Obamacare Update: Trader Joe’s Drops Health Insurance For Part-Timers

Obamacare has reportedly convinced grocery store chain Trader Joe’s to end health insurance coverage for its part-time workforce. Anyone working less than 30 hours a week who receives Trader Joe’s health coverage will need to find a new plan from the so-called healthcare exchanges or marketplaces.

According to a memo obtained by The Huffington Post, Trader Joe’s informed employees that “Depending on income you may earn outside of Trader Joe’s, we believe that with the $500 from Trader Joe’s and the tax credits available under the [Affordable Care Act], many of you should be able to obtain health care coverage at very little if any net cost to you.”

Up until now, one of the perks of working at Trader Joe’s was a generous health insurance plan. “Trader Joe’s has long offered health care, dental and vision plans to part-time workers at low cost — which is rare in the grocery industry.”

During an August 2009 town hall meeting, President Obama promised that “If you like your healthcare plan, you can keep your healthcare plan.”

Employers around the country are retrenching when it comes to health benefits as a result of the controversial federal law. For example, citing Obamacare, UPS, the country’s fourth-largest employer, last month decided to cut health insurance benefits for thousands of spouses of its white collar employees.

Commenting on the Trader Joe’s move to drop part-timer health insurance, Investor’s Business Daily observes that “The specialty grocer’s move adds further evidence that ObamaCare will cost far more than the $1.4 trillion currently forecast, as businesses and governments find ways to transfer their employee health costs onto the federal government, and as millions of other workers find they can get a better deal in the taxpayer-subsidized exchanges.”

Many state healthcare exchanges, however, don’t yet exist or are behind schedule in ramping up, prompting one US Senator to describe the situation as a huge train wreck. At least 13 state attorneys general and other officials have warned about the possibility of fraud and identity theft associated with the healthcare exchanges.

Although the employer mandate has been postponed for one year, many employers around the country have put their hiring plans on the back burner, or have decided to downgrade workers into part-time status, to avoid the Obamacare mandate entirely. Insurers have already warned of steep insurance premium increases flowing from Obamacare implementation. Some covered businesses reached the conclusion that it might be more cost effective to drop employee health coverage completely even for full-time workers and pay the Obamacare employer penalty instead.

With Democrats controlling both chambers in Congress at the time, the US Senate passed Obamacare, a.k.a the Affordable Care Act, on a straight party-line vote on Christmas Eve 2009. The House of Representatives narrowly passed the Senate version of Obamacare on March 21, 2010, and it was subsequently signed into law. In June 2012, the US Supreme Court upheld the constitutionality of the individual mandate in a 5-4 decision.

Whether or not you work for Trader Joe’s, has your employer implemented any changes to your benefits as a result of Obamacare?

[Image credit: Anthony92931]