The recent fourth quarter national Business Expectations Survey by Transport Capital Partners (TCP) reveals more than 80% of carriers report that recent health care changes will adversely affect them.
“The cost pressure for driver health care and other employees’ health care is just another balancing act challenging carriers this year during rate negotiations and amidst uncertainty in the general overall economy,” said Richard Mikes, TCP partner and survey leader.
Lana Batts, another TCP partner, said, “Maybe the 19% who reported no effect are primarily independent contractor firms who are not seeing impacts immediately. Ultimately, contractors must be compensated for the cost of their own health insurance, or this source of capital and labor for the industry will continue to shrink. The survey continues to show less reliance on contractors because they are simply less available.”
Carriers are reacting by shifting more costs to employees (43%) and are asking employees to pay more for family coverage (37%). Twenty-nine percent are affected by increased costs, but still haven’t developed an alternative plan.
“With two-thirds of carriers telling us that driver wages must go up above $60,000 to attract and retain drivers, it is likely that drivers will also put more emphasis on shopping for fringe benefit packages as a part of the compensation mix in the future, espeically as the effects of health care change reverberate through the economy,” said Mikes.
“Smaller carriers are being hit harder than their larger brethren (39% vs 24%),” said Batts. “Cost shifting is predominant with smaller carriers while wellness plans are more popular with larger carriers. These changes will also impact the competitiveness between large and small carriers.”