Wal-Mart may challenge Md. law on health benefits

Maryland became the first state to pass legislation requiring retail giant Wal-Mart Stores Inc. to spend a minimum amount on health care for its employees or pay the difference in taxes as the Democrat-controlled legislature overrode a previous veto by Republican Gov. Robert Ehrlich.

Wal-Mart has indicated it may challenge the law in court.

The bill is written so that only Wal-Mart is affected. The measure, titled the Fair Share Health Care bill, requires companies with more than 10,000 employees to spend at least 8 percent of their payroll on health benefits, or pay the balance into a state health insurance fund. Wal-Mart has about 17,000 employees in Maryland.

At least 30 states are considering similar health care measures.

Sarah Clark, a Wal-Mart spokeswoman, said the U.S. Chamber of Commerce and the Maryland Chamber of Commerce had questioned the validity of the law. “I’m sure that is something our attorneys are looking into as we decide our course of action,” she said.

Supporters and opponents produced conflicting legal advice on the validity of the law. Henry A. Smith, a lawyer who reviewed the law for the Chamber of Commerce, said it violates the federal Employee Retirement Income Security Act, which pre-empts state regulation of employee benefits.

But the state attorney general’s office advised that the law does not violate the federal statute. “The Fair Share Act does not specifically refer to employee welfare benefit plans,” said Democratic Attorney General J. Joseph W. Curran.

Supporters say the law is needed because Maryland is underwriting the cost of health care for many Wal-Mart employees who can’t afford their share of premiums.

Wal-Mart has not provided specific information on Maryland, but the firm points out that three-quarters of its 1.3 million employees have coverage through the company, their family or Medicare.

“In allowing a bad bill to become a bad law, the General Assembly took a giant step backward and placed the special interests of Washington, D.C., union leaders ahead of the well being of the people they serve. And that’s wrong,” said Clark.

Labor union leaders applauded the law.

“We are pleased to see that Maryland legislators stepped up and made a statement about what kind of businesses they want in their state,” said Anna Burger, of the Service Employees International Union. “Marylanders deserve businesses that provide for their employees, pay a decent wage and provide affordable health care, not those that expect taxpayers to foot the bill for their bottom-line corporate profits. They get that with Fair Share Health Care.”