New Health Care Option Will Cut Your CostsBy Garry Bartecki
Article Date: 07-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.
Put the captive myths and nay-sayers aside. Consider the facts of a new program for AED, and get a quote – it may be one of the best savings you realize in 2010-2011.
I had a busy month.
Planning for and leading the annual CFO Conference
Working on new cost-cutting opportunities for members
Planning new Web-based training deliverables for members
Keeping pace with the constant changes in the marketplace
Busy, busy, busy.
We had an intelligent and energetic crowd, informative presentations and active discussion on many subjects.
Steve Pierson and Ron Hodgeman on Taxes – Watch your compliance with the 1031 rules. Keep track of your tax position, especially if you are selling off rental units. Be aware the IRS is raising the “passive” issue regarding rentals. It’s time to do some serious tax planning.
Scott Stafford on Accounting and Audit Issues – There are many audit issues to consider during these economic times, one of the most important being unit valuation. Be aware that the process used to value inventory versus rental units is different. Make sure your auditors know what they are doing!
Eli Lustgarten’s Industry Update – Eli said to tell you, “The recession is over.” His data reflects that many sectors are back on track to recovery, even though that track is pretty flat at this time. Unfortunately, construction is still resting on the bottom of the cycle with nonresidential construction still the wild card out there. One of his main points is even if we have a full recovery, we are not returning to 2007-08 levels any time soon.
Nick Agliata on Capital Availability – Nick is the general partner of an equity fund that is interested in funding dealer operations. If you have the right story behind you and could use some help to make acquisitions or grow the business, he may be interested. Of course, the cost of high risk money varies depending on what it is used for.
Bank Panel – It was comforting to know that banks who know the industry will try to work things out with customers to manage cash flow until things get better. We also discussed ways to hedge floating rates, as well as take advantage of diversification credits as part of a rental or purchase transaction. Thomas Ball briefed the participants about a virtual F&I function so that every dealer could “have” their own F&I department.
New Health Care Option
We also discussed the CFO’s role in risk management, a new health insurance opportunity and new AED profitability programs for members.
AED has a new Preferred Provider of health insurance: Veritas Risk Services. Veritas has developed a captive health insurance program exclusively for AED members, which we believe every member company should at least consider. After reviewing the plan and how it works I am convinced it will put money on your table, no matter if you are self insured or group insured.
Many of you have probably heard captive horror stories, but these are irrelevant with this plan. Each participant is underwritten separately to avoid adverse consequences for the entire group. Here are some of the things that impress us:
Joining a larger pool should reduce your cost
Much of the industry profits are eliminated, which should reduce your cost
Being in a larger pool should reduce both insurance cost and administrative cost
If your company has a good claims year, you have the opportunity to get the unused premiums back. Did your current health insurance network ever offer you money back for not having many claims?
And by the way, the network is a large nationwide network.
With the insurance companies handing out 30-40 percent premium increases on a regular basis these days, this plan is a great alternative. It has been a year in the making and is currently in use in other industries. If they call you, let them provide a quote on your next renewal. Or get the ball rolling and call them.
On a separate closing note, I recently read a report that stated that used prices are firming up and actually increasing, along with decreased auction sales. Maybe we are finally sucking up the excess equipment that flooded the market. It also looks like rental rates are firming up as well.
Remember: AED can help you through this recovery – call me with questions anytime.
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