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Will Dave & Buster's ACA Employer-Mandate Plan Design Land It in Hot Water with ERISA?

By Jennifer S. Kiesewetter
May 01, 2016

Under the Affordable Care Act (ACA), employers with 50 or more full-time, or full-time equivalent, employees on business days during the previous calendar year are required to offer qualified health care coverage, which meets minimum value and affordability standards to their full-time employees. These employers are referred to as applicable large employers (ALEs). If these ALEs fail to comply with these ACA requirements, often referred to as the “employer mandate,” then the employer may be faced with significant penalties. As such, employee counts and categorizations in employer organizations are critical under the ACA, and whether the employer mandate is satisfied.

In response to the ACA's employer mandate, and the potential penalties associated with compliance with the employer mandate, many companies, such as Dave & Buster's, reorganized their workforces, including trimming their full-time staffs, and moving toward a part-time workforce. Pursuant to the ACA, this is permissible, as long as the employee count, including the full-time equivalent employees, is still taken into account in determining ALE status. Under the employer mandate, a qualified offer of insurance does not have to be made to a part-time employee, only to a full-time employee.

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