AcademyHealth Stateside - 05/11/2005  (Plain Text Version)

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In this issue:
 NEW Profile in Coverage: Maine's Dirigo Program
 “Pay or Play” Law passes in Maryland
 Implications of the New Federal Bankruptcy Law on Health Consumers
 Congress Passes Federal Budget Resolution with $10 Billion in Cuts to Medicaid
 Annual Research Meeting: State Health Research and Policy Interest Group
 Registration Now Open for SCI Summer Meeting
 Coming Soon from SCI
 Reports of Interest

“Pay or Play” Law passes in Maryland

Maryland’s General Assembly recently passed a law (S.B. 790/H.B. 1284) requiring private-sector, for profit employers with 10,000 or more employees in the state to spend at least 8 percent of their payroll (or 6 percent in the case of a nonprofit employer) on health care. Those 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.

S.B. 790/H.B. 1284--coined the “Wal-Mart” bill because Wal-Mart is the only large employer in the state that will be affected by the legislation – has received national attention. While there are other employers in the state with more than 10,000 employees, only Wal-Mart does not meet the percentage threshold. Although Maryland is the only state to pass pay or play legislation in 2005, a few other states including Massachusetts and Washington have passed similar laws in the past; they have not been implemented. California’s attempt to implement a similar mechanism in 2004 was halted after a voter referendum called for its repeal. 

The fate of the new law is unclear on two fronts. First, from an ERISA perspective, it is uncertain whether the Maryland law would pass all the preemption tests. Second, and perhaps most significant at this juncture, Governor Ehrlich (R) has indicated that he will veto the bill later this month.