Employee Benefits Advisory: Maryland's Fair Share Health Act Invalidated by Federal Court (And the Possible Consequences for Massachusetts Health Care Reform)
7/28/2006
On January 12, 2006, the Maryland legislature enacted, over the Governor's veto, the Fair Share Health Care Fund Act (the "Maryland fair share law"), which requires businesses with 10,000 or more employees to spend eight percent (six percent in the case of nonprofit organizations) of their payroll on employee health care benefits. If an employer's spending falls short of the mandated amount, the difference must be paid to a state fund set up for the purpose of defraying state health care costs for the uninsured. There is a substantial civil penalty for failure to make the required payments to the State.
For a brief overview of ERISA preemption, the district court's opinion and the effect on Chapter 58 please click here.
