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March 26, 2010  |   Comments (0)   |   Post a comment

Contractors give varying outlooks on healthcare bill

President Obama signs healthcare reform legislation on Tuesday. Some school bus contractors see increased costs for their businesses, while others are hoping for reduced prices in buying healthcare.White House photo, Pete Souza

President Obama signs healthcare reform legislation on Tuesday. Some school bus contractors see increased costs for their businesses, while others are hoping for reduced prices in buying healthcare.

White House photo, Pete Souza

As Congress and President Obama passed sweeping healthcare reform legislation this week, school bus contractors assessed how the overhaul could impact their businesses.

SBF contacted executives at school bus companies across the country, and they gave varying perspectives. Some were not yet sure how the bill might affect them. Others see increased costs coming.

“There are still a lot of details to come out of this bill that need to be understood, but needless to say, this is going to have a significant impact on the cost of operating a school bus,” said John Corrado, president of Suffolk Transportation Service in Bay Shore, N.Y. “Since this affects everyone, our customers have to be prepared to support these expenses. It will be up to us as an industry to make sure that we communicate any new financial obligations well in advance so that district budgets can be adjusted accordingly.”

Magda Dimmendaal, CEO of Dousman (Wis.) Transport Co., offered a similar outlook.

“It’s too early to tell or be sure of the full impact. … One thing’s for sure: The cost of this will need to be passed on, and that will be very difficult for school districts to absorb,” Dimmendaal said. “Every district we work with has been having to make drastic cuts in their budgets for several years already. In my opinion, legislation such as this is disastrous for the whole business world, not just school bus companies.”

Kellie Dean, CEO of Dean Transportation Inc. in Lansing, Mich., said he has reviewed the legislation thoroughly and has several concerns. He said the potential escalating cost in healthcare will greatly impact his business, and he takes issue with what he said is presented as “fines and tax increases that will be all borne by employers.”

Dean emphasized that he is not anti-healthcare. “I presently offer healthcare to all my employees who need it. Every year, I rebid and I try to manage the cost of healthcare for them. I have co-pays and third-party health plans that assist in us managing the cost while I provide master medical care,” he explained.

Dean went on to say that he wants to continue to be an employer that offers healthcare for his employees, but he is concerned that his company, along with others, will not be able to afford what the legislation mandates that employers provide. He said he is certain his company will have to increase costs for the school districts and other organizations it serves, and the impact this will have on his customers worries him.  

“All of us are working for school districts or nonprofit organizations that are already financially strapped,” Dean said.

But some contractors are hoping that the reform legislation will reduce the price of healthcare.

Community Bus Services in Youngstown, Ohio, has offered healthcare coverage to its employees for the past 20 years, President Terry Thomas said. “We don’t expect our employees to feel any effects, but since there will be more providers out there and more competition, we’re hoping the cost of purchasing healthcare goes down.”

The company participates in a group purchasing program through a private employment organization and shops for better packages every year, changing providers every two or three years, Thomas said. “We may be 300 of a 5,000-employee group for the purchasing of health insurance.”

John Benish Jr., chief operating officer of Cook-Illinois Corp. Oak Forest, Ill., said that something needed to be done about soaring healthcare costs.

“I’m not yet fully sure how the new healthcare bill will affect Cook-Illinois Corp. But as a business owner, I have gotten hit with a 13- to 23-percent increase for the last 14 years on my healthcare,” Benish said. “It had to stop sometime.”

The National School Transportation Association (NSTA) sent its members an overview of the employer and small-business provisions in the bill. Those include fees on companies with more than 50 full-time employees that have no healthcare coverage, unaffordable coverage or waiting periods of more than 30 days before employees can enroll in coverage. Also, a sliding-scale tax credit will be available to some companies with fewer than 25 employees that provide health insurance.

But the massive size of the legislation defies a quick assessment.

“There is certainly much more in the new law that may impact the school transportation community as a whole,” NSTA Industry Specialist Robin Leeds said.


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