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St. Thomas Law Review

First Page

105

Document Type

Article

Abstract

In January 2006, Maryland passed a bill mandating employer contribution to employee health insurance in very large corporations, in effect, targeting one large retailer: Wal-Mart.' Around the same time, the American Federation of Labor-Congress of Industrial Unions ("AFL-CIO") and other worker advocacy groups launched a major health care campaign in approximately thirty other states, demanding that the nation's largest corporations contribute to employee health care provision. The Fair Share Health Care Act ("FSHA" or the "Act") was enacted by the Maryland state legislature in an effort to leverage private resources necessary to maintain government-funded health insurance.' The Act requires corporations with 10,000 or more employees to spend at least 8% of their payroll on health care for their employees or pay the difference of what they do provide into a state fund to defray the costs of uncompensated medical care to the taxpayers of Maryland. This article describes and evaluates the Fair Share campaign in light of the current health care crisis. The past few decades have witnessed a significant increase in both the number of uninsured employees and the number of state citizens enrolled in state-funded health insurance and subsequent strains on the state budget. Proponents of the bill argue that corporations should pay their fair share of the current economic burden resulting from uninsured employees. Critics of the bill claim such legislation will impede competition, discourage job creation, and decrease employee wages. One of the key limitations of the bill is its narrow focus on very large corporations, in effect, targeting one single workplace in Maryland: Wal-Mart. Maryland targeted Wal-Mart in order to increase the share of the corporation in the burden of state health care expenditures. However, it leaves intact the basic structure, including the weaknesses, of employment-based health care. Section II introduces the political and legislative efforts that have led to the enactment of the Fair Share Act. The section describes a number of the factors contributing to the current health care crisis and the pressing needs for a comprehensive health care reform. Section III explains the particular focus on Wal-Mart as a controversial employer that has been the target of reform campaigns aimed to raise its employment standards. Section IV describes subsequent developments of Fair Share bills proposed in twenty-five other states, which contain different threshold requirements and may affect smaller, less profitable businesses. Section V describes the recent court challenges to FSHA by the Retail Industry Leaders Association ("RILA"), in particular the preemption claim with respect to Employee Retirement Income Security Act ("ERISA"). The Maryland Fair Share Health Act was recently struck down by a district court judge on the basis of ERISA preemption8 and was upheld by a United States Fourth Circuit Court of Appeals. The discussion below assesses the question of ERISA preemption as well as the adequacy of a strategy of a state-by-state campaign which focuses on a narrow reform initiative in light of the broader national challenges of health care. To conclude, legislation initiatives such as FSHA that target few employers and do not improve the basic limits of employer-based health care are too narrow in addressing the nationally pressing problem. This article expresses the view, however, that the national fair share campaign is an important manifestation of popular discontent with the contemporary system and the need for a government directed response to dramatic declining health care coverage. In addition, this article argues that the litigation surrounding the FSHA highlights the problematic broad reach of ERISA preemption, prohibiting state experimentation while offering little national guidance to a pressing social problem.

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