Can we cut employee hours to avoid the ObamaCare employer mandate?

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My company operates on a shoestring. Currently, we don't provide health insurance coverage for employees, but we are large enough to be subject to the employer mandate of ObamaCare. Is there anything stopping us from just cutting everyone's hours so they don't qualify for benefits? 


ObamaCare is a product of many compromises, including over which employees are entitled to health insurance coverage. The law requires larger employers (those with at least 50 full-time and full-time equivalent employees) to provide health insurance to employees. However, not all employees are covered: Only employees who work at least 30 hours a week are entitled to health insurance. (This mandate kicks in at the start of 2015 for employers with more than 100 employees; employers with 50 to 100 employees must begin complying in 2016.)

So what's to stop you from cutting employee hours so everyone works a 29-hour week? Some employers have already announced that they plan to do exactly that. The problem, according to employment lawyers who have recently begun weighing in on this issue, is that this might constitute illegal retaliation under the law. 

ObamaCare prohibits employers from taking adverse action against employees because they have health insurance. Such an action would constitute illegal retaliation. As you can see, this prohibition is open to a number of interpretations. For example, if your employees currently don't have health insurance, and you cut their hours so they never get it, does this provision apply? If you hire all new employees for no more than 29 hours per week, so they never qualify for insurance, are they protected? These questions will have to wait for the inevitable lawsuits and legal decisions that follow in their wake. But, the retaliation provision does seem to clearly bar employers from cutting the hours of employees who already have insurance in order to make them ineligible for insurance in the future. 

Before you take any action to make sure your employees don't qualify for health insurance under ObamaCare, you should talk to an experienced employment lawyer. If you can't afford health insurance, then you definitely can't afford an employee lawsuit. 

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