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Judge overturns Wal-Mart law

Julie Appleby

A federal judge Wednesday overturned a Maryland law aimed at Wal-Mart (WMT) that would have required the nation's largest retailer to spend more on health care for its workers.
The ruling by U.S. District Judge Frederick Motz will be appealed, says a spokesman for the Maryland attorney general.

Motz ruled the Maryland law was pre-empted by a federal pension law, which limits states' ability to regulate benefits offered by large, multistate employers.

The Maryland law, approved over a veto by the state's governor, required employers with more than 10,000 workers to spend at least 8% of payroll on health benefits, or pay into a fund for the uninsured. Wal-Mart was the only employer affected.

Lawmakers approved the bill after hearing from supporters that many of the state's Medicaid enrollees had jobs at Wal-Mart but could not qualify or afford to sign up for its health benefits. Maryland, like other states, is seeking ways to slow the growth of its $4.6 billion Medicaid program, which provides health care to the poor and to many nursing-home residents.

Wednesday's ruling pleased the retailer but angered supporters of the law, many of whom are trying to get similar bills passed in other states.

"We are very pleased. That law did nothing to control the cost of health care," says Sarah Clark, a spokeswoman with Wal-Mart, adding that Wal-Mart is offering new health care solutions such as insurance for children of part-time employees and a reduced waiting period for those eligible for health care coverage.

But Wal-Mart Watch, a union-backed group that supported the law, says many of the company's workers still cannot afford its coverage. "This setback does not change the fact that Wal-Mart's health care plan is unaffordable and inaccessible for its employees," says Nu Wexler, spokesman for Wal-Mart Watch.

Both sides said something needs to be done to control rising health care costs.

"This is a national issue. The solution isn't going to be on the back of one industry," says Sandy Kennedy, president of the Retail Industry Leaders Association. "This decision is a significant victory for all businesses that offer health care to their employees."

But Paul Blank, campaign director at WakeUpWalMart, another union-backed group, says, "The fight to provide better health care and to reduce Wal-Mart's tax burden on American taxpayers will continue."

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