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Published: August, 2006; Vol 3, Num 3

Maryland ‘Wal-Mart Law’ Overruled by Court

On July 19, a U.S, District Court judge struck down a Maryland law that would have required Wal-Mart to spend more money on health care for its employees, saying it violates the 32-year-old federal Employment Retirement Income Security Act (ERISA).

Passed last year, the Maryland law was the first of its kind in the nation. It had received wide publicity and had sparked similar legislative efforts in other states. Basically, it said that Wal-Mart and any other large employers in the state that did not spend at least eight percent of their payroll on health benefits would have to make a similar payment to the state’s insurance program for low-income residents.

Judge J. Frederick Motz ruled that the Maryland law “violates ERISA’s fundamental purpose of permitting multi-sate employers to maintain nationwide health and welfare plans, providing uniform national benefits and permitting uniform national administration.”

Maryland Attorney General J. Joseph Curran’s office indicated that an appeal is likely.

Republican Governor Robert L. Ehrlich, Jr. vetoed the original bill but his veto was overridden by the Democratic-controlled legislature. Polls show that 77 percent of Maryland voters supported the law, and it likely to be an issue in next year’s elections.

Wal-Mart has been battling a string of negative publicity surrounding its woeful health care benefits. However, over the last year, it announced some enhancements, including a reduction in the wait time for eligibility of part-time employees. A company spokesperson said the Maryland law would have done “nothing to control the cost of health care or improve access to health care.”

Maryland House Speaker Michael E. Busch (D) disagreed, saying Maryland is required by law to provide hospital care to those in need and those costs are passed along to the public in the form of higher premiums. “When large employers don’t provide health benefits, the rest of us pick up those costs,” he said.