Senate health care bill singles out construction industry

Contractors are flabbergasted over a provision in the U.S. Senate’s version of the health care bill that singles out the construction industry for a special rule.

The bill says any business with 50 or more employees must provide health insurance or be subject to a $750 fine per worker. Construction companies are the one exception to this rule: Any construction company with just five or more employees is lumped in with the 50-plus group and required to provide health insurance to its employees, or else pay the fine.

The provision that made this exception is called the Merkley amendment, named for Oregon democratic Sen. Jeff Merkley, and it was inserted into the $871 billion bill in the few days before its Christmas Eve passage.

There was no debate or vote on the amendment; it passed as part of the 300-page Manager’s Amendment.

Labor unions lobbied for the bill, reportedly written by the AFL-CIO. Its supporters maintain that the true mom-and-pop construction companies have fewer than five employees.

“A lot of your construction groups – if they’re out there, unless it’s a major job, they’re not hiring that many people,” Idaho State AFL-CIO President Dave Whaley said. “Take an electrical company. A job may only have 10 to 15 people, and that leaves them out of the 50-employee threshold.”

He said these smaller groups are more prevalent in the construction industry than they are in other industries.

“Plus, with the future plans of trying to get more jobs in the construction industry to take care of our infrastructure – our bridges, roads and everything else – they’re looking down the road saying, ‘Hey, we’ve got to make sure these guys are covered,’” he added.

And he said construction companies can “absolutely” afford the added cost because it’s the right thing to do and it will help them attract better, more faithful employees.

But contractors beg to differ.

Wayne Stacy is the president of the Building Contractors Association of Southwest Idaho and owner of Meridian-based Stacy Construction.

He said he’s talked to subcontractors who are saying they’re looking at cutting back on staff to put their companies below the five-employee threshold because they simply can’t afford to provide health insurance.

“I know it’s a huge struggle,” he said. Stacy Construction employs three workers currently, and Stacy said the company’s basic health insurance plan is costing him about $1,000 a month. “It’s something that’s almost impossible to keep … when you’re not building. If you’re only building a few homes a year, those are just paying to keep business going at this phase. I know a lot of people that are dropping health insurance and any dues they can pay to survive. Unfortunately health insurance is one of those big expenses out there.”

And Stacy said the five-person threshold will affect a lot of small builders in the area. Many have their own framing crews and office help, so it’s pretty easy to reach that benchmark.

“I’m not sure why they would single out an industry, especially one like ours that’s been hit so hard,” he said. “When they tout small business as being one of the gold standards for why America is great, and then they go out and target small businesses, it’s really hard to understand, especially when the amendment is put in in the eleventh hour.”

The House’s health care bill does not include a similar provision. The two houses are working toward creating a final bill.