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The Affordable Care Act (ACA), which was signed into law on March 23, 2010, despite many businesses’ hopes that the controversial law would be repealed or revised, will go into effect on January 1, 2014.
“2014 is what everybody has been scared about as that is the full implementation date,” said benefits group manager for AHM Financial Group Tom Goedde, during his presentation to trucking fleet administrators at the 2013 CCJ Spring Symposium in Birmingham, Ala.
Healthcare Coverage
Basically, individuals have to have coverage or pay a penalty, while big businesses – those with 50 or more workers – have to offer healthcare coverage to its employees, according to Commercial Carrier Journal. Small business employers don’t have to offer coverage but if they choose to do so face costs that are higher than current healthcare plans because of market reform and higher taxes.
According to employer-related research on new healthcare policy, around 90% are keeping their plan coverage to retain current workers. Of those employers choosing to discontinue plan coverage, the biggest reason cited, at 86.4%, was that the cost was too high.
“Unfortunately, I think we’re going to find that the Affordable Care Act, as it is called, is not that,” says Goedde. “It is going to add a lot more to business costs.”
Using numbers published by health carrier UnitedHealthcare, Goedde found that individuals, small businesses and big corporations will all face considerable premium increases. Big companies should expect a 20-25% increase, small companies a 25-50% increase, while individuals should see an enormous increase of 116% over pre-reform rates.
Employer Incentives
Depending on the size of your trucking company and the state in which it’s located, you may be able to buy a less expensive small group policy through a standardized insurance exchange. If your company has fewer than 25 employees but you choose to offer insurance anyway, the Affordable Care Act will provide a tax credit to balance the price.
Smaller trucking companies also have more incentive to self-insure, in which the businesses take on the financial risk of offering health benefits to its workers. Rather than paying premiums to insurers, they pay claims filed by workers and health care suppliers. Larger corporations with hundreds of employees or more often self-insure as well because they have the cash on hand to pay the majority of the claims filed right away.
Trucking companies, along with other large businesses will have to offer coverage with essential health benefits to all workers or pay a fine of $2,000 per person after the first 30 employees. “If you have 100 employees and choose not to offer healthcare, you pay a fine of 70 x $2,000, or $140,000,” said Goedde. “The problem is, if you do pay that fine, you’ll probably have to give out raises or gross up some incomes” so employees can buy their own coverage.
