The Current Situation
According to a recent survey by MarketWatch, of the 20 professions least likely to have health insurance, 11 of them are in the construction industry. The average uninsured rate for full-time workers in the U.S. is 12%, but the percentage of certain categories of construction workers without health insurance is much higher. This includes the following workers listed in order of the highest uninsured rate:
- Roofers (50.5%),
- Drywall hangers, finishers and ceiling tile installers (49.5%),
- Plasterers and stucco masons (49.1%),
- Fence installers (45.7%),
- Carpet, tile and floor installers (45.2%),
- Painters and paperhangers (43.1%),
- Construction trade helpers (42.8%),
- Installation, maintenance and repair helpers (40.5%),
- Cement masons, concrete finishers and terrazzo workers (38.7%),
- Brick masons, block masons, stonemasons and reinforced iron and rebar workers (38.6%), and
- Construction laborers (37.5%).
Caveat: At least some of the workers who reported not having health insurance coverage could be classified as independent contractors. This means they wouldn’t be entitled for benefits from an employer other than themselves.
As competition for skilled workers increases, construction firms are beginning to see the light. In addition to other fringe benefits of a non-medical nature — including 401(k) plans and other perks like flexible work schedules and family leaves — contractors are becoming more attuned to the needs of their workforces.
Rising costs, especially for health insurance for firms with a relatively small group of employees, can make this problematic. Nevertheless, there are benefits that may be incorporated into a package offered by a construction company in 2018.
Health Insurance and Other Medical Benefits
Forward-thinking construction business owners understand the value of offering health insurance plans and supplemental benefits. Without those plans, workers could face a financial disaster if they’re injured or become ill. Not only do the plans provide financial protection — as well as peace of mind — voluntary benefits are generally available at a lower cost to employees than the tab they would have to pay on their own. Following is a roundup of the main fringe benefits to consider:
Health insurance. Although health insurance coverage is generally expensive to provide, employers can partially offset costs by requiring employee contributions. In addition, a high-deductible health plan paired with a Health Savings Account may be a cost-effective solution for all concerned. This is often the optimal approach for construction firms.
Keep in mind that the Affordable Care Act (ACA) mandates coverage by certain employers. Under this law, companies with 50 or more full-time employees and/or full-time equivalents must offer reasonable and affordable coverage or suffer a stiff penalty. Employers with fewer than 50 employees or FTEs can choose to sign up for a health insurance plan, but doing so isn’t legally required. (The Tax Cuts and Jobs Act, enacted at the end of last year, repeals the ACA’s mandate for individuals to buy health insurance, but not until 2019.)
If your firm decides to provide health insurance, be aware that most health insurance companies require the employer to pay for at least 50% of the premium. This is designed to encourage plan participation and enable the insurer to spread risk. Similarly, many insurers also require employers to meet certain plan participation thresholds. Thus, a set percentage of the workforce must enroll in the plan for it to remain in effect. Despite these benefits, taking on this obligation can be daunting to small construction firms. Rely on your professional advisors for guidance.
Dental and vision coverage. Typically, dental and vision plans are voluntary programs, so the employer doesn’t have to contribute or otherwise subsidize premiums. This makes them an easy alternative to offer. Plus, basic plans can be relatively inexpensive. This coverage may be supplemented by add-ons — orthodontic care and laser vision correction coverage, for example.
Other medical coverage. If a construction firm offers health insurance coverage to workers, it may provide other benefits relating to medical needs — including protection in the event of accident, injury, illness or even death. For instance, a firm may offer at favorable rates:
- Life and accidental death and dismemberment,
- Short-term disability,
- Long-term disability, or
- A combination of the three.
Because of the hazardous nature of the construction industry, it generally leads the pack in terms of injuries and workers’ compensation claims. The physical nature of the work also means that employees often can’t work while injured. This makes “”extra”” health insurance protection even more important.
Mental health insurance coverage. The construction industry is historically in the top 10 occupations for suicides. There are many reasons for this based on age, education, gender and risk factors such as:
- An existing culture that tends to value staying on the job and working through pain,
- The seasonality of the work,
- Travel demands,
- Time exposed to weather extremes, and
- Work shifts that can disrupt normal sleep patterns.
These characteristics can lead to suicide if left unchecked. As a result, it makes sense to consider mental health and related services as part of a benefits program. For example, firms may choose to offer employees 24/7 phone access to professional counselors. These counselors can help address work and life challenges and other matters such as depression, stress, child development concerns and domestic issues. Usually, the company assumes the burden of the cost for such programs.
The landscape for compensation packages continues to change. Although construction firms have traditionally lagged behind in offering health insurance and related benefits, they’re starting to catch up. Don’t let your firm be left in the dust. Your CPA can help guide you in the right direction.