ARLINGTON, Va. - Health insurance costs have continued to rise dramatically for HVACR contractors during the past two years, leading many to lower the benefits they offer to their employees.

The Air Conditioning Contractors of America (ACCA) released a new revised study on the health insurance costs of HVACR contractors. Last fall the association completed a survey of more than 200 contracting businesses in an effort to update a previous analysis, which was released in 2002.

A total of 79 percent of respondents received 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 the growing premium, 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 the participants increased their health benefits in 2004.

On average, contractors require their employees to pay 28 percent of the premium costs. The study showed 39 percent require employees to pay under 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, on average, 5.2 percent 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.

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Publication date: 01/31/2005