Starbucks won't cut worker benefits ahead of Obamacare: CEO

NEW YORK Mon Aug 26, 2013 4:36pm EDT

Howard Schultz CEO of Starbucks poses during an interview with Reuters in Shanghai April 19, 2012. REUTERS/Carlos Barria

Howard Schultz CEO of Starbucks poses during an interview with Reuters in Shanghai April 19, 2012.

Credit: Reuters/Carlos Barria

NEW YORK (Reuters) - Starbucks Coffee Co (SBUX.O) will not follow the lead of other companies that are cutting health insurance benefits or reducing hours for employees in anticipation of the U.S. Affordable Care Act, the coffee shop chain's CEO Howard Schultz told Reuters on Monday.

"Other companies have announced that they won't provide coverage for spouses; others are lobbying for the cut-off to be at 40 hours. But Starbucks will continue maintaining benefits for partners and won't use the new law as excuse to cut benefits or lower benefits for its workers," Schultz said in a telephone interview.

The 2010 healthcare reform law, often called Obamacare, requires companies with more than 50 employees to offer health insurance for employees who work 30 hours a week or more. Starbucks currently provides healthcare to part-timers who work 20 hours a week or more.

Last week, United Parcel Service Inc (UPS.N) told non-union employees that their spouses would no longer qualify for company-sponsored health insurance if they could get coverage through their own jobs.

According to a survey released in March by consultant Towers Watson (TW.N) and the National Business Group on Health, 4 percent of large employers excluded spouses from their health plan in 2013 if they could buy coverage where they work, and 8 percent more planned to do so for 2014.

Last week, Reuters reported that some businesses are keeping staffing numbers below 50 or cutting the work week to less than 30 hours to avoid providing employee health insurance.

(Reporting By Atossa Araxia Abrahamian; Editing by David Gregorio)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
investprop wrote:
..and that is why i will shop at Starbucks if I have a choice of where I can buy my tea. Giving back to responsible CEOs who understand that having a healthy worker means bigger profits in the long run, something that bean-counters do not understand and never will.
Congratulations Mr. Schultz. You truly are a CEO that gets it.

Aug 27, 2013 4:56pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.