Essay by: Kendall Victoria Dacey

2016 PEPP. L. REV. 15 (2016)

When the Affordable Care Act (ACA) became law in late March, 2010, Dave & Buster’s (D&B) had a choice: it could either comply and offer its full-time employees the minimum health insurance coverage required by the new “employer mandate” or it could ignore the new requirements and incur a penalty. Dissatisfied with either option, D&B made the drastic decision to circumvent the ACA entirely, and reduced its full-time staff below the ACA’s employee threshold so as to avoid triggering any penalty or having to pay increased health care costs.

However, by dodging the employer mandate, D&B may have come in direct conflict with section 510 of the Employee Retirement Income Security Act of 1974 (ERISA). Section 510 prohibits an employer from purposefully interfering with an employee’s attainment of benefits. Because D&B reduced its full-time staff below the ACA’s employee threshold specifically to avoid paying for employee health insurance, it arguably interfered with its employees’ attainment of benefits.  While the Supreme Court has repeatedly refused to hear constitutional challenges to the employer mandate, this article suggests that it could reach that point in the near future.

 

Download the Full Article