The costs of good health
According to estimates from the Agency for Healthcare Research and Quality’s Medical Expenditure Panel Survey, average yearly health-insurance-premium cost per family buying directly in 2002 was $4,442. For employer-provided insurance in the transport sector, the average premium cost (split between employer and employee in most cases these days) rose from $3,223 in 2002 to $4,015 in 2005. If the same 25 percent rate of increase applies to the individual policy market through 2008, average family buyers will be looking at $463 a month in premiums this year. Whether you’re an owner-operator or company driver whose carrier doesn’t offer insurance, reducing that number raises your personal bottom line. Getting healthy’s your best bet toward that goal, but quality, affordable insurance can help.
Knowing your options
The Shooks’ and the Cummings’ health-insurance solutions only begin to scratch the surface of the many routes to coverage. Some may be right under your nose, as many carriers are diversifying their health-plan options in an attempt to reduce costs while tailoring plans to drivers’ individual needs. In a cafeteria plan like Schneider National’s TrueChoices, drivers and owner-operators can pick and choose coverages – for instance, a single male driver in his 20s may choose to opt out of cancer coverage to save on the premium. Companies like Dart and Greatwide, in turn, offer multiple plan selections, and levels of coverage and investment can be considered before signing up.
If your fleet doesn’t offer insurance or if it’s just too costly, options abound. In addition to Medicare for the over-65s and Medicaid for low-income families, some states subsidize part of the cost of private insurance for citizens with pre-existing conditions or in other circumstances that make finding affordable insurance impossible.
MinnesotaCare is one such state insurance program. Brainerd, Minn.-based driver Glenn Wolf changed carriers a little over a year ago, losing group coverage for himself and his wife, both of whom had chronic medical conditions in need of regular treatment. “We just kept our fingers crossed against something major,” Wolf says, “and paid for small things out of pocket.”
But after the six-month waiting period at his new carrier was up and Wolf made moves to enroll in it, he found out the carrier’s self-funded plan would come at a $575 monthly cost. That’s when Wolf checked out MinnesotaCare, where he could get the equivalent of a quality group plan for $475 a month, he says. Contact your state’s health department to see if it has a similar program.
And if you have young children, your state’s Children’s Health Insurance Program may be an option for their coverage, depending on your income. SCHIP plans, as they’ve been called in the news media of late in coverage of the legislative and executive wrangling over budget appropriations, are meant to help families who make too much to qualify for Medicaid but who have no access to quality health insurance through their employers.
Ultimately Glenn Wolf went the route of many an owner-operator and joined his working spouse’s group plan at a monthly premium less than what he’d have paid into his own company’s plan.
One way toward quality comprehensive group coverage for owner-operators, and drivers in certain cases, is to join an association that offers participation in a health plan to its members. Local chambers of commerce often have small-business benefit programs, and some national outfits, like the National Association for the Self-Employed, offer health plans to their members.
One such trucking outfit to do so is the Owner-Operator Independent Drivers Association, whose Advantage plan is available to new members with no pre-existing limitations as long as they sign up within the first 60 days of membership. It pays specified amounts for certain services regardless of provider. Visit ooida.com, click “Benefits,” for information.
Many state and regional trucking associations partner with insurance carriers to offer group rates to members as well. The Mid-West Truckers Association (midwesttruckers.com) partners with the Associated General Contractors of America in the AGC Health Plan
(agchealthplan.com), which among other benefits offers the service of Health Reimbursement Arrangement administration. HRAs are a novel utilization of spousal insurance for the self-employed. Section 105 of the IRS code allows for a sole proprietor owner-operator who can establish an employer-employee relationship with his or her spouse, whether as team-drivers or not, to provide a medical plan to the spouse and set up an HRA spending account from which to pay medical bills for both people. All health costs can then be noted on Schedule C as a business deduction rather than as line items on your 1040, saving on self-employment, federal and state taxes. HRA administration involves a great deal of paperwork, but in addition to AGC there are a plethora of service providers out there to help. Total Administrative Services Corporation’s BizPlan service (tasconline.com) is available for $195 a year, and HSA for America (HSAforAmerica.com) offers a similar service.
An owner-operator whose business is a C Corporation can provide his or her own medical benefit and reimburse expenses from an HRA.
Otherwise, drivers on the individual policy market have decisions to make. The ideal health plan might have low copays for doctor visits, a low deductible, and low or no coinsurance (the percentage of your medical expenses you’ll pay out of pocket after the deductible is met). But premiums for a plan of this type can exceed $1,000 a month easily for a family. On the other hand, if you’re young and in relatively good health, a high-deductible plan can have a premium as low as $70. Even 25-year-olds have accidents, after all, and high-deductible insurance can save you from being saddled with a massive surgery bill.