A federal court has invalidated Maryland’s mandated health benefits law, which required nongovernmental for-profit employers with 10,000 or more employees to spend a minimum of 8% of payroll on healthcare insurance for workers or contribute to a state Medicaid fund. A lawsuit brought by the Retail Industry Leaders Association alleged that Maryland’s Fair Share Health Care Fund Act violated the federal Employment Retirement Income Security Act, which establishes a national standard of employers’ benefit plans. “My finding that the act is preempted is in accordance with long established Supreme Court law that state laws which impose employer health or welfare mandates on employers are invalid under ERISA,” ruled Judge J. Frederick Motz. The only employer affected by Maryland’s law is Wal-Mart, which, as a multistate employer, has the right under ERISA to “maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration,” wrote Motz.
RILA issued a statement that Motz’s decision “sends a clear signal that employer health plans are governed by federal law, not a patchwork of state and local laws. It also is a clear message that similar bills under consideration in other states and municipalities violate federal law as well.”
Maryland’s state attorney general will likely appeal the decision, and state legislators said they would write a new bill if the appeal does not succeed, according to The New York Times. “To continue to allow this huge corporation to take profits out of the state without providing adequate healthcare coverage would be wrong,” said the Democratic president of the Maryland Senate, Thomas V. Mike Miller Jr.
Read the judge's ruling. Read the New York Times article. Read the RILA statement.
