There’s still time to renew your CFMA membership. Click here to get started.

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 jeff@pas1.com.