Support for new Wal-Mart bill unsteady

Lawmakers seem to back away after appeals court strikes down 2006 law

Friday, Jan. 19, 2007

ANNAPOLIS — Several Democratic lawmakers appeared ready Thursday to give up a fight to force Wal-Mart to spend more on employee health coverage after a federal appeals court struck down a Maryland law.

‘‘I think we can accomplish so much more if we directed our energies in other ways to cover the uninsured,” said Del. Peter A. Hammen (D-Dist. 46) of Baltimore, chairman of the House Health and Government Operations Committee.

‘‘I think it was bad policy and bad politics, but it was mostly bad politics from the beginning,” said House Minority Leader Anthony J. O’Donnell (R-Dist. 29C) of Lusby.

The bill had been a signature legislative effort for Democrats. Other states were considering similar measures if it passed in Maryland.

The Maryland bill would have forced companies with more than 10,000 employees to spend at least 8 percent of their payrolls on health coverage for their workers. Only Wal-Mart was affected.

Largely party line votes passed the bill in the 2005 General Assembly. Gov. Robert L. Ehrlich Jr. (R) vetoed the measure as anti-business.

When lawmakers returned to Annapolis in 2006, overturning the veto was one of the first orders of business.

The Retail Industry Leaders Association then took the Wal-Mart law to court, and U.S. District Judge J. Frederick Motz struck it down. Motz agreed with RILA and other business groups that the legislature had violated the Employee Retirement Investment Security Act, or ERISA, which gives the federal government sole authority to regulate employee health plans.

On Wednesday, the 4th Circuit of the U.S. Court of Appeals in Richmond affirmed Motz on a 2-1 vote.

‘‘Not disguised was Maryland’s purpose to require Wal-Mart to change, at least in Maryland, its employee benefit plans and how they are administered. This goal, however, directly clashes with ERISA’s preemption provision and ERISA’s purpose of authorizing Wal-Mart and others like it to provide uniform health benefits to its employees on a nationwide basis,” said the majority opinion, written by Judge Paul V. Niemeyer.

‘‘Were we to approve Maryland’s enactment solely for its noble purpose, we would be leading a charge against the foundational policy of ERISA, and surely other States and local governments would follow.”

In his dissent, Judge M. Blane Michael wrote: ‘‘Maryland, like most states, is wrestling with explosive growth in the cost of Medicaid. Innovative ideas for solving the funding crisis are required, and the federal government, as the co-sponsor of Medicaid, has consistently called upon states to function as laboratories for developing workable solutions.”

Judging by the appeals court ruling, however, House Majority Leader Kumar P. Barve said he thought the idea was dead.

‘‘Unless we can be convinced there is a credible legal argument that allows us to go around the ERISA law, I don’t know how we could rewrite it,” said Barve (D-Dist. 17) of Rockville.

Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach was not ready to concede defeat in the battle against the retail giant.

‘‘Big corporations should be brought to heel. Teddy Roosevelt did it. Martin O’Malley should be able to do it as well,” Miller said.

His was one of a few voices calling for the battle to continue.

‘‘I think the Wal-Mart bill has proven to be more divisive in some regards and then we might have more support across party lines ... if we set our sights on access and affordability,” said Del. Heather R. Mizeur (D-Dist. 20) of Silver Spring.

She and Hammen suggested the General Assembly focus on expanding health care coverage for the uninsured.

‘‘It’s possible the Wal-Mart bill will at some level play into it,” Mizeur said.

A number of legislators are promoting legislation that would expand Medicaid, possibly paid for by doubling the tobacco tax to $2 for a pack of cigarettes.

The advocacy group Progressive Maryland was ready for the legislature to direct its attentions elsewhere.

‘‘If we want to expand health care coverage and reduce overall costs, [Wednesday’s] court ruling makes very difficult a piecemeal approach financed by mandated employer contributions,” said Sean Dobson, the organization’s deputy director. ‘‘Instead, state government should provide affordable insurance to the growing number of Marylanders without coverage and use its muscle to get fair prices from drug companies and health care providers.”

Industry groups hailed the ruling.

‘‘We believe the real aim of this legislation was to establish a precedent that would ultimately subject Maryland small-business owners to a payroll tax and require all Maryland small-business owners to pay for health insurance for full-time and part-time employees,” said Ellen Valentino, state director of the National Federation of Independent Business, in a statement.

The group Working Families for Wal-Mart pinned the bill to a larger union effort to attack the world’s largest retailer.

‘‘On behalf of working families everywhere, we urge the union leaders’ to abandon these failed gimmicks and use their members’ dues to help pass meaningful reforms that expand affordable health coverage to all Americans,” said Catherine Smith, interim chairwoman of the organization.