As the new year rapidly approaches, the Patient Protection and Affordable Care Act (PPACA) – or Obamacare as it is often referred – is becoming a reality that all fleet owners must soon embrace. Yet, this new healthcare law is still leaving many smaller fleet companies unsure how the new mandate will affect their business.
The PPACA was signed into law by President Barack Obama in March of 2010, and goes into full effect January 1, 2014, but an overwhelming majority of people are still completely uncertain how the changes will affect their business.
Obamacare Brief Recap
The intricate details of the PPACA are complicated to explain, but here are the main details:
- PPACA was signed into law to reduce overall cost of healthcare by increasing the rate of health insurance coverage for Americans.
- The new law provides subsidies and tax credits to employers and individuals so they are able to escalate their coverage rate.
- The PPACA requires all insurance companies to cover individuals and provide the same rates for service regardless of pre-existing conditions.
- Beginning on October 1st, all individuals will be able to start their enrollment process by buying insurance through “exchanges” that are run by either individual states or through the federal government, which are aimed to offset costs through reimbursement.
Increased Health Insurance Costs for Fleet Owners
So what should fleet owners do? The new law makes it so that all individuals must have health insurance or are faced with a fine. This means that each of your employees must have health insurance, regardless of whether you provide it or they obtain it on their own.
Larger fleets (50 or more employees) must offer healthcare coverage to its employees, while smaller companies are not required to offer any coverage. However, if smaller companies do choose to offer healthcare, it will likely be at a higher rate because of the oncoming market reform and higher taxes.
This immediate rise in healthcare costs more than likely means that employees will be actively looking for companies that provide health insurance. Since everyone will be required to have an insurance plan, drivers will be looking for ways to save on the costs. So a fleet owner who offers health insurance as a benefit has a greater chance of retaining his or her drivers.
Unfortunately for small business fleet owners, the rise in costs mean it will not be an easy task to offer health insurance.
How Fleet Owners Can Offset Long-Term Costs
The bottom line is that the health insurance offered by a small business will result in healthier employees. The immediate cost of providing this may be more than ideal, but it will pay off in the long run.
By providing health insurance and implementing a better employee wellness program (discounts on gym memberships, encouraging better eating habits, stress management, etc.), your business will have much happier and healthier people. This means your employees will be more productive, miss less work time, and ultimately will cost less to insure.
Whether the increased cost of the first year of Obamacare will pay off in the forthcoming years has yet to be seen. But it’s important that you’re ready for the new changes, and have a plan for the future.