December 26, 2013 in Business

Sodexo cutting health care benefits by reclassifying workers

By The Spokesman-Review
 
By the numbers

Sodexo’s full-time area employees:

188 now, 111 in January.

Sodexo’s part-time area employees:

83 now, 144 in January.

Citing the federal Affordable Care Act, national food-service provider Sodexo is cutting health care benefits for more than 30 of its Spokane-area workers.

The national company, which has more than 120,000 workers nationwide at hospitals, colleges, military bases, clinics, nursing facilities and other locations, has roughly 270 workers in Spokane.

Sodexo’s changes are part of a national reaction by large and small companies to the new federal law. The Affordable Care Act lets companies redefine which workers receive medical insurance, a costly benefit that it can now reduce by shifting workers to newly created private health plans.

Most of the Sodexo employees affected are in food service at Gonzaga and Whitworth universities and at the two Spokane community colleges.

As the law’s main regulations on businesses take effect in January, the company said its Spokane ratio of full- and part-time workers will change under a new system of classification.

Sodexo’s full-time workers here will drop from 188 to 111, company spokesman Enrico Dinges said.

The company is not reducing work hours for those workers, Dinges said. All 77 in effect are being redefined as part-time employees.

Because the company offers benefits including medical coverage only to full-timers, some of those workers will be forced to find a health insurance alternative.

Not all of those workers used the company health plan, Dinges said. He said he’s been told that 33 current full-time workers will lose the company-provided health plan.

The former full-time workers will also lose other benefits, including eight paid holidays, five vacation days (more if employed more than five years) and up to 10 days of sick leave.

The changes follow Sodexo’s announcement earlier this year that it was redefining workers based on standards in the Affordable Care Act.

That law says full-time workers are those who work at least 30 hours per week on average over 52 weeks. Companies with 50 or more workers must provide health care to their full-time workers or face a fine, the law states.

The law does not require a company to eliminate benefits for workers who become part-timers.

Until January 2014, Sodexo said a full-time worker was one who worked 30 or more hours per week over a six-week period.

Because college workers often take breaks for vacations and summers, many Sodexo workers will not meet the law’s full-time standard over the course of a year.

Dinges said the company wouldn’t disclose its average cost for full-time workers’ health insurance.

For workers losing full-time status, the company plans to provide assistance in finding medical coverage, he said.

That will include having managers assist workers in making applications for insurance through the Washington state health exchange.

Generally, about 15 percent of Sodexo’s U.S. workers belong to unions, Dinges said. Those in Spokane are not affiliated with a union.

Earlier this year, the Sodexo shift on benefits led to heated debate at the University of Vermont, where the company has more than 200 full-time workers. Facing loud criticism by school administrators and students, Sodexo officials agreed to delay the change pending a review by the state insurance commissioner.

That review is ongoing, according to a university spokesman.

Philip Baruth, a University of Vermont professor and state legislator, said Sodexo officials have conceded to university administrators that the change is less about compliance with the law and more about “remaining competitive” in the marketplace.

Gonzaga spokeswoman Mary Joan Hahn said in an email, “We believe that (Sodexo) has endeavored to provide a thoughtful and personal approach in navigating the changes to health care and other benefits coverage with the employees impacted.”

Dinges also said Sodexo will compensate workers who lose vacations and sick days by giving them an “equivalent increase in pay to compensate.”

Dinges declined to give details on what that compensation would come to, saying it’s based on “accrued days multiplied by their daily pay rate … and divided across each pay period.”

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