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July 19, 2006 at 03:12 PM
A federal judge in Baltimore has overturned Maryland’s “Wal-Mart” health coverage mandate law, ruling in favor of the Retail Industry Leaders Association.
The Maryland law, enacted by the state legislature over the veto of Governor Robert Ehrlich, requires non-governmental employers with 10,000 or more employees to spend 8% of their payroll on employee health coverage, or to pay a similar amount to a state managed fund.
Judge J. Frederick Motz of the U.S. District Court in Baltimore says the Wal-Mart law, also known as a “fair share” law, is pre-empted by the federal Employee Retirement Income Security Act and violates the equal protection clause of the U.S. Constitution.
The Wal-Mart law would have required Wal-Mart, the only affected employer, to create a separate system for administering benefit plans in Maryland, Motz writes in an explanation of his ruling.
“The Fair Share Act creates health care spending requirements that are not applicable in most other jurisdictions,” Motz writes. “Moreover, its requirements directly conflict with the requirements of at least 2 other jurisdictions.”
The law also conflicts with health coverage mandate bills pending in Oklahoma and Minnesota, Motz writes.
Moreover, the intent of the law is to affect Wal-Mart’s contribution to its benefit plan, which also is pre-empted by ERISA, Motz writes.
“My finding that the act is preempted is in accordance with long established Supreme Court law that state laws which impose employee health or welfare mandates on employers are invalid under ERISA,” Motz writes.
