Maryland Attorneys Argue for Health Spending Law

Attorneys for the state of Maryland on Thursday argued before a federal appeals court in defense of a law that would require Wal-Mart Stores to increase spending on health care for employees, the AP/Hampton Roads Daily Press reports (Chen Sampson, AP/Hampton Roads Daily Press, 11/30).

The law, which was enacted on Jan. 12 but overturned in July by U.S. District Judge J. Frederick Motz, would require employers in Maryland with 10,000 or more employees to spend at least 8% of payroll costs on health care or contribute to a state fund for the uninsured. Wal-Mart would be the only employer in Maryland affected by the law.

The Retail Industry Leaders Association, a retail industry group that includes Wal-Mart, in February filed a lawsuit in U.S. District Court in Baltimore alleging that the Maryland law violates the federal Employee Retirement Income Security Act, among other allegations.

In his decision, Motz ruled that the Maryland law "violates ERISA's fundamental purpose of permitting multistate employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration." He also ruled that the Maryland law injured Wal-Mart because the company would have had to report to the state information on payroll and health care spending, a requirement imposed on no other companies in the state (California Healthline, 7/20).

Arguing before a three-judge panel of the U.S. Court of Appeals for the 4th Circuit, Maryland Assistant Attorney General Steven Sullivan said the Maryland law would not conflict with federal regulations because Wal-Mart had a choice between increasing health spending or paying a tax.

RILA attorney William Kilberg said those options amounted to a false choice, noting that no employer would choose to pay a state tax rather than expand health care coverage for its own workers. He said the company's only real option would be to increase health care costs. Kilberg also predicted that similar laws would be enacted in states and localities if the appeals court overturned the lower court ruling (Dolan/Green, Baltimore Sun, 12/1).