Trader Joe’s Explains Why It’s Cutting Health Benefits For Part Timers

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Jessica Rinaldi / Reuters

Trader Joe’s announcement last week that it would do away with health insurance options for its part-time employees drew strong reactions from some.

The Huffington Post, which originally obtained the internal memo outlining the retailer’s plans, quoted one employee who called her health coverage one of the best things about the job. “I can say that when I opened and read the letter yesterday my reaction was pure panic, followed quickly by anger,” she reportedly said.

The full impact of lost private insurance options under Obamacare is not so simple, however. In an email published (by all appearances) in full by The Washington Post Monday, Trader Joe’s responds to the concerns of someone who wrote to corporate about the coverage employees stand to lose. The retailer’s explanation offers a convenient window into how the health insurance landscape is set to change under Obamacare.

Rather than provide affordable options for purchasing health insurance to part timers (those working less than 30 hours weekly), as Trader Joe’s does now, as of January the company will simply cut them a $500 check to help cover the costs of obtaining coverage under the new exchanges forming under the rubric of the Affordable Care Act.

This, in a nutshell, is Trader Joe’s reasoning, quoted from the email:

Stated quite simply, the law is centered on providing low cost options to people who do not make a lot of money. Somewhat by definition, the law provides those people a pretty good deal for insurance … a deal that can’t be matched by us — or any company. However, an individual employee (we call them Crew Member) is only able to receive the tax credit from the exchanges under the act if we do not offer them insurance under our company plan.

The email offers the example of a single mom making $18 an hour working 25 hours a week who currently pays $166.50 per month for her Trader Joe’s coverage. With the tax credits under the ACA, the message says, she can get nearly identical insurance for roughly half that under an Obamacare health insurance exchange. Add to that the $500 she’ll get in January and the bleak picture of lost benefits starts to change rather dramatically.

The message acknowledges that for some part timers—namely those who, for whatever reason, report real income above the threshold for receiving subsidies to buy insurance (400% of the poverty line)—the benefits change will mean higher insurance costs. And, the message says, for 77% of Trader Joe’s employees — presumably those working more than 30 hours per week — there will be no change in insurance coverage options.

[The Washington Post]

45 comments
kyfireflies
kyfireflies

I work for Trader Joe's and although I love the company, the crew, and my job this change drastically affects my family.  I have a family of 6 currently on the healthcare coverage.  It is the best coverage out there, better than huge corporations.  Come January I will lose my benefits and because I have to report my husband's income and because his job offers insurance we will lose out big time.  We now have to pay double for the insurance and our deductible is 3x more.  It's very unfortunate and I don't agree with many of the changes going on with the company.   I don't want to work anywhere else though because I am attached to my store and my co workers. 

justkb
justkb

whole foods is taking away benefits in 2015. they just have not announced it yet. they also will not allow leadership to hire full time employees starting this month.....

CapitalStars02
CapitalStars02

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eramfam
eramfam

Obama PROMISED we could keep our healthcare if we liked it! Guess not!

This is a BAD DEAL for part time employees AND for customers!

The TJ store Captains are now requiring employees to NOT DISCUSS the insurance policy change with customers or each other! Huh! Trying to put out all the fires !Just snuff out the controversy!

BobJan
BobJan

Sounds like Trader Joes is looking out for it's employees.

Marts
Marts

I work for Trader Joe's.  The benefits are still amazing, the staff and work environment is incredible.  No qualms about what they are doing, I think it's best for the company and will work out fine for the employee's.  I am so glad to have such a wonderful job with them and have never been in a work environment where I was treated so well.  My 2 cents.

IMKNARFIE
IMKNARFIE

I have friends at Trader Joe’s, so I’m always hearing about the goings on there. Of late, there has been an accelerated hiring of part timers, usually teenagers or college students, with no experience included, and the implementation of a “new” computer system which “indiscriminately” sets workers’ shift days and hours.

The long term employees are asked to submit their hours of availability and are assigned the timeframe decided upon by the computer. Funnily enough, many of them have lost hours, some being the critical margin needed to reach the 18 per week average necessary to be eligible for Trader Joe medical coverage. Their past schedules have been disrupted to accommodate the “newbies”.These are the folks who have been supporting Trader Joe’s Customer Experience for years. Interesting how the schedules they have worked for years, to manage family and life in general , are suddenly “not the hours we need from you” but are available to new hires.

I found it interesting that Mr. Bane was quoted as saying, "It is important to note ... we do not create our weekly schedules with healthcare eligibility in mind," Bane wrote. "Rather, we will continue to create weekly schedules that are solely focused on supporting the customer experience." Sorry, this is hyperbole. Before the supposed ACA business, Trader Joe’s made sure that the employees they valued made their necessary minimum number of hours to maintain their health care. Now that health care can be dropped into the employees’ lap, the result is a lot of unnecessary worry and heartache for the employees and a lofty “no fault” statement by the home office . For shame .

He did, however, inform workers that corporate contributions to employee retirement accounts would be drastically scaled back, by a third for some and two-thirds for others. Bane argued that the company's "very generous" contribution rates had been too high for the industry. "Whole Foods and Costco (two public companies) make retirement plan contributions that are significantly less than Trader Joe's," he wrote. This, then, is what is happening to the “Unique Grocery Store”. Just another greedy corporate enterprise that really cares not a whit for those that make it work. No longer a mover and shaker in the food industry, but simply another user and taker.

New hire, two weeks new, enquires as to the requirements necessary for health benefits, having been told during interview that there was an eighteen hour weekly average time, but now it is thirty hours or ACA.

Veteran, single mother, was working a fixed schedule to manage her childrens’ school and evenings and weekends and being a parent who loves their child, now must worry about health care, about babysitter expense, about imposingon relatives and friends, about asking for assistance from an already reluctant spouse.

Disabled person who depended on working relative for a lift to and from work now has no lift because their hours are disrupted in the name of customer experience.

This friendly, neighborhood store, this community store, has had the members of the community as their staff for many years. They have had the community members as their customer base. But now, it seems, the corporate mentality and greed have eclipsed the worth of community. Scaling everything down to a part time organization will save those Corporate health care expenditures, but what will it do to the community? The legislation that allowed for it to be cheaper for a company to dump its’ employees health coverage than to continue to provide it is something which needs closer examination. Passing the buck to an evil computer system which is allowed to determine employees’ needs and abilities is just that, passing the buck, and oh so smart , to pass it to a nonentity who can assume no blame and suffer no consequences. What is the purpose of the managers in these stores ? They are certainly not “managing” their employees. They are not looking out for the people who are a responsibility of theirs, responsibility being caring for someone or something.

Many people were, and some still are, proud to be Trader Joe employees. If TJs becomes another corporate monster then hopefully it will meet with a monsters’ deserved fate. There is yet time to be the community spirited, fun, lighthearted organization we have come to know and judged as being above the rest. Be Unique, supply and live by Everyday Values. Be a part of the Community. Be Family.

mary.waterton
mary.waterton

Of the few jobs being created most are contract, temporary and part-time. Why? Obamacare.

leon1376
leon1376

We're getting scammed folks but at the moment, it's difficult to see precisely how it's being done. It's like a con-artist explaining a pyramid scheme. It sounds perfectly wonderful. What could go wrong? We're going to get mightily screwed, that's what's going to go wrong. I'm slowly coming to the conclusion that the United States Congress is populated by some truly evil people. I cannot remember when Congress has done something good for the working class in this country. Name me one thing. Everything Congress does is designed to put money in their pockets and give us the shaft. On would be hard-pressed to find 635 more worthless humans on this planet. , 

kathy
kathy

Insurance under the ACA is truly going to be affordable.  There are pretty heavy subsidies.  The Republicans are in a panic to scuttle the plan before people find out what a good deal it is.

Tommy34684
Tommy34684

It's planned store for the Tampa area will fit right in with the rest of the employers in the area.  They all pay poorly, no benefits, part time hours, etc.

It'sOnlyTJWasteland
It'sOnlyTJWasteland

I'm reposting what I posted on the Washington Post. My essential point is: This move might cost TJ employees less for coverage each month, but we don't know if it will cost less for medication, co-pays and procedures. The subsidy might be less next year. TJ's is shifting their burden of payment to the taxpayers and they are being spin-doctors. Here's what I posted:

I work at TJ's 24 hrs/wk and at another retailer 16 hrs/week. I am a full-time student and I don't live at home. 

TJs has continually cut our benefits, and I accept that they needed to do so in order to invest in new stores and grow. This is where I no longer grit my teeth. This is where I'm furious. They're taking advantage of the ACA. We had no heads-up and many of us can't radically alter our schedules with no notice or alter them at all. They say 77% aren't affected; I say ~25% ARE.  

I am concerned and upset because I don't want to be a guinea pig, nor can I afford to be. In order to get the equivalent plan on the exchange, I would need gold. It's not just about the monthly payments, but also the co-pays and the amount we're responsible for. I can't afford gold. In my state, even after the ONE TIME 500 $ (I estimate 350 after tax) and subsidy, a silver plan will cost me 100/month, 30$ more than now. I have several chronic but non-life threatening conditions, and I know what my monthly medication and co-pay visits to doctors are now(20$ for med & co-pay). Will my doctors accept the new one? Will I pay a higher co-pay or a higher %? Not even counting the 30$ more a month, I may end up paying 50-200% more of costs for treatments and procedures I need, not to mention that I could have a car accident. I'm worried that next yr the costs will sky rocket or the subsidy will drop. TJ insurance starts in July; I already paid premiums and I'd have to again in Jan. 

The mother seems to be quoted at bronze, not gold. How much will she pay for antibiotics? 20$, or more around $100? What if her child breaks his/her arm or has a concussion? Before she'd pay 20% of the cost, under bronze it would 40%. Maybe she won't call out when she has strep throat because she has to pay for antibiotics. Maybe people who work ~36 hrs/wk will now go to work sick because our hours tend to get cut to ~30 in the slow summer months and they will need to compensate for the loss of hours in summer.

MrBenGhazi
MrBenGhazi

Unfortunate title to the article. Really paints a negative picture of what is essentially win-win for all of the employees in this scenario.

BillMontei
BillMontei

So what's new?   Another employer trying to cheap out on their responsibilities.  I, for one, will stay away fro TJ until they do the right thing.

fitty_three
fitty_three

Don't blame Obama - blame Trader Joes.

POTUS isn't responsible for corporate greed.

AndraCorinnedelRosario
AndraCorinnedelRosario

@eramfam they are asking crew members to not discuss this with customers because IT'S POLITICS AND ITS RUDE TO DISCUSS POLITICS, RELIGION AND SEX WITH YOUR CUSTOMERS. You say they are trying to snuff out the controversy?  That's so presumptuous. It's to provide the best experience for the guest.  Just because you don't like the ACA, doesn't mean you have the right to be so hateful towards a company that you clearly know nothing about. :(


eramfam
eramfam

@BobJan  NOT! Not equivalent insurance--a lot of unrest among empoyees- they should unionize- then these things can't be dropped in their laps.

katepickert
katepickert moderator

@Marts Hi. I'm a reporter at Time and I'd like to chat with you. Can you e-mail me? kate_pickert(at)timemagazine.com

eramfam
eramfam

@Marts Obviously the insurance change doesn't affect you--or you wouldn't like it much. Just lookin after no. 1 eh?

AndraCorinnedelRosario
AndraCorinnedelRosario

@IMKNARFIE Wow.  It IS SAD that whoever you know that works there feels this way.  I have not run into ANYTHING like this at the TJ's my husband works at.  All crew members, full and part time are happy and grateful.  Seems like the world is all up in TJ's kool aid and don't even know that flavor.  Seriously.  There are more HAPPY people working for TJ's than MAD.  If they don't like the new policies, then you have the right to QUIT!!  There are PLENTY of people that would be ECSTATIC to get a position at such a wonderful company.  

Marts
Marts

 @IMKNARFIE I work at Trader Joe's part-time and am sad that your friends who are co-workers feel this way.  I have a much different perspective.  I have only had but a wonderfully caring and respectful management staff the entire time I have worked for the company.  They have offered me incredible flexibility in scheduling and taking time off that I have never experienced at any other job. My benefits have changed in the last few years, but I still believe they are some of the best in the industry.  I would encourage you to look into benefits at similar jobs.

When this shift in Health Insurance came to be, our Management acknowledged that while schedules are based on store needs, they would do everything they could to give us the hours we wanted and that Trader Joe's has never asked them to cut hours back to keep people from benefits.  I also believe your statement about hiring young college kids to push out other people is false and is a constructed idea by some crew members that are upset.  Trader Joe's has always supported it's veteran staff incredibly, which is one reason why they offer such high pay to them, to keep them around.  So many of our staff works over 30 hours as part-time employee's and will have no change in benefits.  

I would encourage your friends to move on if they are so upset.  Though I have encountered similar sentiment from other employee's, they seem to change their minds and feel a lot better when things are fully explained to them.  Theres been a lot of scared and anxious employee's that have been quick to come up with things that just aren't true.  It's fine to have issue's with things your employer does and offer them feedback, but at some point you either gotta support the company you work for or move on.  I still support them and think it's a significantly attractive place to work.

AndraCorinnedelRosario
AndraCorinnedelRosario

@mary.waterton lol It's so amusing when people just blame "Obamacare" for everything.  Bunch of haters.  When people don't fully understand all that is happening, they blame "Obamacare". It's so amusing to me!

Lee23
Lee23

 @mary.waterton Sorry you can't blame everything on Obamacare, when the corporations get so greedy they can't see the forest for the trees.  Maybe the CEOs should take a cut, I don't think that would take the bread off their table or cost them daycare or......  that's right, it wouldn't change their lives at all except maybe one less yacht but probably not even that.  

ToddHoover
ToddHoover

@leon1376 The Government came up with social security. Are you complaining about that too.

BobJan
BobJan

@leon1376 435 in the House. 100 in the Senate. 2 in the White House.

RealityIsNotOptional
RealityIsNotOptional

@kathy 

Then why does Obama use 'Obamacare waivers' as political favors?  Why does Obama 'waiver' his entire staff ?

katepickert
katepickert moderator

@It'sOnlyTJWasteland Hi. I'm a reporter at Time and I'd like to chat with you. Can you e-mail me? kate_pickert(at)timemagazine.com

mjshep
mjshep

@BillMontei I don't think you read the article.  An employee pays for their health plan under TJ's current policy.  Under the ACA they will pay less.  They can not use the ACA exchanges if TJ were to continue to offer the more expensive (for the employee) plans. Perhaps TJ's may save some money, but so will the employees.  

bryanfred1
bryanfred1

@fitty_three No, but he is responsible for implementing legislation that has entirely predictable results. Write a law saying "If you employ 50 or more people then you must provide insurance to anyone working 30 or more hours per week" and you are going to wind up with a bunch of companies with 49 employees and people working 29.5 hours per week.  Anyone incapable of following that chain of cause and effect isn't competent to hold office.  Rail against corporate greed all you want but everyone responds to financial incentives - even you, fitty three.

eramfam
eramfam

@AndraCorinnedelRosario @eramfam 

Oh I know all about Trader Joe's-inside and out. I also know that there are no shareholders to benefit from this move. The employees are ANGRY for a good reason! Many customers ask because they are concerned -also- as I said before-employees are not allowed to discuss this among themselves! They are trying to put out the fires-assuage the discontent-contain the backlash.

They hired bloggers to counter act the bad press. Bloggers like you-who defend the motivations of this GREEDY COMPANY. How rich does Dan Bane have to be?

I voted for Obama. This isn't about the ACA. Trader Joes used the ACA as an EXCUSE to take away the employees prized healthcare. They did not have to. They CHOSE to. Starbucks didn't. Many companies didn't--but TJs did. Shame on you Trader Joe's.

AndraCorinnedelRosario
AndraCorinnedelRosario

@eramfam @BobJan does @eramfam work for TJ's?  Im curious, because he is all up in their business in the name of the crew members... grabbing torches and pitchforks to attack the company does not solve ANYTHING!! Most companies do not provide ANY COVERAGE AT ALL. 

eramfam
eramfam

@Marts @IMKNARFIE  Move where to exactly? This isn't about fear OR mis information. This is about being VERY informed--and it's a BAD DEAL for parttime employees who depend on the insurance they came to rely on! A very bad deal. Corporate greed is what this is.

leon1376
leon1376

@ToddHoover @leon1376 The Washington Post just had an excellent article today regarding all the people with "disabilities" who are crushing the Social Security system. A lot of the illnesses are subjective such as muscular problems or mental illness. The Post wrote extensively about one guy who is 58 and worked in a paper mill in Maine. The paper mill went belly up and he went on Social Security for his "bad back" that prevents him from finding another job. The last line of the article mentions how this fellow enjoys riding his Harley Davidson (!!!) to bike meets. My original premise holds true. Congress has no intention of doing the right thing for taxpayers. They're scamming us and they're allowing moochers to scam us as well. The system is broken. It's just a matter of time before it comes clanking to a halt.  

leon1376
leon1376

@BobJan @leon1376 Thanks for the correction, amigo. It just seems likes there's more. I suppose you could call it "the General Custer Syndrome". After the first 500, it really doesn't matter any more. We are so screwed. 

fitty_three
fitty_three

@bryanfred1 

Then, why didn't Strabucks.

And, no, don't try to include me in your "Obama Hate".

Ahu
Ahu

@fitty_three @bryanfred1  

Or maybe they have families and they would like to make a living. 49 employees is hardly a "big corporation".

bryanfred1
bryanfred1

@fitty_three @bryanfred1 First, not EVERY business is going to react this way but based on similar reports plenty of them will.  Second, I don't hate Obama.  My point was simple - set explcit limits after which there's a financial disincentive (in this case 50 employees, 30 hours) and businesses will walk right up to the line.