Several Wegmans employees say the grocery chain is cutting health insurance benefits for its part-time employees, as a result of provisions in the Affordable Care Act.
Wegmans has previously been applauded for its health benefits, and has consistently made the list of Fortune magazine's list of the top companies to work for. Wegmans has been praised for voluntarily offering health insurance to part-time employees, The Buffalo News reported. By law, an employer is obligated to offer health insurance only to full-time employees who work 30 or more hours each week, or 130 hours each month.
Many Wegmans employees said the change in eligibility requirements was related to the Affordable Care Act, a controversial 2010 health care overhaul dubbed "Obamacare" that requires employers to provide "affordable" health insurance if they have more than 50 full-time workers. If they don't they could face thousands of dollars in hefty penalty fees, though the implementation of this provision was recently postponed until the end of 2015.
Still, Wegmans told WHAM that while it could not go into detail about it, the benefits are not being cut.
"As a private company, we don't share specifics of our employee benefits programs," the company said in a statement, according to The Buffalo News. "It's a given that health care reform will result in some changes to our benefits program, but it will not change our commitment to meeting the needs of our employees."
But part-time employees may benefit from the change because they are not eligible for health care insurance subsidies under the Affordable Care Act if they receive insurance from their employers, The Buffalo News reported.
Brian Murphy, a partner at an insurance brokerage firm in Buffalo, told The Buffalo News that subsidized health insurance can have a lower out-of-pocket cost for the employee.
"It's a win-win. The employee gets subsidized coverage, and the employer gets to lower costs," Murphy told The Buffalo News.
Because part-time employees' hours are included in the calculation of full-time equivalents, some companies may also cut part-time hours or increase their hiring of temporary employees as a way to evade the benefit payments.
Wal-Mart, for example, increased its number of temporary staff to 10 percent of its employees this year, according to a recent Reuters survey of 52 Wal-Mart stores. Previously, temporary staff at Wal-Mart accounted for 1 percent to 2 percent.
But Wal-Mart spokesman David Tovar said the increase in temporary workers is a way for the company to ensure it is "staffed appropriately" during busy nights and weekends, without having to hire full-time workers, Reuters reported.