Section 510 of the Employee Retirement Income Security Act (ERISA) prohibits employers from retaliating or discriminating against participants in employee benefit plans for exercising rights they are entitled to under the plans. It also prohibits employers from discharging or discriminating against plan participants for the purpose of interfering with the attainment of any right to which the participants may become entitled under a plan. To establish an ERISA benefit interference claim, a plaintiff must demonstrate by the preponderance of evidence that prohibited employer conduct was taken for the purpose of interfering with the attainment of any right the participant may become entitled to under the plan. In two recent cases heard by the U.S. Court of Appeals for the Sixth Circuit, plaintiffs alleged their employment was terminated, in part, because of the high medical costs they or their spouses incurred while covered by their employers’ plans. However, in both cases, the courts held that the plaintiffs failed to provide sufficient evidence that their employers terminated their employment with the specific intent of avoiding the payment of future medical expenses. As a result, neither claim was successful.

The issue of ERISA Section 510 claims has recently been discussed as a potential concern for employers contemplating reducing their employees’ hours to avoid shared responsibility payments under PPACA. Under these provisions of PPACA, employers could be liable for tax penalties if they fail to provide affordable, minimum value coverage to their full-time employees (average 30 hours of service per week). The question that has been raised is whether reducing an employee’s hours to fewer than 30 hours per week would interfere with the employee’s right to attain a plan benefit, and thus constitute an ERISA Section 510 claim. Although this is an open question, as the cases in the Sixth Circuit illustrate, such a claim would be required to show an employer’s specific intent to interfere with an employee’s attainment of a benefit. While we believe business decisions regarding workforce scheduling would survive a Section 510 claim, employers should seek legal advice before making significant changes in an employee’s work schedule if the change would result in a loss of benefits. (Gaglioti v. Levin Group Inc. (6th Circuit 2012) and Laws v. HealthSouth Northern Kentucky Rehabilitation Hospital LP (6th Circuit 2012))