Federal Appeals Court Agrees: Throw Out Wal-Mart Health Insurance Bill in Md.

By ESTHER NGUONLY, Capital News Service

WASHINGTON - A bill to force retail giant Wal-Mart to provide more health insurance for its workers was once again ruled invalid in a 4th U.S. Circuit Court of Appeals decision released Wednesday.

The federal appeals court upheld a lower court decision that overturned a controversial state law. That law, approved in January 2006 required Maryland employers with 10,000 or more employees to pay 8 percent of its total payroll on employee health insurance costs. The law affects only Wal-Mart Stores' 16,000 Maryland employees.

But the General Assembly is not going to let the issue die, said Maryland Senate President Thomas V. Mike Miller Jr., D-Calvert. Lawmakers, he said, have resolved to find a way to write the bill so that it will be passed.

Getting a bill that will stand a court challenge is important, he said, because the state must continue to subsidize health care to the 60 percent of Wal-Mart employees who do not have health insurance.

The bill had a rough road to passage. First approved by lawmakers in April 2005, it was vetoed by Republican Gov. Robert Ehrlich. But the General Assembly came back and overrode that veto in January 2006.

Wal-Mart is a member of the Retail Industry Leaders Association, which brought suit to overturn the Maryland law.

Then Federal District Judge J. Frederick Motz invalidated the law on the grounds that it violated part of the Employee Retirement Income Security Act of 1974.

Wal-Mart's spokesman Nate Hurst contended the language used in the original bill was politically-motivated, and the measure does nothing to control or improve the cost of health care.

Hurst said that 90.4 percent of Wal-Mart associates are covered by health insurance.

"We are pleased that the U.S. Court of Appeals has affirmed the Maryland Federal Court's decision," said Hurst. "Not only was this legislation widely viewed as bad public policy, the courts have confirmed that it violates the law."

The retail association, too, extolled the decision, saying it makes it clear that "employer health plans are governed by federal law, not a patchwork of state and local laws."

"The Court's decision," said RILA President Sandy Kennedy, "sends a strong message that similar bills under consideration in other states and municipalities also violate federal law."

Miller said he doesn't see legislation coming out of negotiation with Wal-Mart.

"Finding a common ground in these areas is impossible," said Miller. "We'll have Wal-Mart suing us again." Capital News Service reporter Liz Farmer contributed to this report.

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