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Health care bill polarizes builders

By Sean Ryan

An insurance requirement in the U.S. Senate’s health care bill targeting small contractors has opponents worried lawmakers are unfairly singling out the construction industry.

“That concerns me,” said Gary Roehrig, president of Roehrig & Savola Builders Inc., New Holstein. “I’d really like to know what we did to deserve it.”

The health care bill the Senate passed Dec. 24 includes an amendment that would require construction companies with as few as six employees offer health insurance. The health insurance requirements kick in at 50 employees for all other companies.

Setting the threshold at 50 employees would exempt most contractors in the U.S., said Lake Coulson, executive director of government affairs for the National Electrical Contractors Association, an organization that supports the health insurance requirement. Most of NECA’s members are companies that provide insurance through collective-bargaining agreements with unions, he said.

“We’re saying, from our perspective, we take care of our employees,” Coulson said. “We think it’s the right thing to do.”

The health care bill will not be hard on builders because it doesn’t require companies with five or fewer full-time employees provide insurance, Coulson said.

“The real small mom-and-pop operations would still be exempt,” he said.

The health care bill would not affect Roehrig’s company because he only has one employee. But, he said, about a third of the homebuilders in his area fall into the 6-to-50-employee range.

“You get the same message from all of them,” he said. “When is it going to stop? What have we done to merit all of this attention?”

The requirement that companies offer the insurance is not the problem, said Brian Turmail, spokesman for the Associated General Contractors of America. In fact, he said, more than 90 percent of AGC’s members already offer coverage.

“This is not about providing health care,” Turmail said. “This is about foisting costs on the construction industry alone based on midnight deals done with little or no debate.”

The penalties and the paperwork are problems, he said. If companies offer insurance and employees choose not to accept it, the companies still must pay higher taxes, Turmail said.

“Even if their employees do accept it,” he said, “they now have the additional regulatory burden of showing that they do accept it.”

The recordkeeping that comes with different government regulations already is turning builders into office managers, said Roehrig, secretary of the Wisconsin Builders Association. He said he used to spend his days in the field and reserve the last two hours of the day for paperwork. Now, he said, the job requires at least one day a week of desk time.

The inclusion of contractors in the health care package only will make it worse, Roehrig said.

“It bothers me to look at all of the bureaucracy and the paperwork that’s being thrust onto these young builders,” said Roehrig, who took over his company in 1979. “It’s at the point of: How are they going to find time to get out into the field?”

One comment

  1. Current Economy Not the Issue… Merkley Amendment Effective Four Years from Now… and Exempts 65% of Construction Firms with Minimal Fine if Firms Continue to Refuse Healthcare to their Employees… No Sympathy Deserved for Those Exploding the Nation’s Uncompensated Care Bills in One of Nation’s Most Hazardous Industries

    Thousands of small construction business support lower construction industry specific standard for one good reason… firms without insurance for their employees regardless of how profitable in boom years or recession shift the cost of their worker’s health care in an injury prone and hazardous industry to the rest of the health system through uncompensated care nightmares for hospitals, emergency rooms and Medicaid. Further their employee health care bills go to the rest of the health insurance industry passed on through higher premiums… as much as 30% higher according to testimony. What did the firms and individuals “doing the right thing” by providing insurance to employees and families do to deserve this?

    The key amendment of importance to construction industry employers who provide health insurance for their workers is an amendment sponsored by Sen. Jeff Merkley (D-Ore.) to establish a separate construction industry size standard for the small business exemption in the bill. The Merkley amendment would require (beginning in 2014) construction industry employers with five employees or more and $250,000 in payroll to provide health-care benefits or pay a $750 penalty per employee per year.

    The Sheet Metal and Air Conditioning Contractors National Association, representing nearly 5000 construction corporations across the nation, commends the work of Sen. Merkley over the last three months to get this provision included in the final Senate bill. To do otherwise would have exempted one the most dangerous and injury prone industries where workers are 5 times more likely to die on the job as the average occupation. If any industry needs healthcare it is construction yet the Merkley Amendment would cover just a third of the larger companies starting in 2014 when most expert see the recession long past.

    The Senate bill was crafted to expand coverage to as many U.S. citizens as possible. Covering more individuals is important to driving down costs and to easing the cost-shifting burden felt by those providing insurance for their workers. Cost-shifting results in higher premiums and higher health-care costs for those receiving and providing insurance because of the uncompensated care costs of the uninsured and the underinsured.

    Egregious employer cost-shifting practices increase the burden on all taxpayers while significantly increasing premium costs for responsible employers providing their employees with health insurance. Government subsidies, provided for in the bill, would cover construction workers whose employers don’t provide health insurance continuing to shift the cost away from the employer to the taxpayers and to local, state and federal programs. Without the Merkley provision the cost-shifting will continue in the construction industry.

    The Senate bill provides a general exemption for small businesses with 50 or less employees but as SMACNA President Lindemulder observed, “fifty employees is not a number that makes sense for the construction industry where small businesses dominate.” Ninety percent of construction contractors have 20 employees or fewer. Under the Merkley amendment approximately 65 percent of construction employers will remain exempt from the requirement to provide insurance or pay a $750 penalty. Furthermore, Lindemulder noted that “while $750 is not much of a penalty in an industry where some pay more than $15,000 per year per employee to provide quality health care, it does begin to address the cost-shifting that now occurs.”

    SMACNA, an international trade association representing 4,500 contributing contractor firms, is dedicated to promoting quality and excellence in the sheet metal and air conditioning industry. SMACNA has national offices in Chantilly, Va., outside of Washington, D.C., as well as on Capitol Hill.

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