The AFL-CIO has recently undertaken a plan to pass legislation at the state level that would require employers to spend pre-set percentages of their payrolls on health care benefits or, barring that, to help fund state Medicaid costs. The union plans to introduce the Fair Share Health Care Fund Act in a total of 32 states and has already done so in Kansas, Kentucky, Michigan, Minnesota, Mississippi, New Hampshire, Ohio and West Virginia.

The legislation applies only to companies employing a given number of employees in a state and requires that those companies not meeting the required level of payroll spending on health insurance pay the difference into a state fund.

Maryland became the first state to pass the legislation when the Maryland legislature overrode Maryland Governor Robert Ehrlich’s veto of the bill to pass it into law. Maryland’s law applies to those organization employing 10,000 or more employees, which in that state means that the law applies only to Wal-Mart. Maryland will require Wal-Mart to spend a total of 8% of its payroll on health care benefits.

Because the bills will be state-specific, it is likely that variations will develop. For example, several other states have already adopted Maryland’s 10,000 employee limit, while Ohio will set the limit at 30,000.

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