Free-market advocates cheered long and loud in mid-July when U.S. District Judge J. Frederick Motz struck down Maryland’s Fair Share Health Care Fund Act, popularly known as the “Wal-Mart law.” Motz ruled the measure violated the federal Employee Retirement Income Security Act of 1974 (ERISA).
“ERISA-qualified companies are exempt from the more than 1,800 state coverage mandates in all 50 states, and from destructive state laws such as community rating and guaranteed issue,” noted Grace-Marie Turner, president of the Galen Institute, a free-market think tank in Alexandria, Virginia. “Amazingly, these companies still manage to provide quality health coverage to their employees, without politicians micromanaging the policies.”
ERISA allows companies with multistate locations to offer uniform health insurance plans to their employees without having to follow the dictates of individual state mandates and regulations. The July court ruling on Maryland’s bill applies only to a limited number of very large businesses that would have been affected by the law.
“If small businesses and individuals were [likewise] freed from the shackles of these expensive state mandates and regulations,” Turner said, “they would reshape the market to provide more affordable policies and transform the health sector around people’s needs, not the dictates of politicians. These changes are vital for the well-being of our health sector, and for American businesses operating in a twenty-first century global economy.”
Government, Stay Out
Greg Scandlen, president of Consumers for Health Care Choices–a consumer-advocacy membership organization based in Hagerstown, Maryland–concurred.
“The Wal-Mart law ruling will keep employers in the benefits game,” Scandlen said. “The U.S. Supreme Court has already issued dozens of decisions making it crystal clear that a state or local government may not tell an employer how to run a benefits plan, including how much of its payroll it should spend on those benefits.
“If employers have to navigate complex and costly state and local regulations, they may opt to provide no benefits at all,” Scandlen said. “The proportion of Americans who receive job-based coverage has been shrinking over the past decade, and the demand that individual insurance coverage should receive the same tax benefits as employer-based coverage is growing.”
Charlotte LoBuono ([email protected]) is a freelance journalist and writer in Hoboken, New Jersey.