Dealers may want to consider self-insurance option amid Obamacare uncertainty

Not all dealers provide health insurance to their employees, but paying for heathcare is significant cost for those that do.

“Our second-biggest operating cost, outside of payroll, is healthcare insurance,” Bill Dow, executive director of USMSS—an advocacy group for Motorola Solutions service partners nationwide—said during an interview with IWCE’s Urgent Communications.

During the last several months, healthcare-related decisions have been complicated by implementation of the Affordable Care Act—known to many as Obamacare—that had many owners of small and medium-sized businesses scratching their heads about which rules applied to them, because even traditional insurance carriers seemed unable to provide straight answers to many in the fall.

Although the implementation of the massive healthcare act has been politically divisive within the United States, there is one aspect of the program that everyone can agree on, according to Robert Meyer, president and founder of the Meyer Group, an insurance consultancy based in St. Louis.

“Whether you’re a proponent of Obamacare or critical of Obamacare, even the most liberal individual would tell you that there’s a lot of uncertainty out there,” Meyer said during an interview with IWCE’s Urgent Communications. “And, when there’s uncertainty and high risk, all I want to do is stay as far away from it until it settles down.”

With this in mind, Meyer has been recommending that many businesses consider self-insurance—or self-funding—options instead buying traditional insurance from a carrier. Not only does self-insurance give a company the opportunity to recoup premiums when its group has a “good year”—one without a lot of high-dollar illnesses—being self-insured means that a company does not have to comply with all Obamacare rules until 2016, he said.

“What self-funding is going to allow you to do is move compliance back to 2016, so you’re not going to get caught up in the foray of 2014, when there’s going to be a bundle of changes, and there’s going to be some more [changes] in 2015,” Meyer said. “So going self-funding is one way to stay out of the storm for the next two years.”