ACA Suit Challenging Reduction in Hours Allowed to Proceed

Many employers are still working to catch up to and understand the new requirements of the Affordable Care Act (ACA) – including the IRS, which has announced automatic extensions to certain reporting requirements for this year. In the first case of its kind, a federal court in New York City has recently given employers some potential instruction on how it view the inevitable interplay between the Employee Retirement Income Security Act (ERISA) and the ACA. It also suggests that lawsuits alleging employers have reduced employee hours to avoid the requirements of the ACA will be permitted to proceed to consideration of the underlying facts.

In the recent decision, the court rejected the employer's request to dismiss a proposed class action alleging that the company intentionally reduced its workforce hours to prevent employees from being eligible for health benefits. Brought by an employee who had worked at the company as a full-time employee until 2013, the