Trader Joe's To Drop Health Coverage For Part-Time Workers Under Obamacare: Memo

[ellenrr]

Source: Huffington Post

After extending health care coverage to many of its part-time employees for years, Trader Joe's has told workers who log fewer than 30 hours a week that they will need to find insurance on the Obamacare exchanges next year, according to a confidential memo from the grocer's chief executive.

In the memo to staff dated Aug. 30, Trader Joe's CEO Dan Bane said the company will cut part-timers a check for $500 in January and help guide them toward finding a new plan under the Affordable Care Act. The company will continue to offer health coverage to workers who carry 30 hours or more on average.

Read more: http://www.huffingtonpost.com/2013/09/11/trader-joes-obamacare_n_3902341.html

[kelliekat44]

1. Don't think they pay for the health care coverage now. It comes out of employee pay checks.

It's just that they can offer coverage at bulk rates. It may be even cheaper for employees to purchase their own coverage under the ACA and they won't be angry if they see their pay check increase because health care costs will no longer be taken out of their pay. I think this is a part of system that doesn't get explained well. Many companies "offer" healthcare but it is taken out of the employee's pay and people don't think about it. If the ACA works as planned employees will be able to shop for cheaper and better plans in the exchange. If businesses cooperate, they will see their contribution costs...if they contribute at all...greatly reduced also. If the exchange plans are cheap enough and inclusive enough employees will be able to handle the payments on their own and still save money. We just need to wait and see how it works in reality. A much better job of explaining the ACA really needs to be done. However, I do believe that some companies like to make the headline that they are dropping coverage because of the ACA...this is the RW corporate way of bashing Obama.

"Many retailers do offer part-time employees health care coverage, but at prohibitively expensive rates that swallow much of a worker's paycheck. Trader Joe's wouldn't comment on how high the premiums are for its part-time employees or how much of its part-time workforce opts for the plan."

[loudsue]

3. Under many state laws, companies have to pay at least half of the premium for

health insurance...and can't charge the employees the entire amount. The truth is, the exchanges will offer better coverage at lower rates.

[blackspade]

9. One issue to consider is that at many companies....

your benefits are part of your compensation.
If they drop the healthcare portion then you are in fact taking a backdoor pay cut.
However, if they add the difference to your pay rate I see far less of a problem with it....
Unless you don't have access to one of the exchanges yet.

[TBF]

2. Well I knew the guy running Whole Foods was a libertarian -

but didn't know that about Trader Joe's.

Yet another capitalist enterprising that is all marketing ... I shouldn't be surprised.

[Bernardo de La Paz]

5. There's a huge difference between pushing full-time workers into part-time and this.

What other employers have been doing is reducing full-time workers hours below 30 per week so that they become 'part-time' workers and the employer doesn't have to pay insurance.

Trader Joe's is not reducing worker's hours. They are already part-time workers.

[AtheistCrusader]

15. Good to see you didn't read the article.

[TBF]

21. Your personal attack is lovely -

but Obamacare is never going to be an adequate substitute for single-payer health care. We need medicare for all.

That is my position and I'm sticking to it. YMMV.

[AtheistCrusader]

23. That's not an attack. What you said about the owner of Trader Joes was, if you need a reference.

[TBF]

25. His actions are speaking for themselves.

I tend to avoid Whole Foods and go to Trader Joe's instead if I'm looking for healthy products. But that was based on my prior knowledge of the Whole Foods CEO Jim Mackey and his libertarian leanings.

Trader Joe's trends dem (check open secrets.org) so it's a surprise that he could come out against ACA.

If you've got insider knowledge or something please do enlighten us on what's going on with him.

[AtheistCrusader]

30. They didn't 'come out against ACA'.

""Depending on income you may earn outside of Trader Joe's" -- i.e., another job -- "we believe that with the $500 from Trader Joe's and the tax credits available under the ACA, many of you should be able to obtain health care coverage at very little if any net cost to you,""

That actually means a larger paycheck to the worker. This is a net win for the company, and the employee, made possible by the ACA.

Single payer is surely better, but this is not a negative move by TJ's, despite ACA detractors I have seen elsewhere seemingly desperate to frame it so. (Not you, I mean Facebook and shit, I think you interpreted it negatively, but I don't assume you are doing so to tear down the ACA)

[TBF]

32. Correct -

ACA was not my dream legislation, but it will cover more folks and cover pre-existing conditions amongst other things.

I'd love health care to be separate from employment, in that we wouldn't be "insured" but rather covered by a universal system.

[AllyCat]

4. Not sure what to think of this.

Individuals cannot get the credit, only families. So those with families may be surprised at how inexpensive this might be for them.

I do resent TJ's putting the hourly total on there and talking like one of the nasty, anti-ACA organizations.

And of course, I will join in the usual cacophony of "this wouldn't have happened with single-payer!!!"

[DallasNE]

6. Well, The Race To The Bottom Hasn't Lost Any Steam

It looks like the race to the bottom jumps into high gear since Trader Joe's is both dropping health insurance to those working under 30 hours AND severely cutting retirement account contributions. With the prices Trader Joe's charges their business model is far different than Costco so I find it odd they compare themselves to Costco. I also note that they do not claim to pay a higher salary than Costco so one can assume they pay less and you need to looks at all labor costs before pointing fingers. Their price structure already keeps me out of their stores so I can't even boycott them for this action.

[AtheistCrusader]

17. Price structure?

With the exception of meats like chicken and beef, TJ's is pretty much the cheapest option around here. I LOVE shopping there. The stuff is better and cheaper than Safeway.

don't get me started on whole foods...

[Roland99]

7. Putting more and more on healthcare exchanges

one step further to universal/single payer?

[cbdo2007]

11. Yep, most people are missing the point here...but you've got it

and the poster way above got it. We want more people on the exchanges. It will be good for all of us and sounds like Trader Joe's is still contributing the same amount toward the health coverage as they did before.

[Gormy Cuss]

13. That is ignoring whether the employees getting shuffled off to the exchanges benefit however.

Last edited Thu Sep 12, 2013, 12:57 PM - Edit history (1)

Will their out-of-pocket costs increase or decrease? Will relying on tax credits rather than payroll deduction make it harder to budget and harder to manage for these employees?

I'm in favor of single payer but I'm not in favor of screwing over some employees in the short term in order to achieve that goal.

[cbdo2007]

20. Well the other option is everyone gets screwed in the long term because single

payer isn't happening anytime soon.

[Gormy Cuss]

31. No, the other option is that employees don't get screwed over, short or long term

because employers can dump them on exchanges to save money.

If indeed the employees get BETTER coverage or coverage at a lower out-of-pocket cost it's a good thing for both, although I highly doubt that most employers consider employee benefit when making such a policy change.

[cbdo2007]

33. So you're admitting this could be "a good thing for both"....so why are you arguing?

[Gormy Cuss]

34. Why are you arguing when I question whether it will penalize employees *right now*?

It's not a win for the employees if their health care coverage becomes less affordable or less comprehensive NOW even if at some point down the line the ACA benefits them.

Here are part time employees losing the rare benefit of employer-provided group health insurance, with plans, costs, and premiums brokered by employer representatives on behalf of the group. They will move over to exchanges where they will need to learn about plans, costs, and do their own cost-benefit analysis on which level of plan is appropriate for their needs and finances.

Under the employer's plan they paid the same co-pays as their fellow part timers regardless of their ages and individual circumstances. With the plans offered through exchanges they'll see that the value of that $500 annual payment in lieu from Trader Joe's will go far if they're young or have little other income, but it will be eaten up quickly if they are older or have other household income. IOW, some workers may benefit from this arrangement, others are likely to have an effective reduction in compensation because of this move.

Of course we can just pretend that it's all A-okay and no one will be harmed because eventually the exchanges will be better than employer-provided plans. Eventually, say optimistically by 2020, but in the meantime let's turn a blind eye to those employees who are stuck paying more.

[TBF]

22. If it gets us closer you will hear me champion it -

but for now it just looks like a hand-out to the large insurance companies.

I want them put out of business (or at the very least turned into a secondary market).

Basic health care should be a right for all.

[blackspade]

8. Crap, and I was a huge fan of Trader Joe's.

Will they be getting a $500 check a month?

[joeglow3]

10. For a 20 hour a week employee, that would work out to a $5.56 an hour raise

I am guessing it is NOT once a month.

[blackspade]

12. My guess is that you're correct that it is a lump sum.

[Cryptoad]

14. From what Published rates we have so far, Part time workers

making less than $18K /yr , will have their insurance completely subsidized by ACA.

[mopinko]

16. thus saving these employees $70/mo

for single person coverage, per the article.
plan covers 80% of costs, $500 deductible.

[paulrandfu]

18. Good news for Obamacare

The more that use it the stronger the program will be and health care costs will be less. These workers will end up paying zero out of pocket for better health care.

[Iwillnevergiveup]

19. At any given time of the day

any of the 3 TJ's in my area have full-to-capacity parking lots. Employees are constantly unloading huge trailer tractor trucks and restocking shelves. Business looks great for them at least in my neighborhood. Their employees are not paid a living wage, so whatever happens, I hope it benefits ALL of them. They work hard!

[gopiscrap]

24. and I thought Trader Joe's was a progressive outfit

just goes to show ALL business is fucked and evil. First of all we should have a national universal single payer system not tied to employment. Secondly we should nationalize all businesses. Capitalism IMHO is more detrimental to the common good than beneficial.

[TBF]

26. Best thing I've seen in this entire thread --

"Capitalism IMHO is more detrimental to the common good than beneficial."

Damned straight.

[gopiscrap]

27. thank you!!!

[gopiscrap]

28. BTW: I love Wisconsin

I have spent a lot of time in WI singing and working on tour and have found the folks to be warm and accepting. Have great memories of Fox Bluff, Madison, Oregon, Milwaukee and Racine.

[Iwillnevergiveup]

29. Totally agree with your statement about capitalism

and LOVE Wisconsin, too. Luckily, I have some fantastic "country cousins" in the northwest part of the state - former dairy farmers. Just got back from a visit there....don't necessarily want to go In the winter!

[TBF]

35. Wisconsin is too cold -

but it was a great place to grow up in the 70s. I was in a small town, but we still heard about the Pail and Shovel Party at the University of Wisconsin etc ... There was still a lot of manufacturing then - all of our dads were in unions. Unfortunately it's been taken over by some pretty backward folks as of late, but I would imagine it is still a friendly and laid-back place.

[gopiscrap]

36. Being from Frankfurt and Tacoma both towns where it hardly ever snows

I loved the snow. I remember being in Edgerton, Oregon, Green Bay, Irma, Marinette while singing on tour marveling at how cold it was and that people were still going on with their life even tho there was about 4 inches of snow on the ground. Where I came from that would have meant 2-3 days of no school and any more than 4 inches and businesses would have closed and at about 6 everything shuts down!

[TBF]

37. lol -

I have never even heard of Irma! But I was born in Ripon which is also pretty small (but sometimes folks have heard of it because it's got a small college). We were in the middle - about 1/2 way between Green Bay and Milwaukee, a little further to the west.

We didn't get many days off school - it would have to be a blizzard. They spend a lot of $$$ up there on snow & salt. Down here in Texas it's just different weather. No snow but the kids get off if a serious hurricane comes through.

[gopiscrap]

39. When I was on that singing tour, we sang in 28 different towns

I loved the different areas, but specially by the lake. Irma is in the upper middle part of the state. We sang at a place called Lincoln Hills Detention Center. In Tacoma, my wife is a teacher and if there is even a hint of snow, she is up at about 530 in the morning encouraging the newscaster to call school off...it's hysterical to watch her...but then again it only takes a bit (Tacoma is built on hills) after they call it she snuggles back in bed and watches me get up to go to work. (Life isn't fair sometimes)

[closeupready]

38. Madison was a terrific place to be a college student -

and it was nice to live there when I was younger, as I tried to figure out what I wanted to do with myself, very relaxed pace and liberal people, but yes, Tommy Thompson heralded a big downslide in politics and it seems to have continued, unabated, from that time.

The economy however is not the best if you aren't an academic or if you are not in politics. Sadly, because it would be a nice place to live in summer.

[gopiscrap]

40. I loved Madison

[closeupready]

41. Me, too - Remember Teddywedgers? Or the Plaza?

Fun times.

[gopiscrap]

42. The Plaza yes.

What I loved most about it was having drinks at the Student Union on the lake!

[TBF]

43. I got out as quick as I could -

graduated from UW at 21 and split.

But, yes, the summers are beautiful on Lake Mendota