From the Wall Street Journal–”Maryland Votes To Override Veto Of Wal-Mart Bill“:
Maryland legislators voted to become the first state to enact a law forcing large employers — namely Wal-Mart Stores Inc. — to pay a penalty if they fail to spend a certain amount of their payrolls in the state on health insurance for their workers.
The Senate voted 30-17 to override Republican Gov. Robert Ehrlich’s veto of the bill last year. The Maryland House followed suit last night with an 88-50 vote for the override.
The bill proposed requiring employers with more than 10,000 workers in Maryland to pay a penalty to the state’s health-insurance program if they fall short of paying an amount equal to 8% of their payroll in the state for health insurance for those employees. . .
The debate could continue in the courts. The Maryland Chamber of Commerce has argued that the potential new law will conflict with federal employment law, namely the Employee Retirement Income Security Act. Supporters counter that it isn’t pre-empted by ERISA.
Important links regarding the debate:
- Maryland Attorney General J. Joseph Curran Jr. (D) has opined that that the bill is not preempted by ERISA. Access his letter here.
- The Maryland Chamber of Commerce says that ERISA does preempt the legislation. You can access the letter here, prepared by Smith & Downey, in support of the Chamber’s view.
- Phyllis Borzi, a professor at the George Washington University School of Public Health and Health Services, has written a letter here opining that ERISA does not preempt the Fair Share Health Care Fund Act. (A summary of Borzi’s position from this article here: “Since 1995 the Supreme Court has adopted a more narrow interpretation of the pre-emption clause in the federal act, striking down state laws less frequently than before, said Borzi, who until 1995 served as employee benefit counsel for the U.S. House Committee on Education and Labor. She said ERISA would not pre-empt the fair share bill. “It’s just a tax, just like states can tax employers for anything,” she said, noting the assessment imposed by the legislation would be on employers, not on the benefits plan.”)
- Lots of links about the bill at the Maryland Chamber of Commerce Blog.
- The Wall Street Journal Law Blog has a post on the subject, and provides a link to a CNBC clip “of a heated exchange between lawyer Richard Berman and Chris Kofinis, of the United Food and Commercial Workers International Union, debating the Maryland bill.”
- University of Mississippi law professor Paul Secunda and author of Workplace Prof Blog provides his thoughts on the bill here.
This article from CNNMoney.com–”Maryland bill a big blow for Wal-Mart? Other states also considering bills that penalize companies for falling short on healthcare plans“-gives a run-down of the states that have tried to pass similar legislation:
Although the efforts failed in Arizona, California, Connecticut, New Hampshire and Tennessee, and was vetoed by Maryland’s and Vermont’s governors, the measure is still alive in five other states.
They include New York, Massachusetts, Minnesota, Oregon, Pennsylvania and Washington.