White Paper

Hours Reductions to Circumvent the ACA Mandate May Be Unlawful Interference Under ERISA

 
By now, employers are well aware of the Affordable Care Act's (ACA) "employer-mandate," which requires companies with at least 50 full-time employees, including full-time equivalents, to offer qualifying health insurance to all employees who work at least 30 hours or more per week. What employers may not know, however, is that reducing an employee's hours to circumvent the employer mandate may be seen as unlawful interference with their eligibility for benefits under the company's health plan in violation of Section 510 of the Employee Retirement Income Security Act of 1974 (ERISA).

An ongoing case in New York federal court illustrates the judiciary's receptiveness to claims on these grounds. The plaintiff in Marin v. Dave & Buster's, Inc., S.D.N.Y., No. 1:15-cv-03608, worked full-time (30 to 45 hours per week) for Dave & Buster's ("D&B"), and received health insurance under D&B's health insurance plan from 2006 to 2013. According to the plaintiff, D&B reduced her hours after June 1, 2013 to approximately 10 to 25 hours per week. In March of 2014, D&B sent plaintiff a letter advising that due to her reduction in hours she now had part-time status, and as a result of that change in status, her health insurance coverage would terminate at the end of that month.

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Faculty

Robert J. Simandl

Robert J. Simandl

von Briesen & Roper, s.c.