Maryland Passes Law To Require Large Employers To Offer Health Coverage
The Maryland General Assembly on Thursday overrode Gov. Robert Ehrlich's (R) veto of a bill that will require employers with more than 10,000 workers in the state to spend at least 8% of their payroll on employee health care or to pay into a fund for the uninsured, USA Today reports (Armour, USA Today, 1/13). The House voted 88-50 to overturn Ehrlich's veto, and the Senate voted 30-17.
The law will take effect in 30 days. Four companies have 10,000 or more employees in Maryland, but Wal-Mart is the only company that will be affected by the law (Green, Baltimore Sun, 1/13). Wal-Mart employs about 17,000 people in Maryland (Wagner, Washington Post, 1/13).
The retail chain has faced "severe criticism" nationwide because it insures less than half of its U.S. employees, and Wal-Mart employees "routinely show up, in larger numbers than employees of other retailers, on state Medicaid rolls," the New York Times reports (Barbaro, New York Times, 1/13).
Ehrlich has argued that the bill would be an unjustified government intrusion into business (Washington Post, 1/13).
Wal-Mart executives have "strongly suggested" that they might build outside of Maryland a proposed distribution center employing about 1,000 people if the bill became law, the New York Times reports.
State Sen. Gloria Lawlah (D), a sponsor of the bill, said, "This is not a Wal-Mart bill, it's a Medicaid bill. This bill says to the conglomerates, 'Don't dump the employees that you refuse to insure into our Medicaid systems.'"
Ron Pollack, executive director of Families USA said, "You're going to see similar legislation being introduced and debated in at least three dozen more states, and at least some of those states will end up also requiring large employers to provide health care coverage" (New York Times, 1/13).
Nate Hurst, a spokesperson for Wal-Mart, said, "This vote was never about health care. This was about partisan politics in the Maryland gubernatorial race." Hurst added, "In voting to override this veto, the Senate has taken a giant step backward and placed the special interests of Washington, D.C., union leaders ahead of the well-being of the people they serve" (Ward, Washington Times, 1/13).
Before the vote, Ehrlich said, "I just know when I walk into the boardroom of a business in the next 90 days, I will be asked by a CEO, 'What does this mean for the business environment?' ... And I'm not going to have a good answer" (Baltimore Sun, 1/13).
AFL-CIO President John Sweeney said, "What the Maryland victory shows is that the tide is turning, because working people are not just fed up, they are ready to get active to set our country in a different direction, one state at a time."
Bruce Josten, executive vice president of government affairs at the U.S. Chamber of Commerce, said, "This will accomplish very little, and this totally misses the mark, which is to take appropriate steps to slow the kind of double-digit health care increases we've seen. This is so far off the mark it's incredible" (USA Today, 1/13).
Labor groups this week hope to "capitalize on anti-Wal-Mart sentiment and to build momentum" in a number of states, such as New Hampshire and Washington state, for legislation that would require large employers to increase spending on employee health insurance after Maryland enacted such a bill last week, the Washington Post reports. Labor groups plan to promote similar legislation in at least 31 states (Joyce/Mosk, Washington Post, 1/14).
In West Virginia, for example, a bill similar to the new Maryland law is under consideration in the state Legislature. The legislation likely would only affect Wal-Mart, which has 12,054 employees in West Virginia.
State Sen. Dan Foster (D) said, "The largest employer in the state doesn't provide what most people feel is an adequate level of health care" (Wall Street Journal, 1/17).
In related news, Wal-Mart spokesperson Sarah Clark on Friday said the U.S. Chamber of Commerce and the Maryland Chamber of Commerce have questioned the legality of the Maryland law.
Clark said, "I'm sure that is something our attorneys are looking into as we decide our course of action."
Henry Smith, an attorney who reviewed the law for the Maryland chamber, said that the legislation violates the federal Employee Retirement Income Security Act. Smith said, "Any state attempt to regulate an employee benefit plan is pre-empted by the federal employee benefit law because of the Congress' belief that a single federal regulatory scheme for employee benefits is preferable to 51 separate, varying state schemes."
Ronald Wineholt, vice president of the Maryland chamber, said that, although the group probably does not have legal standing to challenge the law, the legislation "is ripe for a legal challenge."
However, Maryland Attorney General Joseph Curran (D) in a letter said, "The Fair Share Act does not specifically refer to employee welfare benefit plans" (AP/Richmond Times-Dispatch, 1/14).
Several broadcast programs reported on Maryland lawmakers' ruling and its implications nationwide:
- APM's "Marketplace": The segment includes comments from Clark; Vincent DeMarco, president of the Maryland Citizens' Healthcare Initiative; Paul Kelly, senior vice president for federal and state government affairs at the Retail Industry Leaders Association; and Ron Pollack, executive director of Families USA (Palmer, "Marketplace," APM, 1/13). The complete segment is available online in RealPlayer.
- CBS' "Evening News": The segment includes comments from Maryland Dels. Anne Healey (D) and Herbert McMillan (R); Mia Masten, spokesperson for Wal-Mart; Pollack; Kevin Thornton, spokesperson for Wal-Mart; and Wal-Mart employees (Mason, "Evening News," CBS, 1/13). The complete segment is available online in Windows Media.
- NPR's "Morning Edition" on Friday reported on Maryland lawmakers' approval of the measure. The segment includes comments from Sarah Clark, spokesperson for Wal-Mart; Paul Kelly, senior vice president for federal and state government affairs at the Retail Industry Leaders Association; state Rep. Salima Siler Marriott (D); Thomas Middleton (D), chair of the state's Senate Finance Committee; and Naomi Walker, director of state legislative programs at AFL-CIO (Keyes, "Morning Edition," NPR, 1/13). The complete segment is available online in RealPlayer.