Small Business Finance News

Trader Joe's Ends Health Coverage For Some Workers

Written by Tim Morral
Published: 9/23/2013

Employees who work less than 30 hours per week will no longer be eligible to participate in the retailer's health insurance benefit plan.

Trader Joe's has been touted as an employer that goes the extra mile for its workers, providing affordable health insurance options to both its full-time and part-time employees.

Trader Joe's Healthcare Benefits

But according to a recent company announcement, that's about to change. In preparation for the implementation of the Affordable Care Act (ACA), Trader Joe's will no longer offer health insurance benefits for part-time workers, defined by the company as employees who work less than 30 hours per week.

Until now, Trader Joe's has allowed all of its employees to participate in a heavily discounted plan that provides health coverage with affordable monthly premiums. Instead, ineligible employees will receive $500 in January to help offset the cost of coverage as well as assistance in enrolling in a new ACA health plan.

Trader Joe's rationale in eliminating health benefits for part-time workers is that discounted insurance options for part-time workers is no longer necessary since the ACA was designed to provide affordable health coverage. In many cases, Trader Joe's part-time employees will be able to receive health care insurance at a lower cost through ACA plans.

The downside is that part-time employees who earn additional outcome outside of Trader Joe's may be forced to pay significantly higher premiums for their health coverage. Higher premiums would kick in for employees with total earnings that are 400% above the poverty line--a threshold at which subsidies for insurance no longer apply.

Trader Joe's isn't alone in its struggle to reconcile the brand's employee benefits program with the ACA. Across the nation, businesses of all shapes and sizes are being forced to make difficult decisions about the health plans they offer their employees.

Although it's too early to determine what employer-based healthcare will look like following the implementation of the ACA, Trader Joe's is seems to show that there will be both winners and losers in the new health care environment.

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