Transportation companies face a unique set of challenges when it comes to health insurance for trucking companies. Long hours behind the wheel, an aging driver workforce, limited access to preventive care, and the physical demands of loading and unloading all contribute to higher healthcare utilization. For trucking company owners and HR managers, this translates to premium increases that consistently outpace other industries, making it harder to offer competitive benefits while maintaining profitability.
The business reality is stark: you need health benefits to recruit and retain drivers in a competitive labor market, but traditional group insurance creates financial volatility that makes planning nearly impossible. One year you're managing a reasonable premium, the next you're facing a 30%, 40%, or 50% increase that forces difficult decisions about whether to absorb the cost, pass it to employees, or cut coverage entirely.
Turnover rates for long-haul trucking average 94%,¹ and while much of this reflects drivers moving between carriers rather than leaving the industry entirely, the competition for qualified drivers has never been fiercer. According to research from the Society of Human Resource Management, 56% of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job.² Health benefits aren't optional—they're a competitive requirement.
In this two-part series, we'll explore the full picture of health insurance for trucking companies. In Part 1, we'll examine the specific challenges that make traditional group health insurance so problematic for transportation companies. In Part 2, we'll look at how Health Reimbursement Arrangements (HRAs) address these pain points while giving you predictable costs and administrative simplicity.
The pain points of traditional group health insurance for trucking companies
Before exploring HRA solutions, it's important to understand why traditional group health insurance creates such significant challenges for transportation companies.
Unpredictable premium increases
The single biggest complaint trucking companies have about group health insurance is the lack of cost predictability. You sign up for a plan at one price, and twelve months later, renewal comes with a rate increase that can range from manageable to catastrophic.
A 10-15% increase is considered "good" in the group insurance world. Many trucking companies face 20%, 30%, or even 50%+ increases at renewal. One high-cost claim—a cancer diagnosis, a premature birth, a serious accident—can trigger premium hikes that affect your entire group for years.
For a 50-employee trucking company paying $600,000 annually in health insurance premiums, a 25% increase means finding an additional $150,000 in the budget. That's money that would otherwise go toward equipment upgrades, driver bonuses, or business expansion. When you're operating on 2-8% profit margins, these increases can eliminate profitability entirely.
The lack of predictability makes financial planning nearly impossible. You can't accurately bid on multi-year contracts when you don't know what your health insurance will cost next year. You can't confidently hire new drivers when each additional employee might trigger higher premiums for everyone.
One-size-fits-all coverage for a diverse workforce
Trucking companies employ people in vastly different situations. Long-haul drivers who spend weeks on the road have different healthcare access needs than local delivery drivers who go home every night. Warehouse staff loading and unloading freight face different physical demands than dispatchers coordinating routes from an office. Mechanics maintaining your fleet need different provider networks than administrative staff processing payroll.
Group health insurance forces all of these people into the same plan, regardless of where they live or how they use healthcare. A driver based in rural Montana has the same coverage as one in urban Los Angeles, even though provider availability and costs differ dramatically between these markets.
This mismatch is particularly problematic for trucking companies with operations across multiple states. Healthcare costs vary dramatically by geography. A plan designed for employees in the Southeast might be prohibitively expensive for those in the Northeast, or a plan priced for the Midwest might offer inadequate provider networks on the coasts. Yet group insurance treats everyone the same, creating a situation where you're either overpaying in some markets or under-serving employees in others.
Administrative burden
Managing group health insurance consumes significant time and resources. HR staff coordinate annual enrollment, handle qualifying life events, manage employee questions about coverage, reconcile premium payments, work with brokers, and maintain compliance documentation.
For small to mid-sized trucking companies without dedicated benefits specialists, this falls on operations managers or owners who already have full plates. During annual enrollment, it's not uncommon for benefits administration to consume 20+ hours per week of staff time.
Beyond enrollment, there's ongoing administration. When an employee gets married, has a baby, or experiences another qualifying life event, someone needs to coordinate the coverage change with the insurance carrier. When an employee leaves, COBRA paperwork must be processed and tracked. When carriers make mid-year plan changes, employees need to be notified and questions answered.
All of this administration has a real cost, even if it's not explicitly broken out in your budget.
Minimum participation requirements
Most group health insurance carriers require a certain percentage of eligible employees to enroll in coverage, typically 70-75%. This creates a painful catch-22 for trucking companies.
If you employ part-time workers who are covered under a spouse's plan, or employees who prefer to stay on their parents' coverage, you might struggle to meet participation requirements. The solution is often to either exclude certain employee classes from eligibility (creating a recruiting disadvantage) or to heavily subsidize premiums to force participation (increasing costs).
For trucking companies with seasonal fluctuations in staffing, minimum participation requirements can be particularly problematic. When you bring on temporary drivers for peak season, many decline coverage because they're only working short-term, which can push your overall participation rate below the carrier's minimum requirement.
Limited flexibility in plan design
With group insurance, you're limited to the plan designs the carrier offers. If you want to offer a high-deductible plan to save on premiums, but your employees need a lower-deductible option, you're forced to choose. Most carriers limit small groups to 2-3 plan options, and customization is minimal.
This lack of flexibility means you can't tailor benefits to different employee populations. Your long-haul drivers might value nationwide networks since they travel frequently and need access to care across multiple states, while your local staff might prefer a narrow network plan with lower premiums focused on their home region. With group insurance, everyone gets the same options.
Understanding your options
These pain points don't have easy solutions within the traditional group health insurance model. Premium increases, administrative complexity, and inflexible plan designs are built into how group insurance works—especially for industries like trucking with diverse, multi-state workforces and higher healthcare utilization.
The good news is that there's an alternative approach that addresses each of these challenges directly. In Part 2 of this series, we'll explore how Health Reimbursement Arrangements (HRAs) provide trucking companies with predictable costs, administrative simplicity, and the flexibility to offer competitive benefits across different employee classes and geographic regions.
Read Part 2: ICHRA and QSEHRA: A better health insurance solution for trucking companies to learn how HRAs can transform your approach to employee benefits.
Or, if you're ready to explore whether an HRA is right for your fleet, talk to a Take Command expert about your specific situation.
References
- Burks, S. V., Kavan, K., & Monaco, K. (2019). "Is the U.S. Labor Market for Truck Drivers Broken?" Monthly Labor Review, U.S. Bureau of Labor Statistics. Retrieved from https://www.bls.gov/opub/mlr/2019/article/pdf/is-the-us-labor-market-for-truck-drivers-broken.pdf
- Society for Human Resource Management. (2018). "Employees Are More Likely to Stay If They Like Their Health Plan." Retrieved from https://www.shrm.org/topics-tools/news/benefits-compensation/employees-likely-to-stay-like-health-plan
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