ARLINGTON, Va. - Health insurance costs have continued to rise dramatically for HVACR contractors over the past two years, leading many to lower the benefits they offer to their employees, according to a new study released by the Air Conditioning Contractors of America (ACCA). Last fall the association conducted a survey of more than 200 contracting companies in an effort to update a previous analysis, released in 2002.

According to ACCA, 79 percent of respondents received premium increases of more than 10 percent in 2003, with 26 percent posting premium increases of more than 20 percent. In 2004, 69 percent of participants saw their premiums increase more than 10 percent, and 22 percent saw increases of more than 20 percent.

In response to their growing premiums, more contractors are reducing benefits for employees. In 2003, 50 percent of participants reduced available health benefits, and 56 percent lowered them in 2004.

In contrast, only 10 percent of survey participants increased their health benefits in 2004.

On average, the study indicates that contractors require their employees to pay 28 percent of the premium costs. Thirty-nine percent require employees to pay 0-10 percent of the premium, while 30 percent require employees to pay 40 percent or more of the premium.

On average, 74 percent of employees are participating in health insurance programs sponsored by the responding contractors.

Health insurance costs account for 5.2 percent, on average, of the contractors' total expense outlays. This is down slightly from the 2002 study, possibly based on the decreasing coverage options being offered to employees, says ACCA.

The study breaks down in detail the differences and percentages, with sections devoted to companies of different size and companies within certain regions, to allow contractors to compare their business to similar contractors.

Companies that participated in the health insurance survey will receive a copy of the full report by e-mail at no cost. Members who did not participate in the survey can purchase the report from ACCA's online store for $50. Only members may purchase the report.

For more information or to purchase the report, visit

Publication date: 01/17/2005