In a case of first impression, a federal court in Maryland struck down Maryland’s pay-or-play health care statute. On July 19, Judge J. Frederick Motz held Maryland’s Fair Share Health Care Fund Act is pre-empted by the Employee Retirement Income Security Act of 1974. Retail Industry Leaders Ass’n v. Fielder, 435 F. Supp. 2d 481 (D. Md. 2006).
Maryland’s act applied to nongovernmental employers of more than 10,000 persons. It required a for-profit employer that did not spend up to 8 percent of the total wages paid to employees in Maryland on health insurance costs, to pay the Maryland Secretary of Labor, Licensing, and Regulation an amount equal to the difference between what the employer spent for health insurance costs and an amount equal to 8 percent of the total wages paid to employees in Maryland. For nonprofit employers, the benchmark was 6 percent. Any amount paid to the labor secretary would be used to supplement Maryland’s Medicaid budget.
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