How Will ObamaCare Affect the Trucking Industry?by Jana Ritter - Published: 10/02/2013
Although the Government has literally shutdown over it, the trucking industry's many carrier companies have already been coming to terms with the effects of the new health care law and what they must do to comply, according to the Transport Capital Partners Third Quarter Survey.
As open enrolment under the Affordable Care Act kicked in on Oct. 1, deadlines for businesses are fast approaching and much of the controversy has stemmed from the new law requiring employers to provide health coverage for full-time employees (working 32 or more hours per week). According to the Transport Capital Partners survey, the trucking industry has gradually learned more about this major change through press coverage, health insurers, and new government-sponsored websites.
The survey also revealed that as implementation of the new health law draws near, the number of carriers reporting that the law has made no difference to their business dropped from 36% a year ago to 8% this quarter – meaning that the reality has kicked in for the majority of companies. But unlike the antics of the Senate in Washington, carrier companies have accepted the new changes as “the law” and are taking various steps in order to comply. However, many report their strategies for dealing with the increased costs have shifted.
In November 2011, 43% of carriers indicated they were likely to have employees contribute more toward health costs. Today, carriers are more likely to implement wellness programs (44%) and health savings plans (30%) – certainly much better options for truck drivers employed by these companies. On the other hand, the number of companies who anticipate opting out of the program all together and using independent contractors instead - has grown from 13% two years ago to 24% this quarter.
Another finding is that the trucking industry's response to the new health care law varies dramatically by size of business. Smaller carriers are more likely than larger carriers to consider dropping all coverage (30% vs. 10%). They are also more likely to reduce coverage (12% vs. 4%), and to have their employees contribute more (24% vs. 15%).
This, in part, reflects the fact that small employers - with fewer than 50 employees - have a different set of options under the new law.
”Smaller carriers are at a disadvantage to find and retain drivers if they cannot compete with the health packages offered by larger carriers,” noted Richard Mikes, TCP partner.
Larger carriers are more likely to have employees pay more for family coverage (48% vs. 36%), or to institute a health saving account (35% vs. 21%).