Lawsuit Filed Challenging Recent Health Care Mandates

February 7, 2006 ( - The Retail Industry Leaders Association has filed a lawsuit challenging the new Fair Share Health Care Act recently passed in Maryland and a similar bill passed last fall in New York.

The Association said the two laws illegally mandate specific health care expenditures and threaten to take away flexibility businesses need to deal with their employees, according to the Associated Press.

The Maryland law, which requires employers in the state with more than 10,000 employees to spend at least 8% of payroll on health care or contribute to a state Medicaid fund, was enacted in January (See Veto of ‘Wal-Mart Bill’ Overridden in MD Senate). The other law was passed in Suffolk County, New York and requires large, non-unionized retailers to set aside at least $3 for every hour an employee works to pay for their employees’ health-care costs (See NewsDash – November 1).

The association also said the two laws are invalid because they violate the federal Employee Retirement Income Security Act, according to the AP. The Maryland Chamber of Commerce made the same charge before the veto override vote of the state’s Fair Share Health Care Act (See Maryland ‘Wal-Mart Bill’ Preempted by ERISA).

“Over the past three decades, the Supreme Court of the United States has held repeatedly that ERISA, not state and local laws, regulates employer health plans,” said Steve Cannon, outside general counsel to the association, in the news report.

The communications director for the union-backed group Wake Up Wal-Mart, which lobbied for the bill in Maryland, predicted it will withstand a court challenge.

The Association’s complaint is here .