Obamacare and Trader Joe’s: The Unique Grocery Experience, with Not-So-Unique Problems

Kelsey Lucas / September 11, 2013

RICHARD B. LEVINE/Newscom

Trader Joe’s grocery store is known for its affordable prices, unique food, and friendly staff — a grocery experience. But thanks to changes in employee health benefits, the joyful atmosphere could be in jeopardy.

For years, Trader Joe’s has offered health care coverage to its part-time employees at reasonable prices. But on August 30, Trader Joe’s CEO Dan Bane sent employees a confidential memo stating the company will no longer offer health care for anyone working fewer than 30 hours a week.

“With low-wage workers eligible for tax subsidies to buy health insurance next year, the company has apparently calculated that offering medical coverage to part-timers who work 18 hours or more is no longer worth the cost,” the Huffington Post reports.

However, according to Huffington Post, Bane’s hoping to soften the blow by promising employees 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.”

A current Trader Joe’s employee told Huffington Post the coverage she’ll lose is one of the best parts of her job. She said several of her co-workers, especially those with young families, are there for the insurance as much as anything else.

“I can say that when I opened and read the letter yesterday my reaction was pure panic, followed quickly by anger,” she said.

Obamacare’s employer mandate penalizes employers that do not provide the government-dictated level of insurance to their employees, and business owners can avoid the penalty if they have fewer than 50 full-time employees or if their employees work less than 30 hours a week.

For the many Trader Joe’s employees who are on the cusp of 30 hours, “the memo left little hope that they can pack in extra hours to meet the requirement,” Huffington Post wrote. Bane emphasized the company will continue to formulate weekly schedules that focus on supporting the customer experience.

Trader Joe’s investment in every employee has allowed the company to find success in a competitive market, but now it faces a problem that many other employers are confronting.

An independent study by Investor’s Business Daily, broken down by state, proves more than 250 employers have cut work hours or jobs or taken other steps to avoid Obamacare costs already.