Facing ObamaCare, Supermarket Chain Drops Part-Timers' Health Coverage

By:  Michael Tennant
07/15/2013
       
Facing ObamaCare, Supermarket Chain Drops Part-Timers' Health Coverage

Facing increased health insurance costs under ObamaCare and its employer mandate, the Wegmans supermarket chain announced that it will no longer offer health coverage to many of its part-time employees.

Thousands of part-time employees of the Wegmans supermarket chain have ObamaCare to thank for the impending loss of their health insurance. The company recently informed its employees that beginning in 2015 — the year in which ObamaCare’s employer mandate is now scheduled to take effect — only those employees working at least 30 hours per week will be eligible for employer-sponsored health insurance.

That is a significant change for the Rochester, New York-based chain. Currently Wegmans offers health insurance to employees working as few as 20 hours a week, a policy that has earned the company plaudits from numerous media outlets.

The Affordable Care Act (ACA), however, makes that policy unaffordable. The law mandates that employers offer health coverage to all employees working 30 or more hours per week — the new definition of “full-time.” In addition, the coverage offered must include a wide variety of benefits (including the controversial contraceptive coverage), which drives the cost up. Most of that increased cost must be absorbed by the employer since the law requires coverage to be affordable for employees, with “affordable” defined as no more than 9.5 percent of an employee’s total household income. Should an employee opt out of employer-sponsored coverage because it is “unaffordable” for him and instead buy subsidized insurance on an exchange, his employer will be assessed a tax penalty of at least $2,000.

Thus, under ObamaCare, Wegmans will be forced to offer increasingly expensive health coverage to all its full-timers plus its part-timers putting in at least 30 hours a week, and the company will have to pay most of the increased cost. That will surely be costly: The family-owned company has 81 stores in six states and “employs roughly 1,433 full-time employees and 4,304 part-time employees in the Buffalo Niagara region” alone, according to the Buffalo News. All that extra expense will make it difficult, if not impossible, for the company to continue to offer coverage to its remaining part-timers, so it is terminating that benefit.

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