As expected, a retail front group filed a lawsuit this week to overturn a health care law in Maryland that requires employers with more than 10,000 workers, like Wal-Mart, to pay their “fair share” of employee health costs. The Retail Industry Leaders Association (RILA), based in Virginia, charges that the Fair Share Health Act is illegal under the federal Employee Retirement Income Security Act (ERISA). RILA called the Maryland law, which requires large employers to pay 8% of their payroll costs into employee health insurance, or pay the difference into a state fund to pay for the public Medicaid program, a “political gimmick” and “hollow gestures that are inconsistent with federal policy.” RILA says the new law will “stunt growth.” The lawsuit was filed in New York and Baltimore. The new law goes into effect this week, over the veto of Governor Robert Ehrlich. RILA’s lawsuit allows Wal-Mart to stay behind the headlines, and try to stay out of the public’s eye. A company spokesman said Wal-Mart supports the lawsuit, but is not directly involved in the legal action beyond its membership in the trade group. “We share RILA’s opinion that existing law states that employee benefits plans are regulated by the federal government and not by the states,” Wal-Mart told the Baltimore Sun.”We believe that the challenges facing our country’s health system are national problems that require national solutions.” RILA tried to defend the retail industry’s lack of health for its workers, noting that “The retail industry needs the flexibility to meet the insurance needs of their diverse work force.” That’s jargon for “we don’t want to cut into profits by providing health care when we can shift that cost to federal taxpayers.” RILA’s main argument seems to be that ERISA was created to provide continuity on the national level for employers, and the Maryland’s would create inconsistent regulation at the state level. But Maryland’s Attorney General says no, the state laws does not conflict with federal rules because it does not force employers to provide a specific level of health benefits. The Maryland law does not mandate what any company’s health plan has to contain. It simply says companies have to spend a certain amount on health care or paying a tax to the state.Governor Ehrlich told the Baltimore Sun, “I will repeat my observation that Maryland – all of us – we’re bit players in this national play. The unions picked Maryland in its fight against a retailer it does not like.We will see how it plays out, since it was never about health care in any event.” Wal-Mart had originally warned that if this law was passed, it would stop work on a distribution center on the eastern shore of Maryland. The company withdrew that threat this week, and said they want to continue with their distribution facility in the Princess Anne area. In fact, many such distribution centers have been assisted with public welfare for roads, sewer lines, tax breaks, etc. “We will continue to build new stores in Maryland to meet the needs of our customers,” Wal-Mart said, lifting the punishment threat.
Wal-Mart Watch, a group critical of the giant retailer, released the following statement in response to the Maryland lawsuit: “By enlisting this trade group to do its legal maneuvering, Wal-Mart is clearly trying to shield itself from legal discovery and the continuing public relations fallout over its inadequate employee health care plans. Wal-Mart is also trying to intimidate other legislative bodies around the country who are considering similar measures. We agree that a solution to the nation’s health care crisis is in order, but we do not agree that Wal-Mart can continue to shirk its unique role in that crisis.”
