Overdrive

March 2015

Overdrive Magazine | Trucking Business News & Owner Operator Info

Issue link: http://read.dmtmag.com/i/472327

Contents of this Issue

Navigation

Page 30 of 99

March 2015 | Overdrive | 29 (with a maximum $285 for a family), or 1 percent of total family income, which- ever is greater. There's the rub, says Todd Amen, president of owner-operator business-services firm ATBS. "As a general rule, our clients are more reactionary to all the rules and regs of the ACA than proactive," Amen says. Many weigh the difference between the cost of health-insurance coverage and the cost of not complying, determining that so far it makes sense not to comply. The average ATBS owner-operator client earned about $56,000 in 2014, with deductions bringing adjusted income down to "the low $40,000s," Amen says. For most, penalties will be calculated at 1 percent of modified adjusted gross income "rather than the minimum penalty." Granted, that $400-plus is a lot less than what those operators would have paid for health insurance over the course of last year. For healthy individuals without families, barring some expensive medical bills, the gamble of not getting covered in 2014 likely paid off. However, the fine for 2015 coverage will double to 2 percent of income, due at tax time in 2016. Penalties increase in 2016 to 2.5 percent of income, or $695 – again, whichever is greater – then rise indexed to inflation. As more operators consult with their accountants during this tax season, many of those without insurance are finding that it might make more sense to obtain the insurance and gain its benefits than to pay the higher penalty next year, says Bill Zenk, principal and senior transportation specialist at TrueNorth Companies. At a certain point, "giving the gov- ernment an extra $1,000 or more annually just doesn't make sense," Zenk says. "We're getting close to that breaking point." The individual mandate for insurance, if it survives court challenges and leadership changes in government, could partially cripple the owner-operator business model, Zenk says. The added cost of insurance will have to be offset if the model, includ- ing one-truck true independents with their own authority, is to survive. "Employers are having to make new decisions about what to offer to their employee base" in terms of health cover- age, he says. "I think it's very new – this is the first year the ripples are starting to be felt. In the next couple of years, we'll see even more of a ripple effect." Uncertainty surrounding the law continues. As this month's issue goes to press, the Supreme Court is scheduled to hear arguments in King v. Burwell. The challenge rests on an ACA lan- guage technicality but nonetheless holds the potential to eliminate subsidies for insureds who purchased insurance in one of the 36 federal-exchange states. If the ACA remains as is, there will be, in Zenk's view, an "industry recogni- tion that higher pay needs to be con- templated" as an offset. "Or you could see contractors exiting the industry or reverting back to company status." Overdrive last looked in-depth at the issue of health-insurance costs and cover- age when the health-insurance exchanges rolled out in 2013, accompanied by enrollment problems that took months to fix. At that time, North Carolina-based owner-operator Bryan Spoon and his independent dispatcher business part- ner, Anna Lowdermilk of Lowdermilk Carrier Services, were among those test- ing the waters of the exchanges. Spoon was accustomed to paying cash to a medical practitioner – at a discount – that he used for regular visits. Spoon, Lowdermilk and her son ultimately enrolled in bronze-level insurance plans Did you carry insurance through 2014? OverdriveOnline.com poll No, and still don't 32% No, but I've recently purchased a plan 3% Yes, from a non- exchange source 55% Yes, from the ACA exchanges 10% Overdrive readers aren't flocking to the ACA-enabled health-insurance exchanges. Our most recent poll on the subject showed only 13 percent of readers using the exchanges. On the other extreme, three in 10 remain content to run without health insurance and pay the tax penalty for it. States operating their own exchanges California: CoveredCA.com, (800) 300-1506 Colorado: ConnectforHealthCO.com, (855) 752-6749 Connecticut: AccessHealthCT.com, (855) 805-4325 District of Columbia: DCHealthLink.com, (855) 532-5465 Idaho: YourHealthIdaho.org, (855) 944-3246 Kentucky: KYEnroll.KY.gov, (855) 326-4650 Maryland: MarylandHealthConnection.gov, (855) 642-8572 Massachusetts: MAHealthConnector.org, (877) 623-6765 Minnesota: MNSure.org, (855) 366-7873 New Mexico: MyNMHC.org, (877) 769-6642 New York: NYStateofHealth.NY.gov, (855) 355-5777 Rhode Island: HealthSourceRI.com, (855) 840-4774 Vermont: HealthConnect.Vermont.gov, (855) 899-9600 Washington: WAHBExchange.org, (855) 923-4633 Federal exchange states HealthCare.gov, (800) 318-2596

Articles in this issue

Links on this page

Archives of this issue

view archives of Overdrive - March 2015