Gino DiCaro

Maryland health care legislation struck down

By Gino DiCaro, VP, Communications

Capitol Update, July 21, 2006 Share this on FacebookTweet thisEmail this to a friend

A federal judge overturned a Maryland law on Wednesday, July 19th, that would have required employers with over 10,000 employees in the state to spend eight percent of their annual payroll on employee's health care coverage.  The law, which would have applied only to Wal-Mart in Maryland, is being proposed in a number of state legislatures around the country, including California.  

State Senator Carole Migden (D-San Francisco) introduced SB 1414 written as Maryland's law. The bill has been working its way through the legislature despite massive opposition from various business organizations.  

Judge J. Fredrick Motz ruled that the Maryland law would have hurt Wal-Mart by requiring it to track and administer that state's employee benefits differently than the rest of their employees out of state.  On that basis, the law is preempted by federal ERISA (Employment Retirement Income Security Act), which seeks to create a uniform system of benefit administration for multi-state employers.  

The significance of this ruling in California is notable as it sends a clear message to the legislature that they need to re-evaluate their strategy in dealing with the health care problems facing California.

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