Health insurance options for regional transportation companies

Regional transportation companies play a crucial role in connecting communities and businesses. Unlike national transportation companies, regional carriers operate in specific, smaller geographic areas. They have larger fleets than local carriers, travel longer routes, and often offer next-day deliveries. Long work days and life on the road can take a toll on a trucker’s health and wellness. But, providing health insurance in the regional transportation industry isn’t easy. 

Employer-sponsored health insurance benefits boost job satisfaction, lower health risks, and help attract and retain company drivers. For many employers, finding a health benefit that’s flexible, affordable, and provides enough value is challenging. 

In this blog post, you’ll learn:

• The unique challenges regional transportation companies face when offering comprehensive health insurance.
• The pros and cons of various health benefit options for the trucking industry.
• How the individual coverage health reimbursement arrangement (ICHRA) can support transportation businesses.

Read our blog to see how to give your employees the best, affordable health insurance coverage.

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What challenges do regional transportation companies face when offering health benefits?

According to the U.S. Department of Transportation, there were more than 577,000 trucking companies in 2024. More than 95% of these had ten or fewer trucks¹. Like other small employers, regional transportation companies face challenges when offering health benefits. 

Transportation companies often have limited budgets and diverse and mobile workforces. This can make traditional health coverage unsuitable for their needs. Balancing costs while maintaining employee satisfaction can also be complex in this industry.

Below are more hurdles regional transportation companies face when considering providing health benefits:

1. High cost of health insurance. Large group health insurance is experience-rated. This means the insurer calculates premiums based on each member’s claims history. Transportation companies have many commercial drivers, mechanics, and loading dock workers who are prone to more serious medical conditions. This can cause an insurance company to charge higher premiums for group members to share risk, which can be too costly for businesses with small budgets.
2. Increased turnover rates. The trucking industry has lower retention due to poor work-life balance, safety concerns, and more. The ever-changing staff can make employers not want to invest in robust benefits. 
3. Diverse workforces. Regional transportation companies have diverse employees with varying healthcare needs. They also hire multi-state workers, part-time employees, and independent contractors. This can make finding a health benefit that supports everyone’s situation difficult.
4. Varying locations. Transportation companies have workers who are often on the road. Communicating new benefits and working with in-person HR teams can be tough. Your staff must also have health benefits that ensure access to quality medical care regardless of location.
5. Multi-state compliance regulations. The insurance industry is subject to several local, state, and federal laws. Operating a regional company in many locations requires understanding varying healthcare regulations. Compliance and industry regulations can make benefit administration complex. 
6. Limited time and resources. Many regional transportation companies are small to mid-sized businesses. They may not have large HR teams or the resources to hire a benefits specialist. Managing a health benefit without the time, support, or tools can deter many companies from offering coverage. 

Offering health benefits is a smart move, even if it’s challenging at first. PeopleKeep, part of Remodel Health, conducted a 2024 Employee Benefits Survey. We found that 81% of job seekers believe an employer’s benefits package is a key consideration when deciding whether to accept a job. Providing coverage can go a long way toward improving satisfaction and retention.

What are the health insurance options for regional transportation companies?

Selecting your team’s health insurance coverage is crucial. Choosing coverage for your company means comparing plan types and flexibility options. Most importantly, you must understand what works best for your budget and employees.

Here are several types of comprehensive health coverage that are available to you:

1. Fully-insured group plans. Many transportation companies choose fully-insured plans because they’re common and allow employers and employees to share premiums. Applicable large employers (ALEs) often use these plans to meet the employer mandate. But they can be expensive, and meeting participation requirements may be problematic. There may also not be enough plan options in every location where your employees live. And, with their experience-rated nature, premiums can be much higher depending on your team’s claims history.
2. Self-insured health plans. This type of coverage lets you pay for your employees’ medical claims instead of paying a fixed premium to an insurance company. Self-funded plans give you more control over the plan and potential savings. But it also means taking on significant financial risk and administrative responsibilities. Even with stop-loss coverage, unpredictable claims can make this option challenging.
3. Level-funded plans. Level-funded coverage blends aspects of self-insured and fully-insured policies. You make monthly payments to a third-party insurer. In return, they cover claims, a stop-loss plan, and plan administration. These plans can offer cost predictability and a potential refund if claims are low. But they may have limited plan design options, and stop-loss premiums can spike after a high-claims year.
4. Association health plans. Transportation businesses can band together with others in the region with an association health plan (AHP). By pooling resources, these medical plans can reduce premiums. However, AHPs aren’t subject to all of the Affordable Care Act (ACA) requirements. They can also have limited plan options, which may not meet the needs of your diverse staff.
5. Health stipends. A health stipend allows you to set aside an amount of money per employee to help cover medical expenses. You don’t have to offer a formal insurance plan with a stipend. They can also support various employee types, like 1099 contractors and part-time workers. But, stipends are taxable and don’t meet federal government regulations under the ACA. If you have 50 or more full-time equivalent employees (FTEs), you risk penalties under the ACA.

Navigating medical benefits can feel complex, especially in a multi-location industry like truck driving. But knowing additional coverage options can help you make an informed decision and better support your team. But, there’s one more option that’s more cost-effective and flexible for employers while allowing you to meet the ACA’s employer mandate.

What is the ICHRA?

An individual coverage HRA (ICHRA) is a customizable health benefit that works for transportation employers with any budget. With an ICHRA, you can give employees tax-free dollars for their qualifying individual health insurance premiums. This modern alternative to group coverage allows for employee personalization while you control benefit costs.

If you’re new to health benefits, the ICHRA is easy to understand. First, you choose a monthly tax-free allowance that your staff can spend on individual health plan premiums. The ICHRA has no minimum or maximum annual limits. Depending on employee usage and goals, you can adjust your contributions at the plan year’s end. 

Then, employees choose an individual health insurance plan—either self-only or a family plan—on a health exchange. Once enrolled, they’ll pay for the monthly premiums with your tax-free allowance. A special perk is that ICHRA reimbursements are free of payroll taxes for employers. They’re also income-tax-free for participating employees. 

The ICHRA is for businesses of all sizes. It can support your W-2 employees and their qualified dependents. But they must have a qualifying form of individual health coverage. You can offer the benefit if you have at least one W-2 employee. If your trucking company is an ALE, you can use an ICHRA to meet the employer mandate if your allowance is affordable.

How can the ICHRA support regional transportation companies?

The ICHRA offers regional transportation companies a flexible and cost-efficient way to match the needs of their various workers.

Here’s how an ICHRA can help employers tackle the challenges mentioned above:

1. Cost control and budget predictability. Employers can set a fixed monthly contribution amount for their employees to spend on healthcare. This gives you control over benefit spending and protects you from rate hikes.
2. Improves recruitment and retention. Transportation is a high-turnover industry. But offering customizable benefits can make your company shine. ICHRAs empower workers to choose their medical coverage from their preferred insurance provider, improving loyalty and morale.
3. Supports a diverse workforce. ICHRAs let you divide your workforce into different classes—like full-time, seasonal, and part-time—to vary allowances and eligibility. You can also offer higher contributions for employees with families or older workers. This flexibility gives you greater customization without overspending.
4. Geographic flexibility. Suppose your employees live in different rating areas or states. With the ICHRA, they buy an individual policy that fits their location and trucking lifestyle. They won’t have to struggle with set provider networks or plan limitations in a single ZIP code.
5. Simplifies compliance regulations. Instead of tracking state-by-state insurance rules, you can reimburse employees for qualified ACA-compliant plans that already follow local laws. This helps reduce time-consuming compliance tasks.
6. Eases administrative burdens. Modern administration software, like Remodel Health’s ICHRA+® solution, enables business owners to manage their benefits easily. We handle reimbursements, compliance tasks, and employee communication so you can save time and peace of mind.

The ICHRA shifts the traditional health insurance model to one that is more flexible for workers on the go.

Conclusion

The transportation industry runs on mobility, tight margins, and workforce diversity. This often means that traditional employer-sponsored insurance falls short. But these companies don’t have to settle for one-size-fits-all plans. With solutions like the ICHRA, you can attract and retain workers and offer employees health benefits that travel as well as they do.

Remodel Health’s ICHRA+® solution makes it easy for employers to set up an ICHRA. You choose a budget, and your employees can shop and enroll in the health insurance plan of their choice. If you’re looking for a flexible truck driver benefit, chat with the experts at Remodel Health!

1. Trucking Economics and Industry Data

Are you new to personalized health benefits? Download our guide to learn everything you need to know about the ICHRA.

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