SHRM Applauds U.S. Court of Appeals Decision

For Immediate Release

Jan 18, 2007
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Maryland Fair Share Health Care Fund Act is Preempted by ERISA

(Alexandria, Va., January 18, 2007)— On January 17, 2007, the U.S. Court of Appeals for the Fourth Circuit affirmed the lower court’s decision that the Maryland Fair Share Health Care Fund Act is preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The Fourth Circuit concluded that the Act would require employers to restructure their health insurance plans, and thus, conflict with ERISA’s goal to permit the nationally uniform administration of employee benefit plans.

The law, which was due to become effective at the beginning of this year, required private companies located in Maryland and with more than 10,000 to spend at least 8 percent of total wages paid to employees for health insurance costs. If employers did not comply with the Act, they would be required to pay the Maryland Secretary of Labor, Licensing and Regulation the difference between the employer’s actual health insurance costs and the required 8 percent.

“This decision is welcomed news for both employers and employees,” said Susan Meisinger, president and chief executive officer for SHRM. “SHRM has strongly supported ERISA and its employer-sponsored health care plans being governed exclusively by federal law instead of 50 separate states.”

In March 2006, SHRM filed an amicus brief in the Retail Industry Leaders Association (RILA) case in the U.S. District Court of Maryland. The court ruled in favor of SHRM’s argument that the Maryland Fair Share Health Care Fund Act is preempted by ERISA. The State of Maryland appealed and SHRM filed another amicus brief, once again challenging the Maryland Act.

For more information or to view a copy of the amicus brief challenging Maryland’s Fair Share Health Care Fund Act submitted by SHRM, the HR Policy Association, and the American Benefits Council, visit SHRM Government Affairs Online at .

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