In case you haven’t heard, Maryland is forcing large retailers (10,000+ employees in the state) to pay 8% of their total payroll costs in the form of health care insurance. If they pay less than 8%, they have to pay the difference to the state. I’m not sure a worse law could be written, in the sense that it will most likely have the opposite effect than the one intended.
Here are Wal-Mart’s options:
- Take an 8% increase in payroll costs and provide more health insurance for employees – If they go this route, you can expect a cut in pay pretty soon.
- Take an 8% increase in payroll costs, drop all health insurance for employees and pay the 8% to the state – If they go this route, the employees keep their salaries and get health care from the state.
If I’m Wal-Mart, option 2 looks pretty sweet to me. This will cut their costs from 8% to 8% minus whatever percentage of payroll goes to health care currently. However, it will also shift the health care burden to the state and increase the states costs.
I can’t fathom what legislators are thinking by passing this bill. Do they exclusively do things for a good headline? Do they ever think past five minutes from now?