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Contractor Benefit Update

By Jeff Robinson

The recently published 2011 Benefit Survey for Contractors indicates heath insurance premiums rose 7.6% for single and 9.5% for family coverage from July 2010 to July 2011. During the same 12-month period, PPO individual deductibles rose 18.6%, with family deductibles experiencing a similar increase at 18.9%. Total out-of-pocket health expenses rose 9.8% for an individual and 11.9% for a family over the past year.

Continuing a 25-year downward trend, only 24.1% of contractors pay 100% of the employee’s premium costs, with just 10.9% paying 100% of family premiums. Approximately 36% of all contractors with less than $25 million in revenues pay 100% of the employee premium, with 16% paying the entire dependent portion. Conversely, only 14.3% of contractors with $500 million or more in revenues pay the entire employee portion, while none pay 100% of the dependent premium.

Dental insurance is provided by 91.4% of all contractors. Companies with less than $5 million in revenues offered dental insurance 50% of the time. Contractors with more than $100 million in revenues had a dental plan 100% of the time. Similarly, chances of having a vision plan increased as revenues rose. Only 25% of contractors with revenue of $5 million and under reported to offer a vision plan, whereas 100% of contractors with revenue of more than $250 million have a plan in place. Overall, 71.8% of the contractors indicated they offered a vision plan.

When asked to describe benefit program changes over the past 12 months, 67% of respondents reported no change, 17% indicated they improved programs, and 16% reported a reduction in benefits. Participants also indicated the average employer benefit cost was 24.3% of payroll (does not include mandatory programs). There was a direct relationship between company size and the average benefit cost paid by the employer. Responses ranged from 17.0% of payroll for contractors with less than $5 million in revenues up to 29.3% for those reporting more than $500 million in revenues.

Jeffrey M. Robinson is President of PAS, Inc., which specializes in compensation consulting and publications for the construction industry. He can be reached at 800-553-4655 or