Specialty-food retailer Trader Joe's has been a leader in good employment practices, providing generous health benefits to even its part-time workers. But the company has decided, according to an executive memo obtained by Huffington Post, to
drop coverage for part-time workers, and will help them obtain subsidized insurance on the new health exchanges.
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. [...]
"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," Bane wrote in the memo.
The company told HuffPost it would not confirm or deny the existence of the memo. In a statement, a spokeswoman said, "We have made some changes to our healthcare coverage that we believe will be a benefit to all Crew Members working in our stores. We are committed to providing all our Crew Members with benefits that are among the best in our industry."
Trader Joe's is making a business, rather than a political, decision here. They're not just cutting their part-time workers loose, but providing assistance for them in actually getting new coverage. However, the question remains whether these employees will be able to get equivalent insurance at the same affordable prices.
A current Trader Joe's worker described the coverage she'll likely lose as "one of the best parts about the job." (The employee requested anonymity since she isn't authorized to speak to the media.) She said she pays only $35 per paycheck, or $70 per month, for a plan that generally covers 80 percent of her medical costs, carries a reasonable $500 deductible and includes prescription drug coverage.
That's pretty generous coverage, and likely not obtainable for the same price on the exchanges, since only the Gold, the second most generous plan on the exchanges, provides 80 percent coverage for medical costs. The $500 Trader Joe's is providing will help, but perhaps not enough to provide an equivalent replacement.