Insurance And Gas Prices Soar
As business owners attempted to control the costs of doing business, many found that insurance costs were uncontrollable. Horror stories cropped up concerning companies having to lay off employees to reduce premiums or to prevent the firm from going out of business.
An ACCA survey of members disclosed that, on average, contractors paid 61 percent more for employee health insurance premiums in 2002 than they did in 1999. In addition, ACCA reported that survey respondents typically spent 7.1 percent of their total operating expenses on health insurance premiums in 2002.
With many ACCA members employing fewer than 25 people, "they are being forced to either reduce insurance coverage or stop offering it altogether, just to keep their business doors open," Paul Stalknecht, president and CEO of ACCA, told Congress.
On June 19, the House of Representatives passed legislation (HR 600, the "Small Business Health Fairness Act of 2003") sponsored by Rep. Ernie Fletcher by a vote of 262-162. The bill was designed to help lower the cost of health insurance by allowing small contractors to purchase health insurance under the same rules as large companies and trade unions. However, the act is currently being held up in the Senate.
Moving into 2004, there is still hope that it could be passed. Since it will be the same Congressional session, legislation does not need to be passed by the House again next year. Also, last month Senate Majority Leader Bill Frist formed a Senate Republican Uninsured Task Force to review possible solutions for uninsured people in America. Chairing the Task Force is Senator Judd Gregg; included in the task force are some very strong supporters of association health plans (AHPs).
"They've already had several meetings, and are looking closely at the merits of AHP legislation," said Chris Brown, ACCA manager of Federal Affairs. "Frist has said he wants a bill on the uninsured to pass in 2004, and, if the Health Fairness Act can't move on its own, it may be included in this uninsured legislation. President Bush remains committed to AHPs, as evidenced by the fact that he continues to mention them in speeches around the country.
"Moving into a critical election, it's vital that contracting business owners take an interest in this issue and contact their senators, urging them to support association health plans. With legislators from both parties eager to pass legislation addressing health insurance, we need to make sure that this agenda item remains in front of the senators who represent us."
In addition to the rise in insurance costs, contractors, as well as all consumers, are expected to see higher natural gas bills this winter. According to the U.S. Department of Energy (DOE), residential natural gas prices for this heating season are expected to be about 10 to 15 percent higher than the average prices during last winter's heating season. In the final quarter of 2003, wellhead prices (the cost of the gas itself, excluding transmission and distribution charges) are projected to be about $1 per thousand cubic feet, 32 percent higher than one year ago.
Time will tell, but many contractors said they plan to make lemonade out of this lemon. With higher utility prices, many contractors see this as an opportunity to show homeowners the value of having more energy-efficient heating and cooling equipment.
Publication date: 12/29/2003