Is Deseret Industries choosing the right by avoiding Obamacare?

A Deseret Industries thrift store in Sacramento.
A Deseret Industries thrift store in Sacramento.

2 updates below

Deseret Industries, a chain of thrift stores throughout the Mountain West that is similar to Goodwill Industries and owned by The Church of Jesus Christ of Latter-day Saints, has started cutting associates’ hours to avoid giving them health coverage mandated by the Patient Protection and Affordable Care Act, The Salt Lake Tribune reports. D.I., as the organization is commonly known, says that doing so—and avoiding the extra cost of providing health coverage—will allow it to serve more people. But is it the right decision?

There are at least three questions we can ask when judging D.I.’s actions.

  1. What are similar organizations, such as Goodwill, doing about Obamacare’s mandate? I did some brief research online to learn how Goodwill is reacting to the insurance mandate and found that information is scarce. The Center for Consumer Information and Insurance Oversight (CCIIO), a federal agency within the Centers for Medicare and Medicaid Services at the Department of Health and Human Services, has a page, last updated 6 January 2012, of organizations that have received waivers of Obamacare’s requirement that insurance plans not impose annual coverage limits below $750,000. One of the files on this page indicates that approximately one dozen Goodwill Industries organizations across the country have received these waivers. And a blog post at Goodwill.org makes reference to the debate over health-insurance reform while calling on Congress to take action to expand job opportunities. Beyond that, no word on what adjustments Goodwill or other social-service thrift stores are making in reaction to Obamacare, but it is fair to judge D.I.’s actions against those of its peers. See update on Goodwill’s actions below
  2. Will cutting costs now end up costing D.I., the Church, or Church members more in the long run? While employment at D.I. is not restricted to members of The Church of Jesus Christ of Latter-day Saints, there is no doubt that many D.I. associates are Mormons. People without health insurance will often avoid receiving—and paying for—medical care until they are forced to. And by “forced to” I mean are involved in a serious accident or have a serious illness—medical treatments that are among the most expensive to administer. In the absence of the negotiated costs worked out between insurers and health-care providers, the uninsured patients are often billed the highest possible cost of their treatments, burdens which can lead to bankruptcy, family instability, and additional economic hardship. Costs, too, that among Mormons are then often requested to be covered by the Church out of welfare funds and fast offerings. So, D.I. avoids health coverage now; will the Church and its members be on the hook later?
  3. Is it right? Then, of course, there is the ethical question in all of this. A basic premise behind health-insurance reform is that a just society will not leave a significant portion of its members vulnerable. All of D.I.’s associates are enduring economic hardship; many of them are immigrants who dealt with political turmoil and persecution in their home countries; and many D.I. associates are dealing with disabilities and other physical and mental limitations. Is D.I.’s action to avoid being required to offer health coverage to these associates leaving vulnerable those it is purporting to help? And, really, it comes down to the classic question of quality versus quantity. Serving as many people as possible is of course important. But is it more important than the quality of the service you give them?

Update, 30 May 2013: The Church of Jesus Christ of Latter-day Saints posted a response to The Salt Lake Tribune‘s report in a blog post at MormonNewsroom.org. The Church states in part: “While Stack does mention that DI seeks to help trainees, ‘learn the skills, including English, to find better employment,’ she doesn’t expound on the fact that DI jobs are meant to be temporary training positions, not full-time, long-term employment. These are job-skills development positions that are intended to help individuals get job training and work experience that can prepare them for better, more permanent positions that lead to self-reliance. Once trainees are accepted into the program, they are assigned a team of professionals who work closely with them to help them achieve their goals. While the trainees provide labor for Deseret Industries, the primary purpose of the program is to provide them with experience and future job placement and to get them into a better job as quickly as possible. The entire program exists to help people.” Read more of the Church’s response »

Update, 3 June 2013: A reader, who wants to remain anonymous, contacted me over the weekend and offered the following information on Goodwill’s actions to avoid Obamacare’s health-coverage mandate (I have not corroborated this information with any other source):

Goodwill industries in Sacramento went from full time labor to part time labor.the change was completed by 12/31/12.many senior employees went from 32-40 hours a week to no more then 28 hours a week. Some as low as 16 hours a week. They lost their sick pay, vacation pay, holiday pay and watched their positions be filled by new hires, volunteers ,or persons required to work to receive cash aide benefits (cal-works /SSI) .

Very few (3) selected employees per store got to maintain their full time status,(one representing each department).those employees have not yet received insurance benefits thru goodwill industries.


Cross-posted at Dialann.org.

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