Of State Laboratories and Legislative Alloys: How 'Fair Share' Laws Can be Written to Avoid ERISA Preemption and Influence Private Sector Health Care Reform in America

72 Pages Posted: 12 Sep 2007

Abstract

This Note examines Maryland's preempted statute and the United States District Court case that granted its opponents declaratory relief. After reviewing the Fair Share Act, the federal ERISA statute, and the significant changes in Supreme Court jurisprudence towards ERISA preemption in the past decade, this Note will offer new approaches through which states can modify the analytical framework outlined by the Fair Share Act to achieve improvements in the state-financing of Medicaid through large private employers. The goal of this Note is to analyze ways to fit future fair share legislation within the non-preempted confines of ERISA.

The proposed modifications include: (1) rewriting fair share laws as unequivocal, non-regulatory Medicaid taxes from which compliant employers may become exempt; (2) dulling the sharp edge of the FSA's punitive texture through decreasing the 100% shortfall tax to 35-50%; (3) expanding the options that employers have as outlets for meeting the 8% health expenditure benchmark, such as through an increase in non-medical fringe benefits, thus giving the statute a less coercive feel; (4) a total package benefits approach analogous to unpreempted ERISA prevailing wage cases; and (5) a state-initiated higher minimum wage for very large employers, with an incentivized exemption provision stating that an employer can revert back to the state or federal government's general minimum wage if the employer spends a certain percentage of payroll wages on employee health insurance.

Keywords: Fair Share Act, Wal-Mart Act, fair share legislation, Fielder, Medicaid, health care reform

Suggested Citation

Abernethy, Darren, Of State Laboratories and Legislative Alloys: How 'Fair Share' Laws Can be Written to Avoid ERISA Preemption and Influence Private Sector Health Care Reform in America. William & Mary Law Review, Vol. 49, No. 5, 2008. Available at SSRN: https://ssrn.com/abstract=1012060

Darren Abernethy (Contact Author)

College of William and Mary ( email )

P.O. Box 8795
Williamsburg, VA 23187-8795
United States

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