HR departments for large employers all across the country are focused once again on getting out their 1095-Cs.  This process brings to light for many the need to monitor employees’ hours-of-service.  Because of certain Affordable Care Act (ACA) provisions large employers want to make certain employees working 30 or more hours per week are offered the company health plan.  But don’t go too far monitoring or “managing” your employees’ hours-of-service. No employer wants its actions to appear it is illegally interfering with its employees’ rights to receive an ERISA health benefit. Here is why –

Dave and Buster’s has reached a settlement, which has been preliminarily accepted by the Court, to pay $7.425 million plus legal fees in a class action ERISA lawsuit. The suit alleged that Dave and Buster’s cut full-time employee hours in an attempt to illegally interfere with an employee’s right to attain a benefit granted under the ERISA plan, in response to the ACA’s requirement to offer health coverage to employees working 30 or more hours a week.   This class-action suit alleges that the company sufficiently cut the plaintiff’s hours in order to reclassify them as part-time.   This reduction in hours enabled the company to avoid providing health insurance or paying an ACA 4908H (“Play or Pay”) penalty.

Please note that the information contained in this posting is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This post should be reviewed by your legal counsel or tax consultant before use.