Maryland Opts Not To Appeal Overturned Health Benefits Law
Maryland Attorney General Douglas Gansler (D) on Monday said that the state would not appeal a second federal ruling against a state law that would have required Wal-Mart Stores to increase spending on health care for employees, the AP/Chicago Sun-Times reports (AP/Chicago Sun-Times, 4/17).
The law, enacted on Jan. 12, 2006, would have required 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 was the only employer in Maryland that the law would have affected.
The Retail Industry Leaders Association, a retail industry group that includes Wal-Mart, in February 2006 filed a lawsuit in U.S. District Court in Baltimore over allegations that the Maryland law violates the federal Employee Retirement Income Security Act, among other allegations.
In July 2006, Judge J. Frederick Motz ruled that the Maryland law violated ERISA, which has a "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.
A three-judge panel of the Maryland Court of Appeals for the 4th Circuit in January upheld the lower court decision (California Healthline, 1/18).
Gansler said an appeal to the U.S. Supreme Court likely would fail, but even if it succeeded, litigation could take years and would hinder other efforts to expand health coverage in the state.
According to Gansler, although the law never took effect, it has "had a great impact in the state and on the nation." He added, "Today, Wal-Mart offers health care to more of its part-time employees and has drastically reduced copayments for prescription drugs."
Maryland Department of Labor, Licensing & Regulation Secretary Thomas Perez, who represented Gov. Martin O'Malley (D) at a news conference, said that future health care proposals in the state might be modeled after the Massachusetts health insurance law, which requires all state residents to obtain health insurance, creates a private insurance exchange, provides public subsidies for low-income residents and requires contributions from businesses. "Massachusetts is certainly a state we will look at very, very closely," Perez said.
Bill Kilberg, an attorney who represented RILA in the case, said that if the Maryland law would have been upheld, employers would have ended up "with 50-some-odd different" health insurance mandates and plans, "which would make any one of those plans far more expensive to provide than they are now" (Green, Baltimore Sun, 4/17).