A Seattle Times article describes a change in Trader Joe’s health insurance benefit policies. Trader Joe’s has decided to stop offering health insurance benefits to its part-time employees, those working less than 30 hours a week. Instead, Trader Joe’s will provide its part-time employees with $500 to help cover the employee’s costs for an insurance plan found in the new insurance marketplace. Trader Joe’s argues that by not offering part-time employee health insurance benefits, those employees will be eligible under the Affordable Care Act, or Obamacare, for lower cost insurance plans provided in the new public insurance marketplace. The company believes that between the government tax credits and the $500 it will give its part-time employees the overall cost of a comparable insurance plan will be less than what the employee currently pays for Trader Joe’s benefits. This change in policy will not affect the majority of Trader Joe’s employees. However, affected employees can see their expected insurance costs using an online benefit cost calculator.
Affordable Care Act
The Affordable Care Act was created to make health insurance more accessible and affordable and to bring down overall medical costs. The law prevents insurance companies from denying coverage for pre-existing conditions in children, from arbitrarily cancelling coverage, and from charging for preventative care. Insurance companies can no longer set lifetime limits on coverage, which is good for those with chronic or severe illnesses. Additionally, the law intends to create an insurance marketplace where individuals can shop for insurance plans that best suit their needs and budgets. The marketplace is expected make insurance companies reduce premiums to stay competitive in the market. The act allows for tax credits or subsidies for low-income individuals so they can both afford coverage and avoid being penalized for not having insurance. Insurance companies and individuals are not the only one affected under the laws, certain employers will have to make some changes as well.
Employer Health Insurance Benefits in Washington State
Washington State law provides state employees working 20-30 hours a week with health insurance benefits; however in light of the new insurance marketplace, Washington is still deciding what it is going to do about its part-time employees health insurance benefits. On the other hand, private employers in Washington are not required to provide health insurance benefits to any employee. Once the Affordable Care Act goes into effect, any private employer in the United States with 50 or more employees will either have to provide health insurance benefits for its full-time employees or face a penalty. Even under the new laws, employers will not be required by federal law to offer health insurance benefits to part-time employees.
If you have questions or concerns about employee benefits, an employment law attorney can be of assistance.