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Life Health > Health Insurance > Your Practice

Foes Of Wal-Mart Health Law Go To Court

By Matt Brady

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Opponents of a new Maryland law that requires very large employers to spend a portion of their payroll on employee health insurance Friday asked a federal judge for summary judgment against enforcement of the mandate.

Lawyers for the Retail Industry Leaders Association, Arlington, Va., argued before U.S. District Judge J. Frederick Motz in Baltimore that the law violates the U.S. Constitution’s Equal Protection Clause and is preempted by the federal Employee Retirement Income Security Act.

“Maryland’s mandated health benefit statute is unlawful,” says RILA President Sandy Kennedy. “The court should take this opportunity to overturn Maryland’s law.”

RILA arguments on the motion were made in court by Eugene Scalia, a lawyer in the Washington office of the law firm of Gibson, Dunn and Crutcher.

Steve Cannon, RILA’s outside general counsel, says the group believes the Maryland law runs counter to ERISA by establishing a separate set of rules for Maryland.

“Congress enacted ERISA in part to create uniformity in national health benefit plans,” Cannon says. “Congress recognized that uniformity, rather than a patchwork of state and local health benefit mandates, would serve as an incentive for employers to offer health coverage.”

Under the Maryland law, which was passed by state lawmakers over the veto of Gov. Robert Ehrlich, a Republican, companies employing more than 10,000 people in Maryland would have to spend 8% of their payroll on employee health benefits, either through an insurance plan or by paying into a state fund.

Proponents of the measure refer to it as “fair share” legislation, arguing that large companies that do not provide health benefits are shifting the burden of their employees’ health care to the state.

Opponents of the law have labeled it the “Wal-Mart law” because Wal-Mart Stores Inc., Bentonville, Ark., is the only company in Maryland that would be affected by it.

The case is Retail Industry Leaders Assoc. vs. Fielder JFM-06-316. The defendant, James Fielder, is Maryland’s secretary of labor, licensing and regulations.

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