All-In Delivery Partners LLC is a delivery service provider in West Jordan, Utah. Operating from the warehouse of an online retail giant, the company employs about 75 drivers, each of whom aims to safely deliver hundreds of packages each day. All-In Delivery Partners prioritizes career advancement and wants its employees to follow the owner’s lead in growing from a driver to delivery service partner (DSP) owner.
The transportation industry, and DSPs in particular, are turning away from traditional employer-sponsored health insurance. Companies face driver shortages, particularly as young people are quick to bounce from one opportunity to another. To reduce turnover, employers want to offer attractive benefits; additionally, the retail giant with which All-In Delivery Partners works requires insurance for DSP partners. However, group plans are often prohibitively expensive.
Finding affordable healthcare is crucial for DSPs. The owners of DSP companies are in a unique business where the retail giant controls the company’s growth, and they can only truly control fixed costs such as auto and insurance and workers’ comp. That means it’s crucial for owners to shop around for the best value for each of those fixed costs in order to protect their margins.
When Robert Carter launched All-In Delivery Partners in November 2022 in the Salt Lake City suburbs, he defaulted to traditional group health insurance for his drivers. For the first year, the company had a conventional one-size-fits-all plan where the costs were deducted from employee paychecks. But some of Carter’s employees required expensive prescriptions and other medications, which led to a stunning renewal rate increase.
Large corporations have sufficient headcount to negotiate favorable rates with insurance providers. Smaller companies like All-In Delivery Partners do not have that luxury. A company’s premium is directly tied to its risk pool, so if a single employee or one of their dependents has a medical emergency or requires specialized care, the overall group rate spikes.
Heading into 2024, All-In Delivery Partners received notice that its annual healthcare costs were going to rise 82% — more than $100,000 — for the year to come. Employees were going to have to pay more than double the amount in each paycheck, and Carter’s costs would skyrocket if he tried to subsidize more of the charges for them. The situation was untenable.
I was blown away because we really liked who we worked with, quite frankly. We had no problems with it and we were happy,” said Carter. “But it was completely cost prohibitive for me to continue with it. It was going to literally double.
The company also faced potential participation rate issues. Insurers want to spread risk across a larger group of people and often impose challenging participation requirements. All-In Delivery Partners had several young drivers who were still on their parents’ insurance and others who were covered by a spouse’s plan, so a traditional group plan was a poor fit for the company.
All-In Delivery Partners needed a healthcare plan that would not hold its headcount against it or punish the company for preexisting conditions.
A broker connected Carter with Take Command and introduced All-In Delivery Partners to the concept of an individual coverage HRA (ICHRA). The broker told Carter that ICHRA would likely be a better option for his business.
With ICHRA, employees purchase the individual health plan of their choice from healthcare.gov or a state-based exchange and get reimbursed on their paycheck, tax free. Employers like All-In Delivery Partners gain control over their healthcare spend, while employees are free to choose a plan that works with their local providers and covers their unique needs.
Carter immediately appreciated what the new model meant for his drivers, especially those with complex health needs. With ICHRA, the employees who required expensive medications could choose between 50 different individual health plans, selecting carriers with whom they had a previous positive experience rather than being forced to choose an insurer by a one-size-fits-all group plan. ICHRA gave All-In Delivery Partners’ employees the freedom to choose the plan that fit best.
“They could do the less expensive or most expensive option depending on what suits their particular circumstances,” said Carter. “I'm just so happy that there was an option that quite frankly gave my employees a lot more options, and it's more cost effective for me. So it's really been a win-win.”
Once Carter made the decision to switch to ICHRA, the transition was a breeze. After a brief initial learning curve, Carter and his operations manager were “dialed in” and managing the company’s entire healthcare system with only 20 additional minutes when processing payroll.
Carter believes other transportation companies, especially DSPs, are turning to ICHRA because the traditional insurance route became “cost prohibitive.”
It gave us a whole other option,” said Carter. “I think it’s a win-win because people have the option to choose an insurance carrier they want to work with, or have worked with before, and avoid the ones that they have had bad experiences with.
The All-In Delivery Partners’ employees with extensive health needs are particularly satisfied with the new model. Carter noted that those employees — who have a long history of dealing with insurance carriers — now have the flexibility to choose the carrier that they’re most comfortable with. They can go with the path of least resistance that gets exactly what they need, knowing their medications will be approved, for the least amount of money out of their pocket.
ICHRA has also given Carter security. He already has to worry about annual renewals for auto insurance, workers' comp, and more, so taking one potential cost increase off the table was a relief.
“It’s good that every year, I don’t have to have this stress of wondering, ‘How much is it going to go up this year?’ because obviously, I can’t control the types of things that my employees are dealing with health-wise,” said Carter.
For me, it’s the peace of mind of knowing that I could just roll into this plan again. If I stayed with a group plan, who knows where I would be right now in terms of the amount that I’d have to pay to subsidize and make sure it’s affordable for my employees,