Thursday, July 19

Wal Mart 2, States 0: Suffolk County, NY Fair Share Act Shot Down.

How will all the destitute residents of East Hampton afford their hospital stays?!

Ok, that's a cheap shot, we know. There's plenty of places in Suffolk besides the Hamptons. Still, seems an odd place for championing healthcare reform to us, but what do we know?

Anyway, remember the Maryland Fair Share Act? Sure you do. It was the "pay or play" healthcare law that would've required Wal Mart and other enormous retailers (so, just Wal Mart) to pay a specified amount of their employee's health benefits or pay into a State-run subsidy program. Remember how it was crushed, like a bug on the ERISA-preemption windshield, by the 4th Circuit?

Well, the bug-juice seems to be leaking onto New York. It's first Fair Share attempt just got shot down, apparently using the same arguments the Retail Industy Leaders of America used to win in Maryland earlier this year.

Roy Harmon explains what happened over at

The big deal now, according to Paul Secunda at Workplace Prof Blog, is what happens to the Massachusets universal healthcare plan. According to Secunda:

I am now more interested to see if the Massachusetts universal health care plan suffers the same fate. The best thing going for that law is that apparently RILA doesn't believe it causes the same harm to its members as the Maryland and Suffolk County law and has not yet challenged it on ERISA preemtion grounds.

If the only difference between the Fair Share Acts and the Massachusetts UHC plan is that RILA hasn't bit yet, then we're in for a serious fight. RILA's press release doesn't make it sound like they're too afraid to go again. The Fair Share provisions are definitely a big piece of the Massachusetts puzzle. And with other states like California possibly signing onto the Massachusetts mantra, this could get real interesting real fast.

Harmon agrees, focusing on what these decisions mean for any law trying to tax an employer for healthcare coverage under the RILA rulings' interpretation of ERISA preemption:

The idea appears to be that, so long as the tax is not imposed on ERISA plans and does not explicitly suggest a connection with such plans, some form of “pay or play” regime may be imposed on employers as a part of healthcare financing. After Retail Industry Leaders Association v. Fielder, — F.3d —-, 2007 WL 102157, C.A.4 (Md.) January 17, 2007), however, these proposals deserve careful reconsideration.

While [previous decisions] give good reason to believe that lawmakers may impose surcharges on patients or providers, the Fourth Circuit opinion in the RILA decision ... poses a substantial risk to any notion that States may look to employers to supply healthcare financing for State healthcare programs. To the extent [the Court] abandons “literal textualism” and looks to the Congressional purpose of ERISA’s enactment, little can be gleaned that would suggest that ERISA will peacefully co-exist with a multiplicity of State-based employer tax regimes dedicated to the funding of multiple State healthcare programs.
- Another Fair Share Law Bites ERISA Preemption Dust
- NY Opinion - via RILA website