Less expensive health insurance a priority with construction industry

Affordable health care in the form of association health plans has become a top priority for the construction industry, according to the Associated Builders and Contractors organization.

ABC, which represents 23,000 construction firms nationwide, touts AHP legislation as the solution to an often-confusing maze of individual state regulations and rising costs brought about by insurance company consolidation.

Joe Rossman, vice president of fringe benefits for ABC, said large insurance companies are lobbying against AHP legislation – formally titled the Small Business Health Fairness Act – because it threatens competition in a marketplace without options.

Rossman said the reduction of insurance carriers due to a flurry of buyouts during the past few years has not led to lower rates for contractors.

“The results just aren’t true,” he said. “It’s [insurance] a take-it or leave-it issue.”

ABC, in addition to related industry groups like the Associated General Contractors of America, has been part of the push for Congress’s pending approval of the Small Business Health Fairness Act, which could give small construction company owners more affordable health care for employees.

The legislation was introduced in the U.S House of Representatives and would allow small businesses to join together nationwide through federally certified association health plans.

“It [AHPs] gives you an entity negotiating for the small employer,” Rossman said.

The House twice approved similar AHP legislation during the 108th Congress — on June 19, 2003, and again on May 13, 2004. Both bills passed with wide bipartisan majorities.

A companion AHP legislation, S. 545, was introduced in the U.S. Senate during the 108th Congress, but the chamber never voted on the bill.

Rossman said ABC actually offered health insurance for members beginning in 1957, and continuing for 44 years. The organization stopped this service because of a lack of participation by insurance companies and increasing complexity of state regulations.

During the time ABC offered member health insurance plans, it routinely beat competing insurance companies by at least 20 cents on the dollar by eliminating marketing and advertising, said Rossman.

“All profits, if there were any, went to the benefits of those employees,” he said.

Rossman said if current AHP legislation is approved by Congress, it would work in a similar manner – at no cost to taxpayers. “The bill is basically revenue neutral,” he said.

Organizations wishing to offer their members health insurance plans would also be required to meet specific criteria. Some of these include: minimum of three years in existence; maintain a separate trust with appointed trustees; and create a three-year “game plan” for operations.

David Mendes, director of communication with the American Subcontractors Association, said although AHP legislation wasn’t a priority for his organization, it did support anything that could have a positive impact on members. He said ASA offers members some health benefits, but not outright insurance.

ASA, like other such organizations, must contend with both union and non-union members, some of whom are covered by their union’s health insurance plan.

Some state chapters of AGC currently offer similar health insurance plans to their members, though on a much smaller scale.

Cary Hegreberg, executive director of the Montana Contractors’ Association, said his AGC chapter offers members a “self-insured” healthcare plan. He said this plan works on an “arm’s length relationship” with trustees administering the insurance.

Hegreberg said “dramatically escalating medical costs” have plagued members despite having the insurance option. “Premium increases are difficult to bear,” he said.

Despite problems faced by many of the Montana Constractors’ Association members, Hegreberg isn’t optimistic about the proposed AHP legislation.

“I think it’s going to be extremely difficult to find a one-size-fits-all solution,” he said. “Especially in the construction industry.”

Sandy Cardenas, a controller with 71 Construction in Casper, Wyo., said although she hasn’t really looked at AHPs, her company would “definitely look at it” should such legislation be approved.

71 Construction currently supplies its 100 employees with health insurance plans through Great West Life and Annuity in Denver, Colo. Cardenas said the company considered an insurance option offered by the Wyoming chapter of AGC, but decided it was “way too expensive.”

“Insurance is incredibly expensive,” she said. “We try to pick what is the best deal for the money and health of the employees any way we can.”

Patrick Beeson can be contacted at [email protected].