Box Store Healthcare

Maryland passed a law requiring that stores with a specific number of emplolyees and making a specific amount of sales was required to provide healthcare to its employees. The law was pointed at the box stores that pay subprime wages and cuts costs by not offering healthcare to its employees. The law was relatively recently struck down by a Federal District Court and Maryland has taken an appeal. The Federal District Court determined that a federal law, ERISA, preempted the state law and, therefore, the state law could not contradict or alter the ERISA requirements. While the Court may be correct on the legal analysis and it may be upheld on appeal, the issue has been squarely confronted by the states and calls to arms will likely rise to the Federal level requiring that Congress act.

A Berkeley Study concluded that tax payers are subsidizing Wal-Mart. The Wal-Mart employees do not receive health insurance and when they get sick they end up at the emergency room. (for more infomation on Wal-Mart Healthcare) Joe Taxpayer ends up flipping the bill. Thus, the cost for low prices is higher taxes to pay for the corporate subsidies Wal-Mart receives. Maryland's law sought to end these subsidies.

A number of other states were considering similar laws and they likely will not pass these laws until resolution is brought to the Maryland case. At that time, they may try to tailor new laws to the court ruling or they may start to put pressure on the Congress to amend ERISA to allow for the state mandates or they may call upon Congress to pass a similar law to Maryland's. Of course the latter is better than the former since it would impose a universal solution opposed to the piecemeal solution that would result from state by state laws. Further, Wal-Mart and other companies would be knowledgeable of all of its obligations under a universal federal law opposed to having to interpret each state law and trying to find the loopholes available in the various state laws, which will inevitably be found and exploited (better to pay the lawyers than the workers apparently.)

With a Democratic Congress Wal-Mart should be concerned that this type of legislation will start to get traction. While the Democrats are not enemies of business as they were once perceived to be a popular policy change such as this is the very type of issue they campaigned on to get elected and the new Congress should take this issue up as one of its first pieces of legislation. In the meantime, Maryland is right to continue the legal battle and attempt to salvage its healthcare law.