Walmart Legislation

Remember the so-called “Wal-Mart Bills”. This is where states have taken different measures to force employers like Wal-Mart into providing more of its employee’s healthcare. They may be coming to an end.

With employer-sponsored coverage continuing to erode, states had begun seeking new ways to encourage, coerce or downright force businesses to pick up more of the growing cost of covering the working uninsured.

It began in Maryland when legislators passed a first-of-its-kind law in January 2006 forcing retail giant Wal-Mart to pick up a greater share of its workers’ health insurance costs. It was soon followed by many other states as “the model”.

Earlier this year, these employer coverage mandates was thrown into question when a federal appeals court upheld a lower court ruling that struck down the Maryland law. The 4th U.S. Circuit Court of Appeals in Richmond, Va., ruled that the state’s Fair Share Health Care Fund Act ran afoul of a 33-year-old federal statute governing private employer-sponsored benefit plans.

This ruling will likely lead to further challenges in many other states and any state contemplating a (coverage) mandate on business will likely think twice before proceeding. The court’s ruling seemed very clear that these kinds of statutes are pre-empted by federal law.

You can bet that attorneys will find new and innovative ways around this temporary roadblock, but for now, these companies may have a short reprieve. It seems clear that targeting certain companies based solely on their size doomed this legislation from the start.

This Maryland ruling may still be appealed and the Attorney General has not made the final decision.

Hawaii's law is the only state that has a mandate for companies to cover employees and it was passed before these other Federal legislations and therefore won a special exemption from Congress.