Source: https://www.payprocorp.com/2014/07/16/the-affordable-care-act-countdown-to-compliance-for-employers-erisa-section-510-and-limiting-employee-hours/
Timestamp: 2018-05-26 19:40:54
Document Index: 204660153

Matched Legal Cases: ['§ 510', '§ 510', '§ 510', '§ 4980', '§ 510', '§ 510', '§ 510', '§ 510', '§ 4980', '§ 4980']

The Affordable Care Act—Countdown to Compliance for Employers: ERISA Section 510 and Limiting Employee Hours - Paypro Corporation
The Affordable Care Act—Countdown to Compliance for Employers: ERISA Section 510 and Limiting Employee Hours
Home/Health Care Reform, Human Resources, Latest Industry News, New @ Paypro/The Affordable Care Act—Countdown to Compliance for Employers: ERISA Section 510 and Limiting Employee Hours
It is asserted that the strategy of capping the annual hours of new “variable hour employees” as a way to limit exposure under the Affordable Care Act’s employer shared responsibility rules do not work in the case of new employees during the initial measurement period. The following examines its application to “ongoing employees.”
Nowhere has this rule been discussed more publicly than in connection with efforts on the part of employers to cap hours of (almost exclusively rank-and-file) employees at or under 30 hours per week so as to avoid having to make any offer of minimum essential coverage. Discussions of these and other avoidance strategies inevitably invoke the specter of § 510 of the Employee Retirement Income Security Act (ERISA).
ERISA § 510 makes it unlawful for any person to discriminate against a plan participant or beneficiary for exercising rights provided by an employee benefit plan. This provision has generally, though not exclusively, been invoked in cases involving pension benefits. Some commentators have predicted a flood of cases under ERISA § 510 aimed at employers that seek to cap hours in order to avoid Code § 4980H exposure, but these claims often overlook that ERISA § 510 confers rights only on plan participants and not on employees generally. And nothing in ERISA or any other Federal law requires employers to offer group health plan coverage.
Although it is not yet known how the courts will interpret ERISA § 510 in the context of the Affordable Care Act’s employer shared responsibility rules, there are educated guesses being made. For example, an employee hired into a position for which benefits are not offered (and assuming no other “bad facts” as may have been adduced in Sanders) should not be able to demand benefits by invoking ERISA § 510. Rights under ERISA § 510 may arise, however, in the case of full-time employees who are currently covered under an employer’s group health plan and who subsequently lose coverage when their hours are reduced. These latter cases will inevitably be fact intensive, and the burden of proof will shift back-and-forth. For example, an employer may assert that the transfer to part-time had nothing to do with group health coverage but was instead motivated by other legitimate business concerns. The burden would then shift to the employee who might cite the employer’s public statements that it is limiting or reducing employee hours for purposes of avoiding “pay-or-play” penalties. Whatever the particulars, it should surprise no one if at least some of these plaintiffs prevail.
This brings up question of the treatment of “ongoing employees” as defined in the Affordable Care Act. Recall that the final Code § 4980H regulations provide two ways to determine an employee’s status as “full-time”: the “monthly measurement method” and the “look-back measurement method.” Under the latter method, an employer is not required to make an offer of coverage during an initial measurement period to newly hired “variable hour employees,” “seasonal employees,” and “part-time employees.” It is asserted that an employee whose annual hours are capped at 1560 will not qualify as variable hour. He or she is, instead, likely to be a full-time employee to whom coverage would need to be offered following three full months of employment to avoid penalties under § 4980H and within 90 days to comply with the maximum waiting period allowed under the Public Health Service Act. But once this employee has been employed for a full standard measurement period, he or she will be an ongoing employee, and, as such, an employer is free to impose a cap on hours during the standard measurement period.
Annemieke Scott	2014-07-16T09:30:59+00:00	July 16th, 2014|Health Care Reform, Human Resources, Latest Industry News, New @ Paypro|