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Maryland: Overturning of the "Wal-Mart Bill"

In a case that many states have been watching closely, a federal judge overturned the Fair Share Act, a Maryland law requiring businesses with 10,000 or more employees to spend at least 8 percent of their payroll on health care or contribute to a state fund for the uninsured (described in March 2006 States in Action).

Termed "The Wal-Mart Bill" because the big-box chain is the only employer in Maryland it would have affected, the law was enacted in January 2006 after surviving the governor's veto. But the Retail Industry Leaders Association, a trade association whose members include Wal-Mart, challenged the law.

In July, U.S. District Judge J. Frederick Motz ruled that the law violated the federal Employee Retirement Income Security Act (ERISA).[1] The judge wrote that the law "imposes legally cognizable injury upon Wal-Mart by requiring it to make a report to the Secretary about the amount of its payroll and health care contributions and by requiring it to track and allocate benefits for its Maryland employees in a manner different from that in which it tracks and allocates benefits for its employees in other States."[2]

The state expects to appeal the decision. Some observers have pointed out that the law (and the threat of similar laws in other states) has already pressured Wal-Mart to expand its health benefits and build health clinics for employees.

[1] ERISA was enacted in 1974 to create uniform federal standards for employee benefits and protect against fraud and abuse. Its "preemption clause" states that the federal law supersedes state laws relating to employee benefit plans, in effect prohibiting states from mandating that employers pay for health insurance for employees.

For More Information
See: SB 790, The Fair Share Health Care Fund Act
NCSL Discussion

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