a citizen’s journal by Thomas Nephew

RILA v. Fielder, ERISA, and Fair Share Health Care

Posted by Thomas Nephew on August 1st, 2006

On July 22, the Brennan Center for Justice released a memorandum explaining that RILA v. Fielder — the ruling overturning Maryland’s famous 2005-2006 “Fair Share Health Care” law — did not pose any obstacles for “big box living wage” legislation such as adopted by the Chicago City Council.*

This is very welcome news and analysis. The Chicago ordinance is a great example of a feasible, incremental approach to mitigating the burden on state health care systems posed by stingy employers like Wal-Mart, and it’s one that I hope Maryland legislators will study closely. Still, I found this introductory sentence irksome:

The trial court found that the Maryland law was preempted by ERISA because it effectively forced covered employers to modify their health benefits offerings in order to comply with the law.

No, Fair Share Health Care did not force or even “effectively” force employers to do any such thing. It may well have encouraged that, but it did not require it. Under Fair Share Health Care, large Maryland employers had (or will have, if the RILA v. Fielder ruling is overturned), the perfect and attractive right to pay the shortfall between their actual health benefits and 8% of payroll into a state Medicaid fund, instead of increasing health benefits.

That’s what’s called a choice, not a requirement; Wal-Mart could have kept its (pathetic) national health benefits package untouched, and spent 20 seconds cutting a check to the state Medicaid fund — advantage: simplicity, and whatever pleasure there is to be had in having a “significant percentage of associates and their children on public assistance,” to quote Susan Chambers, Wal-Mart’s Executive Vice President for Benefits.** Or it could have increased health benefits, either nationally or within Maryland — advantage: attracting/keeping workers.

Now I’m trying to plow through ERISA to see if I can figure out that legislation. So far, at least, I see nothing in it preventing states from providing incentives to companies to improve their health plans. If it does, it’s a stupid law. If it doesn’t, Judge Motz is a stupid judge.
=====< * Via eRobin.
** As State Senator Ida Ruben quite rightly points out. In particular, Ms. Chambers revealed that fully 27% of Wal-Mart associate children were on Medicaid. By arithmetic, another 19% were altogether uninsured.

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