Now that health care reform has become law, many roofing professionals need to begin preparing to provide health care benefits to their employees or pay a penalty. However, if not for a last-minute change to the legislation advocated successfully by NRCA, the law's requirements would have applied to many more roofing professionals because the construction industry largely would have been excluded from a key small-business exemption in the legislation.
The amendment
Beginning in 2014, the health care reform law requires employers to pay a $2,000 penalty per employee if they do not provide government-approved health care benefits to their workers. However, recognizing that small businesses have greater difficulty affording health insurance than large businesses, early drafts of the legislation exempted businesses with fewer than 50 full-time employees.
However, an amendment introduced by Sen. Jeff Merkley (D-Ore.) was added that would have set the small-business exemption threshold at fewer than five employees (and payroll expenses of at least $250,000) only for businesses in the construction industry. Therefore, all but the smallest construction employers would have been excluded from the bill's small-business exemption. Construction was the only industry singled out with no congressional debate or hearings.
If enacted, the Merkley amendment could have had devastating consequences for small roofing businesses. For many small contracting companies, it would have required a choice between increased health insurance costs or paying a punitive penalty and could have forced some employers to lay off workers or forego hiring. Moreover, the amendment's complex compliance requirements likely would have increased costs for firms that provide health care coverage to employees.
The opposition
Proponents of the Merkley amendment argue it is needed to "level the playing field" between open-shop and union contractors. However, this argument ignores the reality that open-shop contractors are unable to enter the type of multi-employer health care plans that are available to union contractors, most of which are exempt from the cumbersome web of state insurance laws and mandates that contribute to the high cost of health insurance.
Proponents of the Merkley amendment also assert the five-employee threshold is justified for employers in the construction industry because of a high rate of workplace injuries in construction. However, this assertion ignores the fact that construction employers provide workers' compensation insurance as well as compensation for lost wages. The amendment's proponents also ignore the Bureau of Labor Statistics data showing higher levels of reported injuries in the manufacturing, retail and health care sectors.
Victory for now
NRCA believes singling out the construction industry in such a narrow manner without clear justification would have been poor public policy and emphatically communicated this position to Congress. At the very least, a policy change of this magnitude should have undergone careful consideration through the full legislative process, including hearings and open debate.
In the end, Congress agreed with NRCA that construction firms should have the same small-business exemption as other employers. The final health care bill passed by Congress eliminated the provision.
However, this may not be the end of the issue. Proponents of the Merkley amendment have urged Congress and the White House to give the amendment an up-or-down vote as stand-alone legislation. As such, NRCA will continue working with members of Congress to ensure employers in the roofing industry are treated fairly in health care and other legislation.
Duane L. Musser is NRCA's vice president of government relations.
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