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Trader Joes Essay

1949 words - 8 pages

Trader Joe’s

Trader Joe’s who’s grocery store chain has been known for its affordable prices, unique food and friendly staff continues to be ranked as one of the most ethical companies in the U.S. Due to recent changes in our governments healthcare system, there was a moment in 2013 that the company faced a dilemma that involved deciding whether or not to change their part-time employees health benefits. For years, Trader Joe’s has offered healthcare coverage to its part-time employees at reasonable prices while paying their part-time staff very generously compared to other grocery chains. On August 30th 2013, Trader Joe’s CEO, Dan Bane sent employees a confidential memo stating that ...view middle of the document...

(Huffington Post) Bane stated in his letter how he realized even before he began writing his letter that employees would become quickly upset with him and possibly lose hope in him and question how he ran the business. Hoping to soften the blow, Bane promised that he would “cut part-timers a check for $500 in January and help guide them toward finding a new plan under the Affordable Care Act. Many articles began to make jokes regarding the $500 offer. After reading only negative headlines, Bane and Trader Joe’s executive management staff replied to employees and also reporters. In another letter later sent to employees and reporters to clarify the situation and Trader Joe’s executive management team decision, the letter stated;
“Thank you all for writing to us or expressing your concerns in person. It's possible you have been misled, at least to some degree, by the headlines in some articles regarding our reasons for implementing the [Affordable Care Act] in January. We'd like to take this opportunity to clarify some facts.
For over 77% of our Crew Members there is absolutely no change to their healthcare coverage provided by Trader Joe's.
The ACA brings a new potential player into the arena for the acquisition of health care. Stated quite simply, the law is centered on providing low cost options to people who do not make a lot of money. Somewhat by definition, the law provides those people a pretty good deal for insurance ... a deal that can't be matched by us -- or any company. However, an individual employee (we call them Crew Member) is only able to receive the tax credit from the exchanges under the act if we do not offer them insurance under our company plan.
Perhaps an example will help. A Crew Member called in the other day and was quite unhappy that she was being dropped from our coverage unless she worked more hours. She is a single mom with one child who makes $18 per hour and works about 25 hours per week. We ran the numbers for her. She currently pays $166.50 per month for her coverage with Trader Joe's. Because of the tax credits under the ACA she can go to an exchange and purchase insurance that is almost identical to our plan for $69.59 per month. Accordingly, by going to the exchange she will save $1,175 each year ... and that is before counting the $500 we will give her in January.
While we understand her fear of change, at her income level this is a big benefit that we will help her achieve.
Clearly, there are others who will go to the exchanges and will be required to pay more. That is usually because they have other income and typically a spouse who had a job with no benefits and they do not qualify for the subsidies under the ACA.
One example of that we had yesterday was the male Crew Member who worked an average of 20 hours per week but had a spouse who is a contract consultant who makes more than $200,000 per year. The Crew Member worked for the medical benefits and unfortunately for them they...

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