A federal judge yesterday overturned Maryland’s law requiring Wal-Mart to provide specific health benefits to employees on grounds that states have no such authority.
A first-of-its-kind state law that would have required Wal-Mart to spend more on employee health care in Maryland is invalid under federal law, a judge ruled Wednesday. The state law would have required non-governmental employers with 10,000 or more workers to spend at least 8 percent of payroll on health care or pay the difference in taxes. The measure was aimed at Bentonville, Ark.-based Wal-Mart Stores Inc., which has been under attack by critics who say that its inadequate health care offering is forcing some employees to use state-funded plans.
U.S. District Judge J. Frederick Motz decided that the Maryland Fair Share Health Care Fund Act would have hurt Wal-Mart by requiring it to track and allocate benefits for its Maryland employees in a different way from how it keeps track of employee benefits in other states. Motz wrote that the law “imposes legally cognizable injury upon Wal-Mart.” Motz cited the federal Employee Retirement Income Security Act, which he said pre-empts “any and all state laws insofar as they may now or hereafter relate to any employee benefit plan.” “My finding that the act is pre-empted is in accordance with long established Supreme Court law that state laws which impose health or welfare mandates on employers are invalid under ERISA,” Motz wrote in his 32-page opinion.
Wal-Mart Chief Executive Lee Scott said the ruling meant businesses would not have to contend with different standards in different states for health coverage.
I’m only tangentially familiar with ERISA or employment law in general, so this issue had never even occured to me. This ruling, if upheld, would bring to a grinding halt the move by unions and others to pursue this particular tactic. Additionally, it will likely delay for some time the move to nationalized health care, as big corporations would likely have allied themselves with unions in order to get out from under the burden of state-imposed benefit plans.
