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Maryland Lawmakers Set To Overturn Veto Of 'Fair Share' Bill

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Maryland lawmakers were set to vote late last week to overturn Governor Robert Ehrlich’s veto of “Fair Share” legislation that would require certain employers to spend a minimum percentage of their payroll toward employee health care.

Kim Nelson, a spokesperson for the Maryland campaign of Americans for Health Care, said the group was “cautiously optimistic” that both chambers of the Maryland Legislature would vote to overturn the veto. Americans for Health Care was established by the Service Employees International Union, or SEIU, to promote health care for workers.

“They’ve taken a strong stand on this issue since last spring,” she said. The legislature initially passed the bill in April 2005.

The state Senate was expected to vote on whether to overturn the veto on Jan. 12, with the House expected to decide the issue as late as Jan. 13.

The legislation would require companies with a minimum of 10,000 employees to spend at least 8% of their payroll on their employees’ health care, either by providing health care coverage in one form or another or by paying directly into a fund to offset taxpayers’ expense for providing coverage through the state. The Fair Share legislation is also known as the “Wal-Mart Bill” because the retailer is the only employer in the state that would be affected by the legislation.

Providing those options is a key to the bill. Gov. Ehrlich has said that, should the veto be overturned, he would examine the law thoroughly for any conflicts with the federal Employee Retirement Income Savings Act.

Nelson said that Americans for Health Care had the Fair Share legislation reviewed by a professor at George Washington University to ensure it would work with federal statutes and is confident no conflicts will be found.

“We did our homework ahead of time,” she said. “Fair Share health care is ironclad as far as legality.”

Nelson also said that the legislation–and the concept behind it–is supported by Supreme Court decisions made over the past decade and that it fits the “spirit” of the federal law, which is known as ERISA.

ERISA, she explained, was enacted as a measure to ensure that no state laws would be passed allowing insurance companies to “pad their pockets” at the expense of employees. Fair Share legislation, she said, avoids conflicts with federal law by avoiding insurance issues entirely.

“The Fair Share legislation does not mandate anything to the insurance industry,” Nelson said, noting that the bill requires only that employers spend money rather than dictating where it goes. How employers spend the money, whether through purchasing coverage, encouraging employees to open Health Savings Accounts, or simply putting it into the state fund, “is up to them,” she added.

In fact, Nelson said she saw the discussion of a legal challenge to the Maryland Fair Share legislation as a positive, at least in its timing. “The first thing the opposition wants to do is throw a lawsuit at you,” once they believe they will be defeated, she said, adding that she sees the governor’s mention of such a challenge, “as sort of a good sign.”

The vote to overturn Gov. Ehrlich’s veto is likely only the prelude to what will be occurring in statehouses across the country. According to Americans for Health Care, more than 30 states are expected to introduce Fair Share legislation during their legislative sessions this year.

Opponents of the Fair Share legislation argue that the concept does little actually to help control health care costs and does not offer a real solution to the issue of increasing the number of Americans covered by health insurance.

James Klein, president of the American Benefits Council, has said that the group “finds these ‘fair share health care’ initiatives neither fair nor do they share the work of reform needed to extend high quality, efficiently priced health coverage to the 46 million Americans who are uninsured.”

“We believe that employers, government and individuals all have a role to play in addressing the cost and quality of our health care system,” Klein added. “That is fair. Genuine systemic changes in our health care system will only occur when all of us are working together to achieve improvements.”

The U.S. Chamber of Commerce also has opposed Fair Share legislation, warning that states that enact such legislation, including Maryland, will be hurting their own image within the business community.

“When Governor Ehrlich vetoed this legislation, he acted in the best interests of his constituents and helped cement Maryland’s stature as a good place to do business,” said Bruce Josten, executive vice president for government affairs for the Chamber. “Overturning his veto would severely damage the prospects for business expansion and job growth in the state.”