Thursday, January 12, 2006
Update: Maryland Attorney General disagrees with my preemption analysis (thanks to Matt Bodie at PrawfsBlawg for the tip).
This just in: House Overrides Governor's Veto on Maryland Wal-Mart Bill.
Maryland's Senate voted today to become the first state to enact a law forcing large employers -- namely Wal-Mart Stores Inc. -- to spend a certain amount of their payrolls in the state on health insurance for their workers.
The Senate voted 30-17 this afternoon to override Republican Gov. Bob Ehrlich's veto of the bill last year. The Maryland House, needing 85 votes for an override, is expected to vote this evening.
The bill proposed requiring employers with more than 10,000 workers in Maryland to pay a penalty to the state's health-insurance program if they fall short of paying the equivalent of 8% of their payroll in the state for health insurance for those employees.
Only four companies are large enough in Maryland to be covered by the bill; Of those, only Bentonville, Ark.-based Wal-Mart might fall short of the 8% threshold and therefore pay a penalty. Wal-Mart representatives told Maryland lawmakers last year that the company's contributions toward health insurance for Maryland workers equaled between 7% and 8% of its payroll in the state. Wal-Mart employs 16,988 workers at 53 stores and two warehouses in Maryland.
Wal-Mart spokesman Nate Hurst declined to comment on Wal-Mart's plans should the override effort succeed.
All of this, of couse, is very interesting to this employee benefits guy, but I wonder whether such a law would survive ERISA preemption?
Recall that Massachusetts and Illinois are considering legislation which would require employers to foot the bill for employee health care through a "pay-or-play system." My previous post discussing those laws is here.
My first impression conclusion here is probably the same conclusion I came to there: it all depends on whether Wal-Mart self-insures its health plans. If it does, the deemer clause should lead to ERISA preemption of the state law; if not (that is, it insures its health plans through another company), it should be saved from ERISA preemption as a law that regulates insurance under ERISA's Savings Clause.
Hat Tip: Peter Lattman