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Trader Joe's Drops Health Coverage for Part-Time Employees

By Courtney Coren   |   Wednesday, 11 Sep 2013 02:40 PM

Supermarket chain Trader Joe's will stop offering health insurance to part time employees saying that it will be more cost effective for them to acquire it through Obamacare exchanges.

Trader Joe's CEO Dan Bane sent employees a memo saying the company will give those working under 30-hours-a-week a $500 check to help get them started with the new Affordable Care Act system. The Aug. 30 memo was obtained by The Huffington Post.

Those who work more than 30 hours a week will still be offered the company's health insurance coverage.

Editor's Note: ObamaCare Is About to Strike Are You Prepared?

"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 ACA, many of you should be able to obtain health care coverage at very little if any net cost to you," Bane wrote.

Bane added that part-time status would be determined by averaging the hours employees work over the next three months.

Trader Joe's would neither confirm nor deny the existence of the memo.

"We have made some changes to our healthcare coverage that we believe will be a benefit to all crew members working in our stores," a spokeswoman said in a statement. "We are committed to providing all our crew members with benefits that are among the best in our industry."

Health insurance typically offered by most companies to part-time employees is usually too cost prohibitive to be worth purchasing. However, Trader Joe's is known for making its health insurance affordable to even its part-time employees.

One employee told The Huffington Post that she pays $70 per month for a plan that covers 80 percent of her medical costs with a $500 deductible, and covers prescription drugs.

"There are several folks I work with who are there for the insurance as much as anything, mostly folks with young families," said the employee who requested anonymity. "I can say that when I opened and read the letter yesterday my reaction was pure panic, followed quickly by anger."

A memo that went out to employees in May had said that Trader Joe's had "made a decision to make minimal and only necessary changes to your [healthcare] costs" until the Obamacare regulations were made final.

The move by Trader Joe's to cut employees from its coverage follows moves by IBM to offload retirees from its plans, and UPS, which is cutting employees's spouses.

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