Maryland Approves Bill Forcing Wal-Mart to Boost Health Plan

January 13, 2006

Maryland became the first state to pass legislation requiring Wal-Mart Stores, Inc. to spend a minimum amount on health care for its employees or pay the difference in taxes as the Democrat-controlled legislature overrode a previous veto by Republican Gov. Robert Ehrlich.

The health care bill is written so that only Wal-Mart would be affected.
The measure, titled the Fair Share Health Care bill, would require companies with more than 10,000 employees to spend at least 8 percent of their payroll on health benefits, or pay the balance into a state low-income health insurance fund. The bill takes effect in 30 days.

At least 30 states are considering similar health care measures, though Maryland is the first to pass one.

The bill has been the subject of intense lobbying in Annapolis and of TV and radio ads across the state. The final vote came down largely along party lines. The House of Delegates voted 88-50 in favor of the bill after the Senate voted its approval 30-17. Both margins were large enough to override Ehrlich’s veto of last May.

Wal-Mart Stores, Inc. officials criticized the lawmakers’ action.

“We believe that everyone should have access to affordable health insurance. This legislation does nothing to accomplish that goal,” the company said in a statement. “There are 786,000 uninsured people in the state of Maryland and less than one-half of one percent work for Wal-Mart. Clearly, the legislators who voted for this bill have let down hundreds of thousands of Marylanders in need.”

The company, which has come under scrutiny by unions and health care advocates for the number of its employees without health insurance, maintains that more than three-fourths of Wal-Mart associates have health insurance, either through a company plan, a spouse’s plan or Medicare. It also says it offers a plan under which even part-time workers can be covered.

“This vote was never about health care. This was about partisan politics in the Maryland gubernatorial race. In allowing a bad bill to become a bad law, the General Assembly took a giant step backward and placed the special interests of Washington, D.C. union leaders ahead of the well being of the people they serve. And that’s wrong,” said Sarah Clark, Wal-Mart spokesperson.

“The American people know that catering to the special interests does nothing to help the 46 million uninsured individuals in this country. Now is the time for legislators across the country to work together to find real solutions to the health care challenges facing every state, every business and every working family. It’s time for Washington, D.C. union leaders to stop their attacks, and let working families decide where to shop and work,” she added.

Wal-Mart Stores, Inc. operates Wal-Mart Stores, Supercenters, Neighborhood Markets and SAM’S Clubs in the U.S.

Unions, on the other hand, applauded the vote.

“We are pleased to see that Maryland legislators stepped up and made a statement about what kind of businesses they want in their state,” said Anna Burger, secretary-treasurer of the Service Employees International Union (SEIU). “Marylanders deserve businesses that provide for their employees, pay a decent wage and provide affordable health care, not those that expect taxpayers to foot the bill for their bottom-line corporate profits. They get that with Fair Share Health Care.”

Andrew Grossman, who runs a group known as Wal-Mart Watch that monitors the company, maintained that the bill would make the Maryland business climate friendlier for smaller firms.

“Wal-Mart Watch is proud to stand with Maryland legislators and taxpayers in support of this historic legislation that will level the playing field for Maryland’s small and family-owned businesses. Wal-Mart has been burdening taxpayers with its workers’ health care costs for far too long, and this bill will help stop that practice.

“It’s unacceptable that a company with annual profits of $10 billion has a health care plan that covers less than half of its employees. We urge Wal-Mart to improve its benefits on its own, but we support legislative remedies until Wal-Mart embraces change for itself.

Retailers blasted the new law, charging that it would cost the state jobs. The Retail Industry Leaders Association said the measure punishes the retail industry without doing anything to control health care costs.

“This legislation makes no attempt to control skyrocketing healthcare costs, and it creates a hostile environment for Maryland retailers leading to fewer jobs, reduced tax revenues and a weakened economy,” said RILA President Sandy Kennedy. “It sets a bad precedent for other state legislatures that want to shift the burden of healthcare costs onto retailers. Instead of mandating retailers pay a fixed amount for healthcare, lawmakers should address the real problem of healthcare costs and work to enact cost-reducing legislation.

“This legislation penalizes the one sector of the Maryland economy — the retail industry — that does the most to help Maryland consumers stretch their dollars by providing high quality products and services at affordable prices. It is a clear disincentive to retailers seeking to do business, or to expand their business in the state and could leave many Marylanders jobless,” Kennedy added.

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