"Pay or Play" Loses Again in Federal Court

“Pay or play” health care mandates are having a rough time in court. Consider the following item from  Business Insurance:

CENTRAL ISLIP, N.Y. — A federal court has invalidated the two-year-old Suffolk County, N.Y., pay-or-play health care mandate requiring certain retailers to provide a prescribed level of health insurance to their nonmanagement workers.

The Suffolk County law is pre-empted by the federal Employee Retirement Income Security Act, which bars states from legislating the content of employee benefit plans, ruled Judge Arthur Spatt of the U.S. District Court in Central Islip, N.Y., on Monday.

The ruling comes in a lawsuit filed in February 2006 by the Arlington, Va.-based Retail Industry Leaders Assn., which also successfully challenged a similar law enacted last year in Maryland.

Suffolk County’s law required large retail stores that sold groceries pay health care expenses - at a “public health cost rate” to be determined by the county - for the majority of non-managerial, full-time, part-time and seasonal employees.

Over the last few years I’ve witnessed numerous attempts to bring “pay or play” in some form to Washington. I remember one bill that would have applied to all businesses with over 10 employees. Another – obviously targeting Wal-Mart – took at aim at large employers with hints that it would ultimately expand to smaller firms.

I’m always encouraged when a court strikes down a patently wrong-headed law like Suffolk County’s. Government health care mandates, like “pay or play,” are, after all, counter-productive to building a market-oriented system that would actually provide low-cost insurance for small businesses.

Unfortunately, you can bet the store that “pay or play” will be back in some form when the Legislature re-convenes in January. The proponents of these kinds of laws are a determined bunch. Court rulings, no matter how well-reasoned, are not going to stop them from pushing their agenda.