A groundbreaking Maryland bill that would have forced giant discount retailer Wal-Mart to spend a specific percentage of its money on health care violates federal law, the U.S. Fourth Circuit Court of Appeals ruled Wednesday.
“The Maryland Chamber of Commerce told the General Assembly over a year ago that this Wal-Mart bill violates federal law,” said Ronald Wineholt, vice president of Government Affairs at the Maryland Chamber of Commerce. “We fought this bill from Day One, and we?re gratified that the Court of Appeals made the right decision.”
The state bill, called the Fair Share Health Care Fund Act, required employers with 10,000 or more Maryland employees to spend at least 8 percent of their total payrolls on employee health insurance or pay the difference in taxes.
Resulting from a nationwide campaign to force Wal-Mart to increase health insurance benefits for its 16,000 Maryland employees, the act?s minimum spending provision was crafted to cover just Wal-Mart, according to the opinion.
The Retail Industry Leaders Association, including Wal-Mart, filed suit against Maryland to declare that the law is pre-empted by the federal Employee Retirement Income Security Act of 1974.
U.S. District Court Judge J. Frederick Motz in Baltimore agreed that the Maryland bill was illegal and wrote it “imposes legally cognizable injury upon Wal-Mart.”
In affirming Motz?s decision Wednesday, Judge Paul Niemeyer of the U.S. Court of Appeals for the Fourth Circuit wrote: “As sensitive as we are to the right of Maryland and other states to enact laws of their own choosing, we are also bound to enforce ERISA as the ?supreme Law of the Land.? ”
Judge M. Blane Michael issued a dissenting opinion, arguing the state had the authority to enact the law.
“Maryland, like most states, is wrestling with explosive growth in the cost of Medicaid,” Michael wrote. “Innovative ideas for solving the funding crisis are required.”
Vincent Demarco, president of the Maryland Citizens? Health Initiative, said the “decision makes it even more necessary for the legislature to expand health care access this year.”
