Insurance services group urges preparation for health reform
Trucking industry preparation for the Affordable (health) Care Act appears similar to the industry view of the Compliance Safety Accountability program in 2008, TrueNorth Companies representatives said Sept. 13.
Some companies took the following two years to prepare for the enforcement program that was due to begin in late 2010, while others didn’t act and found shipper contracts falling away due to bad rankings in the Safety Measurement System.
TrueNorth urged companies to take a proactive approach to the health-care changes now to avoid being taken by surprise by new requirements and penalties in the future. Even so, potential changes to the law during implementation are likely.
In addition, uncertainty remains about the legality of the individual mandate to buy health insurance in 2014. “There are 26 lawsuits in the judicial system right now” challenging the mandate, said TrueNorth Account Manager Bob Mreen. “Ultimately the fate of the mandate will be decided by the Supreme Court.”
Mreen said such a decision may come down during the 2012 national election. “Personally, I think it’s going to be a bellwether issue, depending on the timing of the Supreme Court decision. Stay tuned, and stay abreast of the changes as they occur,” he said.
For companies utilizing independent contractors, TrueNorth stressed the need for insurers and carriers to talk with contractors about health insurance changes and options. Some points to consider:
1) In effect since the 2010 tax year is a small business tax credit available to employers with fewer than 25 full-time employees, exclusive of company owners and family members. If the employer, whether a small fleet running under its own authority or leased to a larger carrier, contributes at least 50 percent to its employees’ health insurance premiums, it can deduct a growing percentage of premium costs from its federal income taxes.
2) Nationally, the Pre-Existing Condition Insurance Plan is in place, offering individuals who’ve been without insurance for six months or more and who’ve been denied insurance due to a pre-existing condition access to a relatively affordable plan. Participation in the plan since its introduction a year ago has been low, TrueNorth said, with only 25,000 individuals enrolled of a total 375,000 projected in the legislation. Visit pcip.gov for information.
Other changes already in effect include an increase of dependent eligibility age to 26 years, regardless of marital status and bans on lifetime limits to “essential” benefits that have yet to be defined. Additional changes are a restriction of annual dollar limits for particular procedures, and pre-existing condition exclusion for children under age 19.
Many more changes will probably come, including some of interest for owner-operators, small fleets and/or their contracting fleets.
Beginning January 2013, employers with 250 or more employees will be required to report the value of health insurance benefits on employee W2s. Increased federal regulation of employer-provided plans by 2013 will include requirements of uniform explanation of coverage to all employees. Plans also will have to notify employees of the existence of state health insurance exchanges to buy individual insurance, and of a 60-day-or-longer reporting requirement of any benefits changes.
Also in 2013, a new maximum of $2,500 will apply to any individual pretax Flexible Spending Account, and penalties for misuse of Health Savings Account funds will increase.
2014 is the “big year,” TrueNorth said, when state insurance exchanges must be in place. That year is also when the individual mandate goes into effect. Penalties for individuals not having a health-insurance policy will be assessed at tax time, and amount to 1 percent of adjusted gross income in 2014, 2 percent in 2015 and 2.5 percent in 2016.
TrueNorth Account Executive Peter Berg noted three options for a typical 50-year-old, nonsmoking owner-operator currently without insurance, with an adjusted gross income of $50,000 and faced with buying insurance when the individual mandate begins. The operator’s monthly penalty costs will be $42 in 2014, $83 in 2015, and $105 in 2016 if he does nothing.
For limited, high-deductible health insurance, the operator will pay between $119 and $233 a month. If the individual has to buy into the Pre-Existing Condition Insurance Plan between now and then, the cost will be about $214 to $559 monthly.
Cost is a major question of whether the state health insurance exchanges actually will deliver on their promise of injecting greater competition in the health-insurance system, Berg added.