The Ninth Circuit Court of Appeals, already notorious for having the highest reversal rate by the U.S. Supreme Court, is poised for another test after ruling last week that San Francisco's play-or-pay mandate for employers is legal.

San Francisco passed a law in 2006 that requires most employers to provide health insurance to their workers or pay into a government fund. The Ninth Circuit ruled on Tuesday that the law does not violate the Employee Retirement Income Security Act (ERISA), a 1974 law that pre-empts state laws governing private employer-based health plans.

"This decision opens the floodgates to every state and locality seeking to develop its own version of health reform, creating an impossible environment for major employers -- and the millions of American workers who value their employer-sponsored health plans," American Benefits Council president James. A. Klein said in a statement.

Maryland passed legislation in 2006 that became known as the Wal-Mart bill that would have required all employers with more than 10,000 workers in the state to pay at least 8% of their payroll for health insurance. The Fourth Circuit said the law was invalid because it violated ERISA.
Clearly, the Supremes will need to resolve this. And they might take a look at Massachusetts' play-or-pay mandate while they are at it.