At first it was just a sore throat. Then the healthy 40-year-old man appeared jaundiced. After a visit to his family doctor, the diagnosis was given — Hepatitis C with possible liver damage. A scary illness, but treatable with medicine and a month of bed rest.
The man who contracted this illness was a chauffeur working for a New York-based limousine service. He did not have medical coverage from his employer, and was finding it difficult to afford the hospital visits. Limousine operators nationwide report a shortage of full-time chauffeurs. Many companies consistently report that they have vehicle availability but not enough working chauffeurs. Many of those same operators, like the company mentioned earlier, do not provide medical insurance for their employees. A recent Gallup poll reported that 20 percent of recent job applicants rejected a job offer because the employer did not provide medical insurance.
Bob Crescenzo, vice president of Lancer Insurance, says an employer should first make sure his or her employees are covered under state workers’ compensation insurance. Under workers’ compensation, an employee who is hurt on the job receives at or near his full salary for the time period he is unable to work. Recently, many limousine operators have been reluctantly forced to purchase workers’ compensation insurance as state governments seek to avoid absorbing the medical bills of uninsured workers who are hurt on the job. But Crescenzo says workers’ compensation insurance may not be enough coverage. “The problem with workers’ comp is that if a person hurts themselves at home while off-duty, you don’t want them to think they have to collapse at work or drive your limousine into a wall the next day in order to get medical coverage. If an employer has no additional insurance beyond workers’ comp, you can create greater exposure to your company.”
Crescenzo, whose company is the country’s largest insurer in the chauffeured ground transportation industry, believes every working chauffeur should have the opportunity to receive medical coverage. He stresses the word opportunity for a reason. “When the topic of medical insurance comes up, a lot of operators immediately assume this means that the employer pays a huge bill for full coverage for his employees. This is absolutely not the case. There are a number of options beyond an employer fully paying the premium for each of his employees.”
California Chauffeured Transportation of Burtonsville, Md., is a company that decided to offer medical insurance to its employees, with the company paying part of the premium. Parvez Ahmed, the company’s general manager, manages a staff of 22 with 12 full-time chauffeurs. He offers Blue Cross-Blue Shield PPO coverage with the company paying 25 percent of the medical insurance payment. Unlike restrictive HMO programs, the PPO allows group members to go to the health-care provider of their choice.
California Chauffeured Transportation made medical insurance available as a direct result of meetings it conducted with its own staff. Ahmed says that so far he has been disappointed by his chauffeurs’ lack of participation in the plan. “Our office staff is participating, but 90 percent of our chauffeurs are not, despite the fact that they requested this coverage. It just is not possible for us to pay more of the chauffeurs’ premium. I worked for Marriott for years and even they did not pay the entire premium.” Ahmed is worried that the company may be forced to incur additional health-care costs. “The first question an applicant for a reservation or office position asks is concerning benefits, particularly health insurance.”
Carla Vincent, a benefits expert at smalloffice.com, says many small companies offer their employees a flexible benefits package. “Thanks to Section 125 of the Internal Revenue Code, an employer can offer a flexible benefits plan and let employees pay for the particular benefits they want, including medical coverage and 401k retirement plans.”
These benefit plans offer another bonus — tax savings. “Employees use pretax rather than after-tax dollars to pay medical premiums. Through payroll deductions, they designate a portion of their salaries to be set aside, on a pretax basis, to pay dependent care and out-of-pocket medical expenses. That means your employee’s taxable income is reduced and so are your firm’s payroll taxes.”