Round two in the battle over whether states should require large employers such as Wal-Mart to spend a certain amount on employee health benefits could get under way this week with supporters of such measures bolstered by a recent victory in Maryland.
Washington state's House and Senate each will hold hearings Thursday (Jan. 19) on a proposal to require companies and government agencies with more than 5,000 employees to spend at least 9 percent of payroll costs on health insurance — or contribute the difference to the state's Medicaid program.
The Washington bill is even more expansive than a first-of-its-kind law just enacted in Maryland that workers' rights advocates plan to push in 30 other states this year.
On Jan. 12, the Democrat-controlled Maryland General Assembly overrode Republican Gov. Robert Ehrlich's veto of a bill that requires companies with at least 10,000 employees to spend 8 percent of labor costs on employee health benefits.
Of the four Maryland companies with more than 10,000 employees, Wal-Mart, which has close to 17,000 employees in the state, is the only one that does not spend the required amount on health benefits and waged a lobbying blitz to try to defeat the bill.
Business advocacy groups oppose such measures, claiming they would place an undue and punitive burden on large employers and threaten job creation while doing little to benefit uninsured workers. Wal-Mart officials claim the wave of legislation unfairly targets the popular discount store — the world's largest retailer.
"There are more than 786,000 uninsured people in the state of Maryland, and less than one-half of 1 percent works for Wal-Mart," company spokeswoman Sarah Clark said in a statement posted Jan. 13 on the retailer's Web site.
Ehrlich's notoriously acrimonious relationship with the state Legislature fueled the veto-override effort in Maryland, as did efforts of labor unions, which plan to push so-called "Fair Share Health Care" bills that each state would tweak to its needs. Specifically, each state likely will determine its own threshold for large employers and what percentage of labor costs employers should spend on health benefits.
AFL-CIO State Legislative Director Naomi Walker said unions are focusing on Colorado, Connecticut, Florida and Kentucky.
"We're just looking for large employers — large and extremely profitable employers like Wal-Mart — to shoulder some of the burden of ensuring that their employees get their basic needs met, and one of those needs is health care," said Steve Smith, a spokesman for the AFL-CIO.
According to the National Conference of State Legislatures, 13 states considered legislation in 2005 requiring companies to provide health insurance or pay a fee to the state. Only Maryland's bill was enacted, but several proposals will carry over to this year's sessions. The states that considered proposals in 2005 are Arizona, California, Connecticut, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Pennsylvania, Tennessee, Vermont and Washington.
David Groves, communications director for the Washington State Labor Council , said Maryland's precedent-setting law increased prospects his state will take action.
"It will show the legislators here in Washington that they're not the only ones passing this. ... Sometimes states don't want to be the first one to pass something like this," Groves said.
Roughly 30 companies in Washington state employ more than 5,000 people, Groves said. Wal-Mart, with more than 16,000 employees statewide, is among them. According to a 2003 analysis by the Washington State Health Care Authority, Wal-Mart has more employees than any other company receiving benefits from the state's health-care program for low-income working families.
Wal-Mart was in the top five in all but one of 19 states that disclosed last year which companies had the most employees on the state's publicly financed health care rolls, Walker said. Such statistics have placed the retailing giant in the cross-hairs of workers' rights advocates and even have spawned an anti-Wal-Mart Web site.
Wal-Mart officials dispute the claim that they don't provide workers with adequate health benefits. The company's Web site states that three-fourths of employees receive health insurance through a company plan, a spouse's plan or Medicare and that every full and part-time employee is eligible for health insurance, in some cases for as little as $11 a month.
The U.S. Chamber of Commerce, which strongly had urged legislators to sustain Ehrlich's veto of the Maryland bill, plans to assist in mounting opposition campaigns in states with similar legislation this year.
"States should be exploring ways to lower health-care costs and help small business owners gain access to affordable, quality care, rather than wasting time on half measures like this that ignore the reality of the health-care crisis in this country," said Bruce Josten, the chamber's executive vice president for government affairs.
Josten said about 25 million of the nation's 45 million uninsured residents work full-time in small businesses with fewer than 100 employees and would not benefit from bills targeting large employers.
He added that the U.S. Chamber's legal counsel is exploring the legal ramifications of Maryland's law. The organization has questioned whether forcing large employers to pay certain health benefits violates federal law.