On January 12, 2006, Maryland became the first state to require an employer to spend more on health care for its employees. The Maryland General Assembly over-rode Governor Ehrlich’s veto of a bill (S.B. 790/H.B. 1284), passed in during the 2005 legislative session, requiring private-sector for-profit employers with 10,000 or more employees in the state to spend at least eight percent of their payroll (or six percent in the case of a nonprofit employer) on health care. Those employers that fall below the requirement would be required to pay the difference between their health insurance expenses and the percentage threshold into a new Fair Share Health Care Fund, which will direct the funds into the state’s Medicaid program.
While there are other employers in the state with more than 10,000 employees, only Wal-Mart does not meet the percentage threshold; therefore the Act has become known as the “Wal-Mart” bill. Legislation similar to the Maryland bill is being considered by a number of states that had been watching for the resolution of this controversial initiative.
