ROCKVILLE, Md. — As Congress takes a summer break, the heat is rising over the health care reform debate. The Mechanical Contractors Association of America (MCAA) President Lonnie Coleman and United Association (UA) General President Bill Hite sent a joint letter to Congressional leaders to state the concerns of small business owners who employ union workers.

Of vital interest to MCAA small businesses that provide employee health benefits as opposed to competitors that do not pay comparable benefits: Signatory contractors will continue to be pressed to provide those benefits while subsidizing the system with higher premiums to pay for uncompensated care of those uncovered workers and their families. Another issue of concern is the taxation of benefits contributions as income to workers, again putting competitive pressure on the industry’s wage and benefits negotiations where pension funding increases and potentially taxable income increases will undermine the competitiveness of union signatory employers.

Proposals in the Senate would exempt employers with fewer than 25 workers from mandatory coverage provisions. In the House, the exemption is based on total payroll: those with $500,000 or less would be exempt from mandatory insurance coverage for their employees; those with between $500,000 and $750,000 would incur a reduced penalty for uncovered employees; and those with $750,000 or more in total payroll would have to pay an 8 percent penalty for not providing employee health care coverage. The Commerce Department’s Census of the Construction Industry reports that 90 percent (641,374) of the 710,307 U.S. construction industry businesses in 2002 had fewer than 20 employees and 84 percent have less than $500,000 in total payroll.

According to the MCAA, “The proposed 8 percent of payroll penalty for those firms not providing benefits also falls woefully short of maintaining prevailing industry standards in the construction industry, where union-signatory employers overall pay fully 21.5 percent of payroll for health and welfare benefits nationwide ($6.70/hour on a $31.11/hour average wage). In many urban and other high health care cost areas, the per hour contribution for health benefits is considerably more. In New York City, for example, the specialty construction employer health and welfare contributions top $13/hour.”

Publication date: 08/17/2009