Dueling lawyers, radio ad help set tone

Challenging the legality of the Fair Share Health Care Fund Act, the Maryland Chamber of Commerce yesterday launched a last-ditch effort to convince legislators not to override a veto of the bill.

Meanwhile, the Maryland Citizens’ Health Initiative said it will spend at least $12,000 on a radio ad supporting an override.

Exactly one week remains before the General Assembly will vote on whether to sustain the Gov. Robert L. Ehrlich Jr.'s veto of the bill, which would require employers with 10,000 workers or more to spend 8 percent of their payroll on health insurance, or pay the difference to a state fund supporting Medicaid. The legislation has been called the Wal-Mart Bill because the retailing giant is the only entity it would affect.

Both groups hope they can sway lawmakers in the final days.

In an opinion letter to the Chamber of Commerce dated Dec. 1, 2005, Henry A. Smith III, a partner with Baltimore-based human resources law firm Smith and Downey, wrote that the federal Employee Retirement Income Security Act of 1974 pre-empts the fair share bill, and that the fair share measure violates the federal act.

The federal statute supersedes state laws that impact employee benefit plans, according to Smith, with the intention of preventing a national employer from being subjected to different benefit laws in each state.

“It was designed to make sure that national employers did not just surrender benefits plans,” Smith said in a telephone interview. He said he came to his opinion that the bill would be struck down in court, and that he frequently sees legislation drafted that would not hold up under the federal act.

The Chamber of Commerce will decide whether to challenge the legislation after next week’s override vote, according to vice president of government affairs Ronald W. Wineholt.

“We expected a close vote on the governor’s veto, and with this new information, it’s a whole new ballgame,” Wineholt said. “The fact that this bill likely violates federal law is a compelling reason to sustain this veto.”

If the override takes place, the chamber will consult with members and other business groups to decide how to proceed.

Proponents of the bill, however, believe the legislation stands up to federal law.

“We don’t think this will change legislators’ minds, because they will see very soon that the arguments are fallacious,” said Vincent DeMarco, president of the Maryland Citizens Health Initiative, which championed the bill last year.

DeMarco asked attorney Phyllis C. Borzi, a professor at the George Washington University School of Public Health and Health Services, to draft a letter refuting Smith’s claims. Borzi said yesterday she hopes to have the letter written by the end of the week.

Since 1995 the Supreme Court has adopted a more narrow interpretation of the pre-emption clause in the federal act, striking down state laws less frequently than before, said Borzi, who until 1995 served as employee benefit counsel for the U.S. House Committee on Education and Labor. She said ERISA would not pre-empt the fair share bill.

“It’s just a tax, just like states can tax employers for anything,” she said, noting the assessment imposed by the legislation would be on employers, not on the benefits plan.

House Speaker Michael E. Busch, D-Anne Arundel, has asked Attorney General J. Joseph Curran Jr. to review the legislation, and a statement from Curran’s office released yesterday said a response should be ready before the legislative session begins on Jan. 11.

Meanwhile, listeners of WBAL-AM, WWIN-AM and WOLB-AM might hear a 60-second radio ad in the next week asking listeners to call their state legislators and encourage them to support the override.

DeMarco said his organization will spend more than $12,000 on the spots, which begin airing today and run through the session’s opening day.

“It’ll be running during rush hour. People will hear it,” DeMarco said. Expressing cautious optimism that the Legislature will override the veto, DeMarco said the ad will “help solidify that vote.”

The ad will feature Lisa Jackson, president of the Baltimore Minority Contractors Group, and Mark Derbyshire, vice president of Park Moving and Storage in Aberdeen, explaining that taxpayers or small businesses pick up the tab when workers who don’t have health insurance visit the hospital.

“From my perspective, I’m a company that pays for health insurance, very good health insurance, and it keeps on increasing,” Derbyshire said in a recent interview. “It’s getting to the point where it’s going to be very difficult to provide good health care. That’s my interest in this bill.”

But Wineholt argued the ad would have little impact on lawmakers’ votes.

“This is an issue that’s been pretty widely discussed, and members are familiar with the arguments pro and con. A radio ad of that nature is really not providing any new information that people don’t already have,” he said.

“In contrast, we think this legal opinion does provide new information and provides a good reason for members to reconsider.”

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