One aspect of the Patient Protection and Affordable Care Act (ACA) (aka “Obamacare”) that has been in the news recently is the provision of the law that requires employers with 50 or more full-time employees (defined as employees who work 30 or more hours per week or 130 hours per month) to provide health insurance to these full-time employees. Many have argued that this mandate will lead employers to reduce the number of hours that employees work and/or reduce the number of employees they employ so that they don’t have to provide employees with health insurance. Law firms that advise employers have warned employers that these attempts to evade the mandates of the ACA could be illegal. See here, here, and here.
The ACA contains a “whistleblower” provision which, among other things, prohibits an employer from taking any adverse action against an employee because he received a subsidy or tax credit to purchase health insurance. This whistleblower provision was included in the ACA because of a concern that employers would fire employees who obtained these tax credits or subsidies since, if the employer was large enough, it could be fined for not providing those employees with health insurance. If you use a government subsidy or tax credit to purchase health insurance and your employer retaliates against you, contact an experienced employment lawyer immediately because the time limits to pursue legal action are short.
Law firms that advise employers have cautioned them that reducing employees’ hours so that they are no longer full-time, and not eligible for health insurance under the ACA, could violate section 510 of the Employee Retirement Income Security Act (ERISA). Section 510, among other things, prohibits an employer from taking adverse action against an employee with the intention of preventing that employee from becoming entitled to an employee benefit. So, while this argument has not been tested in the courts yet, it may very well be illegal for an employer to reduce an employee’s hours to prevent him from becoming entitled to health insurance under the ACA. If your employer has decided to reduce employees’ hours in order to evade the requirements of the ACA, you should also contact an experienced employment lawyer to learn more about your rights.