South-Western Legal Studies in Business

State Health Care Requirement May Not Conflict with Federal Law
Description Appeals court struck down a Maryland law designed to force Wal-Mart to increase spending on employee health care. The law conflicted with federal law that encourages employers to have consistent benefit programs nationwide, not subject to state peculiarities.
Topic Employment Law
Key Words ERISA; Preemption; Wal-Mart Law
C A S E   S U M M A R Y
Facts The state of Maryland enacted the Fair Share Health Care Fund Act, which required employers with 10,000 or more Maryland employees to spend at least eight percent of their total payroll on health care for employees. Anything less than that would have to be paid to the state. The law was directly aimed at Wal-Mart, as it was the only company affected by the statute. The validity of the statute was attacked by a retail trade association. The district court struck down the statute as preempted by the federal Employee Retirement Income Security Act (ERISA). The state appealed.

Affirmed. This state ordered benefits mandate is reviewable by federal courts. The state act was preempted by ERISA as it required employers in Maryland covered by the state act to restructure their employee health insurance plans in conflict with ERISA’s goal of permitting uniform nationwide employer administration of such plans. A Maryland employer would have to restructure the plan just to satisfy Maryland requirements.

Citation Retail Industry Leaders Assn. v. Fielder, 475 F.3d 180 (4th Cir., 2007)

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