Federal appeals court rules ERISA trumps Maryland Wal-Mart health care law

[JURIST] A panel of the US Court of Appeals for the Fourth Circuit [official website] on Wednesday ruled [opinion, PDF] that the federal Employee Retirement Income Security Act (ERISA) [text] preempts the Maryland Fair Share Health Care Fund Act [text, PDF] requiring Wal-Mart to spend the equivalent of eight percent of each individual store's payroll on employee health insurance. In a 2-1 decision, the court upheld a district court ruling [JURIST report] and determined that the Maryland violates ERISA by not allowing Wal-Mart to create a uniform employee health benefit program nationwide. Judge Paul V. Niemeyer wrote:

Because Maryland's Fair Share Health Care Fund Act effectively requires employers in Maryland covered by the Act to restructure their employee health insurance plans, it conflicts with ERISA's goal of permitting uniform nationwide administration of these plans...The Maryland General Assembly, in furtherance of its effort to require Wal-Mart to spend more money on employee health benefits and thus reduce Wal-Mart's employees' reliance on Medicaid, enacted the Fair Share Act. Not disguised was Maryland's purpose to require Wal-Mart to change, at least in Maryland, its employee benefit plans and how they are administered. This goal, however, directly clashes with ERISA's preemption provision and ERISA's purpose of authorizing Wal-Mart and others like it to provide uniform health benefits to its employees on a nationwide basis.
The Maryland law would have required companies with more than 10,000 employees to spend at least eight percent on employee health care, or pay the difference of that amount into the state Medicaid fund. The Retail Industry Leaders Association (RILA) [trade website], of which Wal-Mart is a member, filed a challenge to the health care law [JURIST report] last year, arguing that the law is preempted by the federal ERISA, and that the law violates the equal protection clause of the constitution. The New York Times has more.


 

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