a citizen’s journal by Thomas Nephew

Retailers sue Maryland over Fair Share Health Care law

Posted by Thomas Nephew on February 8th, 2006

A retail industry association is suing Maryland to overturn the Fair Share Health Care Act, which requires companies with over 10,000 employees to pay at least 8% of payroll in health benefits to workers and/or to a state Medicaid fund. Douglas Tallman of the Montgomery County Gazette reports:

In its U.S. District Court suit, the Retail Industry Leaders Association claims the law violates the Employee Retirement Income Security Act, or ERISA, a 1974 federal law that leaves all regulation of health benefits to Congress.

Tallman adds that RILA is also claiming that the Maryland law violates the equal protection clause of the U.S. Constitution because it allegedly singles out one company (Wal-Mart) for arbitrary treatment.

As noted here at the time, the ERISA argument was also made by the Maryland Chamber of Commerce the week of the January veto override that made the bill law. Legal experts including the Maryland State Attorney General considered the claim weak. In its coverage of the suit, the Baltimore Sun noted:

Attorney General J. Joseph Curran Jr. issued his own advice letter last month, arguing that the Maryland law did not conflict with federal rules because it does not force employers to provide a specific level of health benefits. Rather, it gave companies the option of spending a certain amount on health care or paying a tax to the state.

A 1995 Supreme Court ruling explicitly gave states more discretion in this policy area vis-a-vis ERISA, as long as specific benefits weren’t prescribed.

The “singling out” charge has also been popular, though not usually dressed up as an equal protection issue. The argument seems nonsensical to me; the Fair Share bill doesn’t target Wal-Mart by name, but by its size, just as different laws and regulations are made to apply to large vehicles than to smaller ones. Developing…

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