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- Title
Exploring a New Frontier of Employee Benefits Litigation: Using ERISA to Challenge Hours Cuts in Avoidance of the ACA's Employer Mandate.
- Authors
Ages, Galen Arkush
- Abstract
Under the employer mandate of the Patient Protection and Affordable Care Act ("ACA"), applicable large employers who fail to provide affordable, minimum-level health coverage to their full-time employees must pay a substantial tax. This creates an incentive for certain employers to engage in workforce management techniques, including reducing the hours of full-time employees, to avoid the cost of providing minimum-level health coverage or paying the tax. Certain employees at the receiving end of such methods--particularly hours cuts--may be able to raise viable challenges under section 510 of the Employee Retirement Income Security Act, but such plaintiffs will also face a variety of challenges. This Article discusses the employer mandate, the use of workforce management techniques by certain employers to avoid compliance, doctrinal issues relating to section 510 claims, and the first section 510 lawsuit challenging ACA workforce restructuring (which has overcome a motion to dismiss). In light of this discussion, the Article reaches several conclusions regarding the viability of using section 510 to challenge ACA-motivated workforce restructuring, especially reductions of employee hours. Most viable plaintiffs, prior to the adverse action, will have worked full-time for an employer with an existing plan. Plaintiffs' biggest hurdle will be proving specific intent to interfere with benefit rights. Plaintiffs who cannot do so with direct evidence may struggle to do so with circumstantial evidence--as this will require demonstrating that the employer's claim to have cut hours in an effort to lower overall labor costs was pretextual. However, if plaintiffs do prevail, they can avail themselves of several meaningful remedies, including injunctive relief equitable restitution, and possibly surcharge. While President-Elect Donald Trump and the G.O.P. plan to "repeal and replace" the ACA, the process of rolling back this complex and politically explosive law may take years, such that the legal issues raised in the Article are unlikely to disappear overnight.
- Subjects
UNITED States; EMPLOYEE benefit laws; PATIENT Protection &; Affordable Care Act Supreme Court cases (U.S.); LABOR supply; RETIREMENT; LABOR costs
- Publication
Berkeley Journal of Employment & Labor Law, 2017, Vol 38, Issue 1, p137
- ISSN
1067-7666
- Publication type
Article
- DOI
10.15779/Z38G44HQ1D