Starbucks raises health insurance premiums, sparking worker tension

Rising costs for health insurance premiums offered to Starbucks workers are sparking tension.

With the fiscal year set to kick off for the Seattle-based coffee giant next month, benefits enrollment recently opened, and some workers have been caught off guard with nearly double the price tag for health insurance and lower share of employer contribution to the cost.

Starbucks told The Seattle Times that some workers experienced larger premium increases," though the majority "saw more modest changes." Both corporate and retail employees have noticed the adjustments.

The increase shift rattled a number of workers because Starbucks has built a reputation around providing gold-standard benefits at reasonable price points.

“The company is dramatically raising the workers’ share of the monthly cost for premiums, even doubling that cost in some cases, pricing even more baristas out of the healthcare we need," Jasmine Leli, Starbucks barista and union bargaining delegate from Buffalo, N.Y., said in a statement.

A remote corporate worker, who asked to remain anonymous to protect her job, told The Times that she had to switch plans to accommodate the price difference.

Last year, Starbucks covered 85% of her healthcare premium, she said, so she paid about $25 per weekly paycheck. This time around, for the same plan, the amount more than doubled to about $55 per weekly paycheck.

The employee said she decided to go with a cheaper option. Starbucks will subsidize 81% of the new healthcare premium, and she'll pay an extra $10 per weekly paycheck.

Starbucks defended its latest decision by pointing to climbing healthcare costs for American employers. Aon, a professional services firm, predicted a hike of almost 10% to be shelled out by employers next year, with the average cost per worker expected to exceed $19,000 each.

"We continue to face rising healthcare costs while remaining committed to providing quality, affordable healthcare coverage for full-time and part-time partners at Starbucks, beginning at just 20 hours per week," Starbucks spokesperson Betsy McManus said in a statement.

The company offers over 25 healthcare plan options through several carriers, Starbucks said, and costs fluctuate based on choice of carrier, plan design, geography and more.

Starbucks added that it still covers most premium costs.

Starbucks Workers United, the union that represents thousands of baristas, confirmed it's heard "the company changed the percentage they are paying and forcing workers to pay up to twice as much of their co-premium," it said in a statement.

Workers United sent a request for further information to Starbucks last month. The union hadn't heard back as of Tuesday.

"Starbucks should not be able to make life-altering decisions about our benefits while the baristas who make its profits possible struggle to get by, Leli said.

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