One of the main arguments to the ACA was that it would be a “job killer” as employers would lay off workers to meet the new, rising healthcare costs. However, as it turned out, Obamacare did not cut jobs, it only gave employees an option to move out of jobs that did not fit their lives anymore, and were only staying at due to associated health benefits.
Obamacare gave them a chance to find affordable health insurance without the bonds of employment. Trader Joe’s, a large-scale grocery chain, followed the very path where employees finally decoupled health benefits with employment and figured they did not need the job. By opting to cancel health benefits for part time employees, Trader Joe’s made a grave mistake that increased their attrition rate tremendously. Let’s explore this case study further.
Changes Affected by Trader Joe’s in Health Coverage Strategy
Traditionally, Trader Joe’s has offered quality health insurance coverage to all employees. For the grocery industry, their health insurance reimbursement was on the generous side; with people averaging 18 working hours a week getting qualified health insurance by the employer. Further, the company had been providing better health insurance to part time workers, who average roughly $21,400 in annual income.
However, post Obamacare, the situation was drastically different than before. Trader Joe’s decided to raise the bar requiring at least a 30 hour work week to qualify for health insurance, and if workers were below that, they would have to purchase health insurance from the health insurance exchanges. Naturally for most employees, this was an unexpected blow. To soften the impact, the company offered $500 to every part-time employee as reimbursement to Help them purchase health insurance off the exchanges.
Impact of the Insurance Limits Set by Trader Joe’s
The response from employees ranged from outrage to heartbreak, with many finally deciding to leave the company. Some employees proclaimed that they had been sticking to the organization for the health benefits provided, the very same deadlock Obamacare has been aiming to break. Some workers who tried the exchanges were shocked as their combined family income resulted in higher quotes and made affordability a challenge for them. In such cases, they were hard pressed to find the best outcome of this situation.
However for some, this move turned out to be pretty advantageous, as they got a chance at better health insurance through the marketplaces. One worker explained that earlier, they were paying $70 per month for health insurance under Trader Joe’s group plan. For the same health coverage, with the only exception being lack of vision and dental coverage, she is only required to pay $27 per month on the exchanges as the available subsidies cover all her costs and give her better insurance at subsidized rates. For people who got better health insurance at subsidized rates through ACA exchanges, the situation turned out to be a blessing in disguise.
Role of ACA in Trader Joe’s Health Insurance Changes
While higher insurance costs for employers could be the reason to blame, ACA is actually realigning some aspects of the health insurance system to improve the state of reform in the country. The case of Trader Joe’s is a classic job-lock breakdown assisted by Obamacare. The presence of the exchanges helped workers to mitigate the loss of coverage and soften their landing. Many employees who had been looking to move out of the organization finally moved out as they were no more limited by the health benefits available only through their employment.
In the coming years, as more organizations effect such changes, ACA is bound to be the motivation for employees that want to move out of employment that doesn’t fit their life path anymore.