Blog PostSeptember 13, 2013

Trader Joe’s: Goodbye Part-Time Benefits, Hello Exchange

Grocery Chain Latest U.S. Employer to Make Drastic Changes in Response to ACA

Grocery Chain Trader Joe’s has been doing something for part-time employees at its 400 stores nationwide that’s relatively rare among the company’s counterparts: offering health benefits. That will end Jan. 1.

As reported in Bloomberg, the California-based company issued a statement saying that instead of health coverage, employees who work fewer than 30 hours a week will get a $500 stipend to help them purchase health care somewhere else – like the health care exchanges which are part of the federal Affordable Care Act. Trader Joe’s said these part-timers could find better deals on the exchanges because they may qualify for federal subsidies.

The swap makes Trader Joe’s the latest in an ever growing list of employers such as United Parcel Service, Inc. and International Business Machines Corp. cutting benefits, hours and staff to avoid penalties of the 2010 law. The ACA mandates companies that do not provide coverage for employees who put in more than 30 hours a week pay a $2,000-per-person penalty. 

Instead of bolstering job creation, the Affordable Care Act is doing just the opposite. In this recent op-ed, Job Creators Alliance member CEO Robert Luddy called on Washington to clean up this mess. The draconian federal law that was purportedly enacted to fix the problem of rising health care costs, is making things worse for all of us. What kind of a trade-off is that?