Dive Brief:
- One strategy for minimizing exposure to the employer shared responsibility penalties under the Affordable Care Act (ACA) is to minimize the number of “full-time employees”—that is, the number of employers working 30 or more hours per week on average, according to an article at SHRM.org.
- Employers can accomplish this through reducing the number of hours certain current and future employees work so that they will not be considered to be “full time” as defined by the ACA, requiring coverage to be offered to a smaller group or none at all.
- One company’s alleged attempt to do just that, however, is the central claim in a class action lawsuit by an employee alleging the company (Dave & Buster’s Inc.) has interfered with her rights to benefits under the Employee Retirement Income Security Act (ERISA).
Dive Insight:
Put simply, writes Joseph J. Lazzarotti, of Jackson Lewis, the law makes it unlawful for any person to discriminate against a participant or beneficiary for exercising a right granted (or interfering with the attainment of a right) under ERISA or an ERISA employee benefit plan.
If successful, one effect of plaintiff’s argument may be that once an employer hires an employee in an eligible classification under an ERISA plan, that employee has a right under ERISA to be eligible, and any change by the employer in that classification is an impermissible interference with that right, Lazzarotti explained.
Jackson Lewis believes this is the first case in which a court will address this issue and an important case for employers to watch, especially those employers that have taken or are thinking about taking similar steps to address their employer shared responsibility obligations under the ACA.
