Wal-Mart Questions MD Growth Because of Health Care Proposal

April 7, 2005 (PLANSPONSOR.com) - A health-care coverage bill proposal currently before the Maryland General Assembly could cause retailing giant Wal-Mart to rethink its growth plans for the state, Wal-Mart has asserted.

Although the legislation before the General Assembly does not name Wal-Mart, it appears to be the only company affected by it, the Washington Post reported. The measure would force employers with more than 10,000 employees to spend at least 8% of payroll on health benefits – or put the money directly into the state’s health program for the poor.

According to the Post report, the company said it would also have to rethink the opening of a new Maryland distribution center employing as many as 1,000. The company is planning to build an approximately 1-million-square-foot distribution center in the town of Princess Anne, Maryland.

The company questioned the motivation behind the bill, which is backed by a top competitor and its labor union. Wal-Mart “will have to rethink its future growth in a state that is willing to pass such a bad business bill,” Nate Hurst, a Wal-Mart government relations manager told the Post. “This type of legislation, where lawmakers single out one employer, does not create a favorable environment.”

But health benefits remain a focus of unwelcome attention for Wal-Mart. Organized labor and unionized retailers argue that because the discount chain covers less than half of its employees, companies across the economy are being forced to cut benefits to compete, dragging down workers’ standard of living.

According to the Post, the coalition backing the legislation said it expected similar bills to be introduced in several other state legislatures and, possibly, the US Congress.

Business groups worry the bill will hurt Maryland’s chances of attracting new companies. Robert Worcester, president of Maryland Business for Responsive Government, a business advocacy organization based in Baltimore, said companies big and small will now fear state intrusion into their health care plans.