Wednesday, July 19, 2006

Court Overturns "Walmart Health Care" law

Last year the Maryland assembly, over the veto of Governor Erlich, passed a law requiring "large" employers to provide health care/benefits equal to 8% of their total benefits. The law's definition of "large" was written so that Walmart was the only employer effected. The law was pushed in part by Maryland and national unions as a way to get back at Walmart for being a non-union employee -- even though the Walmart benefits were already better than some union benefits.

Today, a Federal Judge overturned the law:

BALTIMORE (AP) -- A first-of-its-kind state law that would have required Wal-Mart Stores Inc. to spend more on employee health care in Maryland is invalid under federal law, a judge ruled Wednesday.

The state law would have required non-governmental employers with 10,000 or more workers to spend at least 8 percent of payroll on health care or pay the difference in taxes. The measure was directly aimed at Bentonville, Ark.-based Wal-Mart...
Motz cited the federal Employee Retirement Income Security Act, which he said pre-empts "any and all state laws insofar as they may now or hereafter relate to any employee benefit plan."

"My finding that the act is pre-empted is in accordance with long established Supreme Court law that state laws which impose health or welfare mandates on employers are invalid under ERISA," Motz wrote in his 32-page opinion.

Wal-Mart Chief Executive Lee Scott said the ruling meant businesses would not have to contend with different standards in different states for health coverage.

"The thing that we find encouraging is that there is going to be consistency, that the federal government is going to be the control point on health insurance and these kinds of issues, so that commerce itself, businesses, will be able to have one set of standards that they work against," Scott said during an appearance on the Rev. Al Sharpton's syndicated radio show.

I'm happy to see the law overturned, although I thought it was a bad law to begin with for other reasons. For example, one way Walmart could meet the requirements of the law would be to offer fewer "part-time" employment opportunities (which didn't have access to the same level of health care), or perversely to lower the pay of their employees so that the health care was more than 8% of the adjusted employee pay.

The state argued that the law was necessary because too many companies had decided to no longer offer medical insurance as an employee benefit, and the employees, rather than buy their own insurance, would instead use the state-run medicaid program.

In other words, what used to be part of a contract between a company and the workers they were trying to hire, was now to be made a government-mandated benefit of employment, all because the government couldn't bring itself to regulate its own benefits programs.

The problem with government benefits is that politicians get votes from people who get stuff form the government, but rarely get votes for cutting people out of the programs. So the state, which stuck it's nose in the normally private business of people taking care of their own health and buying their own insurance or paying their own way to the doctors, now is upset that too many citizens might take advantage of the state largess, and decided the best thing to do was kill two birds with one stone and punish a large company hated by the unions that elect the majority-democrat legislature.

As I've said before, someone ought to think about removing health care as an employee benefit, which would force medical insurance companies to compete directly for the health care dollars of it's "customers", like most other insurance.

But whatever the reason, the world is a little better off today, now that this law has been nullified.

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