Trader Joe's has been previously known for its employee benefits for part-time workers, but the grocery chain has changed its policies. Employees working less than 30 hours a week will no longer be covered by the benefits Trader Joe's offers. They will have to buy their health insurance under the Affordable Care Act (ACA), or ObamaCare. The employees that are losing their health insurance coverage will each be given a $500 stipend to "hold them over" until they can enroll with ObamaCare.
Some conservatives think that Trader Joe's change in behavior is a sign that ObamaCare is too costly -- they think the grocery chain has foreseen the high costs the Affordable Care Act would place on the company and decided to cut health benefits to avoid these costs.
Supporters of ObamaCare think that this is a solid example of what the law was created for. All workers need health insurance, and not all companies provide it, so the ACA makes sure that people can get what they need, no matter who they work for.
What do you think of those perspectives? Do you think Trader Joe's made a good decision in regards to the company's finances and to the employees' welfare?
USA Today
The Blaze (opposes ObamaCare)
Market Watch
UPDATE: Trader Joe's? More like TRAITOR JOE'S. (That's the pun. I am sorry.)
9 comments:
Thank you for the pun.
In regard to Trader Joe's new decision, I believe that even if it is a good decision in the long term Trader Joe's will inevitably receive some backlash from people losing their benefits, especially since the store was formerly known for their good health care policy. However, like the first linked article says, many feel that this is only a sign that the Affordable Care Act is working as planned.
From a corporate standpoint, this move makes a lot of sense. Labor is usually the largest expenditure of many companies and health care certainly is no small part.
Although the workers without Trader Joe provided health care technically will have another option, it's likely not going to be as good as what they used to have. Trader Joe's health insurance comes in the form of Anthem Blue Cross, a PPO (preferred provider organization), which gives workers much flexibility in terms of which doctors they can and would want to see.
http://www.anthem.com/traderjoes/
However, the range of doctors or health institutions willing to accept those insured by Obamacare may not be as appealing or suitable to the needs of the Trader Joe workers who are set to lose their coverage from Anthem Blue Cross.
One point of universal health care is to take the burden of providing health insurance off the backs of employers - a noble cause. However, until it is fully and effectively developed, my thoughts are that the level of service provided will not be able to match that provided by Anthem Blue Cross. In many foreign nations with effective universal health care coverage, their system has worked well, but how the American version materializes in terms of the quality of patient care remains to be seen.
You've brought up an interesting point, Brandon. Along the line of your comment, I think that it will take a while for ObamaCare to become a national form of health care that compares to other countries, like Canada. The transition stage, when it's just materializing, as you called it, will likely be rough, but we as a country will have to power through and work to create a fluid, effective, and quality system. I just wonder if the challenges ObamaCare presents will make the whole thing be changed or discarded.
I agree with Brandon, when you look at this from a corporate standpoint, it does make sense because companies usually spend a majority of their funds on labor. However, I don't think this is the right thing to do because what will happen to the workers who no longer receive benefits who cannot live off of the $500 the company gave them that was supposed to "hold them over" until they enrolled with ObamaCare? In my opinion, $500 seems like a pretty small fund to cover their health insurance. Couldn't Trader Joe's give them more funds to keep them on their feet until they're insured? Although from the corporate standpoint this may make perfect sense, I still feel that Trader Joe's could be doing more to help its employees when they don't have health benefits.
An article (http://www.economist.com/blogs/democracyinamerica/2013/08/health-reform-and-employment) I read a few weeks ago on the Democracy in America blog hinted at changes similar to this that may come with Obamacare. (The article gives the example of a smaller company hiring more part-time workers in place of full-time workers so that it will have less than 50 full-time workers and will not be penalized for not insuring them.)
Similar to what others have stated, I feel that such examples demonstrate that the transition into implementing Obamacare may initially seem rough, but the implementation of any program with such widespread and far-reaching consequences is bound to have uncertainties and a few hiccups along the way. While these changes have already led some to be wary of Obamacare, I believe that there will be opportunity for improvement in the future; I feel it's a bit too soon to denounce Obamacare as ineffective or counterproductive when we haven't actually seen it in action.
Like Alex, I also felt that the $500 was too little, but I haven't read up about Obamacare very much so perhaps the subsidies would make such an amount reasonable.
I think Elkana's example of the company that hires less full-time workers so it doesn't have to cover health benefits just goes to show that Trader Joe's is still better than other companies when it comes to the issue. Some companies have chosen to cut hours or employees in order to comply with the regulations of ObamaCare, and I think that's worse than what Trader Joe's has done. But then, calling Trader Joe's "not as bad as some" doesn't make it "good."
Even though Trader Joe's is cutting back benefits in a time that will almost certainly earn them backlash, I would like to think that Trader Joe's at least picked a good time to do so - for both them and their employees. Like what Branyan said, labor is a huge cost for companies, especially in the US with laws such as minimum wage, training, safety, etc. Its not a common practice for employees to earn so much working as a grocer. Benefits have been cut by numerous companies before Obamacare was ever thought of, and at least this time around employees have a practical alternative rather than just being forced to go on without health care. All change is relative, and even though Trader Joe's is cutting benefits for a portion of its workforce, I don't think its exploiting its employees in anyway. Universal healthcare in the US has a long way to go, and only time will tell how companies and the people interact with the system.
I thought that the anti-obamacare supporters were stretching their argument a little too far until I looked a little more into it. The ACA is indeed very expensive, and Trader Joe's is making a great financial choice by limiting the number of employees it covers under its health insurance wing. Despite the cost of obamacare, I believe that Trader Joe's is not stating that healthcare is too costly, it is just realizing that healthcare has become too costly for them to maintain. From the start, Trader Joe's has been a very liberal company (healthcare and benefits are some examples,) and it is just making a financial choice that it feels is necessary given the current financial state.
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