Contractors with 50 or more employees will have to provide health insurance under the health care reform law; those with fewer than 50 employees would be exempt.
While the requirement in the new health care reform law for employers to provide health insurance won’t apply to most contractors, the largest companies will have to provide insurance for their employees, the Journal of Commerce-Oregon reports. And they’ll be bidding on some projects against companies who don’t have to.
Sen. Jeff Merkley, D-Ore., had attached an amendment to the bill that would have required contractors with five or more employees and payrolls of more than $250,000 to provide health coverage. That amendment didn’t survive the reconciliation process between Senate and House versions of the bill.
As it stands, only companies with 50 or more employees will have to provide insurance. That applies mostly to the largest contractors. If the new law spurs companies below the 50-employee mark to drop their health care benefits, that could affect competition.
Brian Turmail, spokesman for the Associated General Contractors of America, said it’s hard to imagine droves of medium-to-large contractors dropping their health benefits because their larger competitors now can’t do the same in response. “That’s a bit of a red herring,” he said.
“If you cut benefits, you cut your ability to perform as a company,” Turmail said. “Everyone has the same construction equipment. There’s no secret front-end loader that’s going to beat out the competition.
“Where you’re going to compete is on the strength of your employees.”
Bart Eberwein, a vice president with Hoffman Construction, said the company wins jobs more on expertise than cost. “I’d like to think we compete on other things, complex projects that are like heart surgery in the middle of a busy campus,” he said.
Considering only health care costs misses the point, Eberwein said. The more the company spends on wellness, the less it has to spend on health insurance.
Programs ranging from smoking cessation to weight loss to blood-sugar monitoring help Hoffman keep insurance premiums low, Eberwein said. “It has already had a huge, huge, huge effect” on premiums, he said.
“Sometimes that means it just doesn’t go up when everyone else’s goes up in the double digits.”
While the Merkley amendment didn’t make the final health care reform bill, Merkley and union supporters still hope the concept will resurface in another bill. AFL-CIO President Richard Trumka said the organization will keep working to bring more contractors under the health-insurance requirement.
Tom Owens, spokesman with the AFL-CIO’s Building and Construction Trades Department, said he doesn’t know what the chances are of that happening. “There hasn’t been any discussion about how to proceed,” he said.
Owens stopped short of saying that reviving the Merkley amendment was a top priority. “We’re interested in seeing the issue revisited, but we don’t necessarily have a priority list.”
Julie Edwards, a spokeswoman for Merkley, said there’s no new stand-alone bill that does what the amendment would have, and it hasn’t been attached to another bill. She wouldn’t speculate on the chances of that happening.
“It’s really too soon to say,” she said.
Turmail said he doubts the Merkley amendment could pass as its own bill, especially after the controversy that arose after it was originally included in the health care bill. “I don’t have a sense that there’s any kind of base of support for this measure,” he said.
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