Late last year, Melissa O'Rourke found out that her employer, Trader Joe's, would no longer be offering health care coverage to part-time workers like herself. As of 2014, O'Rourke would have to find her own insurance plan under the Affordable Care Act, better known as Obamacare.
The company's widely discussed policy change, first reported by The Huffington Post, prompted a bit of soul-searching on O'Rourke's part. She had spent about nine years working for the grocer -- several years longer than she'd anticipated when she first came on. A change seemed long overdue.
By the end of January, O'Rourke had enrolled in Obamacare and left the Trader Joe's crew.
"Honestly, the health insurance was one of the the few things keeping me there," O'Rourke, 37, said.
For decades, health coverage in the U.S. has been closely linked to employment. The vast majority of Americans have received health coverage through their jobs and will continue to do so in the Obamacare era. But they no longer have to.
The idea was central to the president's sweeping health care reform law: By "decoupling" insurance coverage from employment, you give people more control over their careers and their lives. That could mean switching jobs, working fewer hours or perhaps not working at all. (The latter two choices, laid out in projections by the Congressional Budget Office last year, were widely mischaracterized by Republicans as job losses expected under Obamacare.)
"We've talked for years about 'job lock' -- staying in jobs just to keep the benefits," said Paul Fronstin, a researcher at the Employee Benefit Research Institute, a nonprofit that examines the role of workplace benefits in the economy. "The Affordable Care Act completely changes the playing field. You don't need your employer anymore for health benefits. You can go to an exchange and get coverage without worrying about a pre-existing condition."
In O'Rourke's case, the new coverage has given her the chance to become a full-time labor organizer. She's wrapping up her undergraduate degree in labor studies and plans to help launch a worker center in Indianapolis. She said she probably would have left Trader Joe's earlier, but persistent health issues made the idea of forgoing coverage unimaginable.
Thanks to a subsidy, the monthly premium for O'Rourke's new plan under Obamacare comes to less than $27. Under her group plan at Trader Joe's, she said, she paid around $70 a month for comparable coverage.
"It's quite a bit less, and the coverage as far as I can tell is pretty similar," said O'Rourke. The one clear distinction is that her new plan doesn't include vision and dental.
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It's rare for a retail company to offer part-time workers decent and affordable health coverage. Outside of exceptions like Trader Joe's, most such employees would have qualified only for limited plans that capped their available benefits -- the so-called "mini-med" plans common in lower-wage food and retail jobs. If they opted in, workers would pay relatively high prices for generally poor coverage. (The Affordable Care Act banned many such plans.) With a median salary of $21,400 in the industry, most part-time retail workers get by on meager earnings to begin with.
Bryce Williams, managing director at the human resources consultancy Towers Watson, said many part-time retail employees are seeing coverage for the first time in years. His firm has consulted for companies to help part-timers navigate the exchanges and find "the best bang for the buck" under Obamacare, he said.
"In most cases, whatever an employer did or didn't do, these exchange-based plans will be a better deal than what these employees had available to them," Williams said. "Many of these part-time workers have never qualified for group coverage before."
Trader Joe's' coverage of any worker who averaged at least 18 hours a week was unusually generous for the grocer's field. After HuffPost reported that the company would steer workers toward the Obamacare exchanges if they averaged fewer than 30 hours, about two dozen employees emailed HuffPost about the change. They were almost uniformly infuriated. Many said they had remained at the company in large part because of the insurance.
For some, that anger has started to fade.
One worker, who requested anonymity because she still works for Trader Joe's, emailed HuffPost in September to say she was filled with "fear and confusion and HEARTBREAK" after getting the company's memo explaining the change. Initially unable to secure a plan under Obamacare, she ended up taking out a loan to purchase a semester's worth of health coverage at the art school where she's enrolled part-time.
But come March, she was approved for Medicaid under the program's expansion to low-income adults in New York state. Although she spent several thousand dollars for insurance for the first half of this year, she's now receiving free coverage. She continues to work three days a week at Trader Joe's. In a more recent interview, she called the company's move "a very poor decision" but said she believes it's still a good job.
"It shook my trust in them a little bit," she said. "The only reason I stayed is it's such a flexible job and the pay is still really good for retail. I can't knock that at all. That's why I stuck around. But there are others who had no reason to stay."
Like O'Rourke, this worker says she knew colleagues who bolted from Trader Joe's once company coverage was dropped for part-timers, saying "the health care was what was keeping them there."
Most of the Trader Joe's workforce is employed full-time, so it's hard to say how significant the turnover may have been due to the policy change, or what kind of training costs it came with. The company -- known for its reticence, and perhaps wary of wading into any story involving Obamacare -- declined to answer questions for this article.
In his original memo to workers last August, Trader Joe's CEO Dan Bane said the company believed most part-timers would be better off financially on the exchanges than on company-sponsored coverage. To soften the landing, the company offered qualifying workers a flat payment of $500 to help buy new insurance. (Many workers complained to HuffPost that those payments were taxed at the rate of a bonus, making them less ample than they seemed.)
"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 in the memo.
Gary Claxton, vice president at the Kaiser Family Foundation, a nonprofit that focuses on health policy research, said the exchanges should offer most of those part-time workers a better deal, unless they happen to have high income and don't qualify for a nice subsidy. The new tax incentive to be taken advantage of would make it a "win-win" in many situations for both the employer and the worker, he said.
"I don't think they would have done it if they didn't think it would help them with their workforce," Claxton said of Trader Joe's. "They didn't do it to save just a little money. They did it because they thought it would give them a better place in the labor market."
Of course, not everyone wins. O'Rourke said she knew colleagues whose quotes on the exchange weren't nearly as attractive as their Trader Joe's company plans, owing to other family income.
Seeing as it came on the heels of a cut in contributions to workers' retirement accounts, O'Rourke said she feels the company dropped coverage for part-timers to help itself more than its employees. She noted that many workers had to scramble to meet Trader Joe's 30-hour-a-week threshold for full-time work, thereby guaranteeing they could keep their company health plans. Some who'd hoped to clear that bar at the end of last year didn't make it.
"I definitely think they did use it as an excuse, and it's benefiting their bottom line much more than workers'," she said.
Some workers may be paying more for their insurance under Obamacare but enjoying new opportunities at the same time. Edan Lichtenstein, 36, decided to leave his Trader Joe's store in Washington, D.C., shortly after the company dropped part-timers from its plans. The plan he got on the exchange runs about $260 a month, and he didn't qualify for much of a subsidy due to his freelance income last year.
Even though he's now paying more for coverage, Lichtenstein said his career is headed in a more appropriate direction. With a bachelor's degree, he'd never intended to work on the floor at Trader Joe's for the four years that he did. He "would have taken more risks, but there was the health insurance issue," he said.
After he left Trader Joe's, he took a three-month course in writing code and building apps. He's now working part-time at a startup and looking for a full-time job where he can use more of his education. Obamacare provided him with an opening to leave retail, and he's grateful for it.
"I felt I was lucky," Lichtenstein said of quitting Trader Joe's. "It wasn't the end of the world for me. I didn't have kids and stuff. There were people there without the leverage or who weren't as lucky as I am, and they needed that job a lot more than I did."