eligibility requirements (work reporting, redeterminations, cost sharing). The bill also removed a standalone section stating legislative intent to require employer penalties, folding that concept into the fund creation language instead.

Scope change

The bill's scope did not substantively change in terms of what it does (creates a continuously appropriated fund for Medi-Cal administration), but its timing changed significantly due to the urgency clause, allowing immediate effect rather than January 1. The digest also broadened the description of the federal law context by specifying particular Medicaid eligibility requirements imposed by Public Law 119-21.

TIMELINE

A new Section 3 was added declaring the act an urgency statute under Article IV of the California Constitution, making it take effect immediately rather than on January 1. The stated necessity is that recent federal actions under Public Law 119-21 threaten to increase barriers to health care coverage, disproportionately affecting working families, immigrants with humanitarian protections, and communities facing systemic inequities.

SCOPE

The legislative counsel's digest was restructured to describe Public Law 119-21 as existing federal law that sets requirements for Medicaid eligibility including work or community engagement reporting, redeterminations, and cost sharing for certain Medicaid populations, rather than only referencing it in the context of the fund's purpose.

REQUIREMENT

The standalone section stating 'It is the intent of the Legislature to enact legislation that would require employers that employ individuals who are enrolled in the Medi-Cal program to pay a penalty as a contribution to a Medi-Cal fund' was removed from the operative text. The employer penalty concept remains referenced within the fund creation section but no longer has its own dedicated section.

TECHNICAL

Procedural vote and appropriation designations changed from 'Vote: majority 2/3, Appropriation: no, Fiscal committee: no' to 'Vote: 2/3, Appropriation: yes, Fiscal committee: yes,' reflecting the addition of the urgency clause.

02/20/26 - Introduced → 03/19/26 - Amended Assembly · 6 edits · Mar 19, 2026

MODERATE

The amended version of AB 2729 adds a new 'Employer Responsibility for Medi-Cal Trust Fund' (Welfare and Institutions Code Section 14199.5) that would be continuously appropriated to the Department of Health Care Services to prevent loss of or restore Medi-Cal coverage following federal House Resolution 1 (Public Law 119-21). The fund would consist of new taxes and deposits, including employer penalties, as specified in the Budget Act of 2026. The bill also adds extensive legislative findings about the impact of HR1 on California's uninsured population and changes the required vote from a simple majority to two-thirds.

Scope change

The bill expanded from a narrow statement of legislative intent about future employer penalties to an operative law creating a specific trust fund with continuous appropriations, a sunset condition tied to federal legislation, and detailed funding mechanisms. The scope now directly addresses the financial impact of federal House Resolution 1 on California's Medi-Cal program.

FISCAL

Creates the Employer Responsibility for Medi-Cal Trust Fund in the State Treasury, consisting of new taxes and deposits (including employer penalties) as specified in the Budget Act of 2026. The total amount is determined by the Director of Finance in consultation with the Treasurer.

Moneys in the fund are continuously appropriated without regard to fiscal years to the State Department of Health Care Services to fund direct and indirect costs of administering Medi-Cal to prevent loss of or restore health care coverage following HR1 and subsequent state budget actions.

TIMELINE

The new trust fund section (WIC 14199.5) only becomes operative if the Medicaid provisions of federal House Resolution 1 (Public Law 119-21) are not repealed prior to January 1, 2027.

SCOPE

Adds legislative findings stating that 14.5 million Californians are covered by Medi-Cal, an estimated 2.5 million remained uninsured in 2024, and that HR1 will significantly increase the number of uninsured Californians.

The bill now explicitly makes an appropriation (continuously appropriated fund), which was not present in the introduced version. The digest and title were updated to reflect this.

ENFORCEMENT

The required vote to pass the bill changed from a simple majority to a two-thirds majority, indicating the amendment may implicate constitutional or procedural requirements related to the appropriation.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 19, 2026

Committee

Re-referred to Com. on APPR.

lower

May 18, 2026

Lower · Passed

Read second time and amended.

lower

May 14, 2026

Introduced

From committee: Amend, and re-refer to Com. on APPR. (Ayes 11. Noes 4.) (May 14).

lower

May 6, 2026

Committee

In committee: Set, first hearing. Referred to APPR. suspense file.

lower

Apr 22, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 3.) (April 21). Re-referred to Com. on APPR.

lower

Mar 23, 2026

Committee

Re-referred to Com. on HEALTH.

lower

Mar 19, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended.

lower

Mar 19, 2026

Committee

Referred to Com. on HEALTH.

lower

Feb 21, 2026

Lower · Passed

From printer. May be heard in committee March 23.

lower

1 primary · 16 co-sponsors