WASHINGTON – Twenty-five states haven’t expanded their Medicaid programs, and that spells trouble for employers in those states, Politico reports. Under the Affordable Care Act, a business won’t be fined if an employee receives expanded Medicaid rather than a company-sponsored health care plan. But companies with 50 or more employees have to offer health care plans or be penalized.

A new study by Jackson Hewitt found that businesses in those states could face combined penalties of $1 billion beginning next year. In states without a Medicaid expansion, employees at or near the poverty level can receive premium tax credits on the exchanges, which would mean companies could face higher fines. Obamacare penalizes businesses when employees meet subsidy requirements or signs up for an exchange because the employer’s health plans don’t meet minimum coverage regulations.

Employer mandate fines have been delayed until 2015. Small businesses have been struggling with complying with the act. While more states could expand Medicaid, Florida and Texas have continued to oppose the optional program. In Florida, businesses would have to pay between $169 million and $253 million in fines. Texas companies could shell out between $266 million and $399 million in penalties.

Some businesses have been rallying behind the expansion program. Right now, employer groups are waiting for the Obama administration to provide finalized regulations on the business mandate and reporting rules.