The $100,000 H-1B fee: Impact on the healthcare sector, legal challenge and current status

The H-1B visa program was created by Congress via the Immigration Act of 1990. The H-1B visa is a non-immigrant visa that permits U.S. employers to temporarily employ foreign workers in “specialty occupations,” which are roles that require advanced skills and knowledge normally associated with at least the obtainment of a bachelor’s degree or equivalent in a specific field of study. As a result, the H-1B visa program has long served as a critical mechanism for U.S. businesses, educational institutions and providers in the healthcare sector to address workforce shortages in highly skilled fields.

H-1B visas are valid for three years and can be extended for an additional three-year period. Persons holding H-1B visas can be sponsored for permanent residency (i.e., green card) status, and certain exceptions do exist to seek extensions of the H-1B visa status beyond the normal six-year maximum period where milestones in the green card sponsorship process are met.

The number of new H-1B visas issued annually is capped at 65,000, plus an additional 20,000 for individuals with a master’s degree or higher from a U.S. institution. These visas are distributed annually through a lottery system. Certain employers, including universities and nonprofit organizations, may qualify for exemptions from the annual H-1B cap limitations.

Late last year, the White House imposed a staggering $100,000 fee on all new H-1B visa applications, making these visas prohibitively expensive for many employers. Recently, this fee was ruled unlawful, leaving healthcare employers searching for answers about where things stand today and what can or should be done to adjust.

Implementation of the $100,000 Presidential Proclamation Fee

On September 19, 2025, the White House announced a Presidential Proclamation imposing a new $100,000 fee on employers filing petitions for “new” H-1B visas. Following the imposition of the $100,000 fee, which went into effect 24 hours after the announcement, the administration clarified that the new fee would apply only to H-1B petitions filed for persons who were outside of the United States, petitions filed for persons where the sponsoring employer did not request a change, amendment or extension of that person’s immigration status (referred to as “consular notification”), and petitions where the U.S. Citizenship and Immigration Services (USCIS) ultimately denied the employer’s request to change, amend or extend the sponsored person’s immigration status, even if that person was physically inside the United States.

The administration’s rationale centered on the argument that the H-1B program undercuts American workers. Critics of the program contend that it lures workers from overseas who are often willing to work for lower salaries compared to American workers.

Impact of the $100,000 fee on the healthcare sector

Hospitals and health systems across the United States are experiencing significant shortages of qualified healthcare professionals to fill critical roles. There are simply not enough physicians, nurses, physical therapists and other providers available to treat the increasingly complex health needs of patients, especially in rural areas. This problem is only expected to worsen over the next decade. The H-1B visa has served as an important tool allowing hospitals and health systems to help fill staffing needs across a variety of healthcare positions, including direct care and supporting roles.

The imposition of a $100,000 fee for each new H-1B petition dramatically impacted the ability of healthcare facilities to hire foreign-trained professionals. Although petitioners could apply for an exception to the fee, administration guidance stated that exceptions would be “extraordinarily rare.” In November 2025, the American Hospital Association conducted a survey of its members. Of the more than 1,000 health systems and hospitals that responded, more than 70% reported that they expected the increased H-1B fee to directly impact patient care.

These concerns proved well-founded. Very few organizations were willing or able to pay the fee. As of February 2026, the government had received only 85 payments of the $100,000 fee across all industries. For employers and other essential service providers operating on limited budgets, the fee effectively priced them out of sponsoring new H-1B visas.

Federal court vacates $100,000 fee requirement

On June 8, 2026, the U.S. District Court of Massachusetts issued a decision vacating (i.e., to annul or set aside) the Presidential Proclamation and granting summary judgment in favor of a coalition of twenty plaintiff states. The court held that the $100,000 H-1B fee was unlawful, finding that the administration’s implementation of the fee exceeded executive authority and violated governing legal principles.

The court’s ruling centered on several critical findings:

• Unauthorized Tax/Fee: The $100,000 payment requirement functioned effectively as a tax, which cannot be imposed absent clear congressional authorization.
• Separation of Powers Violation: By creating a substantial monetary requirement without legislative approval, the policy infringed upon Congress’s constitutional authority over immigration and taxation. The court emphasized that Congress — not the Executive Branch — holds the authority to impose taxes or fees of this magnitude in the immigration context.
• Administrative Procedure Act Violations: The court also found that the implementation of the fee did not comply with required rulemaking and procedural standards under the Administrative Procedures Act, which governs how federal agencies develop and issue regulations.

These findings collectively led the court to vacate the policy in its entirety.

Practical implications & key takeaways

The government is expected to appeal the decision and may ask the court to pause the ruling while the appeal is ongoing. If the court agrees, the $100,000 fee could still be required for now.

• Adjudication of New H-1B Visa Petitions Moving Forward: For the present, U.S. Citizenship and Immigration Services has not yet explained how it will handle the ruling. It is unclear whether the agency will stop requiring the fee right away, update its guidance or take another approach.
• Other Pending Litigation: Two separate cases challenging the $100,000 Presidential Proclamation also continue to proceed in other federal courts, setting up the possibility of divided rulings across three federal appellate circuits.

The rules around the fee requirement may continue to change in the coming months. Employers should continue to monitor this rapidly evolving legal landscape and consult with immigration counsel regarding pending or planned H-1B filings.

Brian Bumgardner is a business immigration shareholder at Ogletree Deakins in Raleigh.