Cost Saving? BE&K sponsors community race to boost employee interest in exercise while Skanska subscribes to company-customized wellness publications mailed to employees.

The Minnesota Mechanical Contractors Association and the labor management health care coalition in Minneapolis/St. Paul are pushing cost controls by "creating smarter buyers," says Gary Thaden, association government affairs director and coalition co-chair.

Thaden notes that while a dozen hospitals in Minnesota considered themselves to be heart care specialists, the groups hired a third party to evaluate them based on "positive outcomes" for patients. The result: Only three hospitals were certified as "best-in-class providers" for heart care.

"People have to get past the idea that every provider is as good as the next one," says Thaden. Patients using the three chosen hospitals, which include the prestigious Mayo Clinic, suffer fewer complications such as heart attacks and post-surgery infections that can sideline workers and rack up costs.

Thaden wants health- care dollars going to those that are best at what they do. Data on the heart centers is updated regularly and reviewed annually. A year after the coalition unveiled its preferred hospital list, the operating engineers union recently signed on and has "already saved as much as $400,000," he says.

Education, Education, Education

These days, contractors are educating employees on when to visit doctors or how to query providers on the need for high-priced tests. Still others focus on healthy living. "Employees’ lifestyles affect company health-care costs. They must be more conscious of that," says T. Michael Goodrich, chairman and CEO of BE&K, Birmingham, Ala.

BE&K sponsors health assessments for its employees and pays 100% of costs for disease screening tests and preventive medicines such as flu shots. As a self-insured company, it requires a delicate balance between managing costs and increasing deductibles, says Goodrich.

BE&K encourages employees to give up unhealthy habits, barring smoking not only in the firm’s headquarters building but throughout its 88-acre campus, says Dennis Schroeder, president of BE&K’s engineering unit. Corporate executives worried about the reaction, but employees actually thanked them for an "excuse" to quit smoking, says Schroeder. Skanska Building Co., Parsippany, N.J., reinforces the health message to its work force using a subscription publication on health tips that is mailed to all employees’ homes. Companies can customize the publications with their own names and logos.

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Laws of Economics

Not all contractors agree with the "in-your-face" philosophy. Bateman-Hall, an Idaho Falls, Idaho, general contractor, considers "lifestyle" guidance an infringement on employee privacy. "We don’t want to be too pushy," says Aaron Johnson, controller.

But Bateman-Hall and other Idaho contractors are taking a more active role in educating workers about prescription drug costs. The state Associated General Contractors moved from a co-pay system for drugs to a percentage payment. Employees pay 10% of the cost for generic drugs but 50% for a brand name. "An employee might pay $2.97 for generic but $100 for the brand," says Michael Gifford, chapter executive director. "It’s important that people behave according to the laws of economics."

Larger contractors lower costs by self-insuring. Atlantic Builders Group, an open shop firm in Baltimore, would pay 30% more than it does now if it did not self-insure, says Eric G. Regelin, president. Atlantic splits costs 50-50 with employees and eliminates the "fudge factor" that insurers add to premiums, he says.

In Alabama, contractors are so busy that they must offer good health coverage to attract and keep employees. "If we did not, we wouldn’t have workers," says Jim Ard, president of Ard Contracting, Birmingham. Still, the company must ask its employees to pay an ever-increasing share of the premium. Click here to view chart

Ard covers all but $5 a week for single employee coverage and two-thirds of the monthly premium for families. But that still leaves about $400 a month for an employee to pay and some are declining family coverage. "Paying a $4,000 premium out of $25,000 in annual wages is a huge percentage," says Ard. As costs rise, he expects more employees to opt out.

Doing the Right Thing

Firms, too, feel the pinch. "It’s killing us," says Eric Highley, executive director of AGC of Kentucky. Several contractors left the state last year, citing the high cost of health care in the prevailing-wage state, he says. "It’s driving small companies to the point of discrimination. They will take care of the office staff but not all of the hourly wage employees," he says. "Firms only pay for the best ones."

With insurance premiums up 30% last year in Kentucky, the state legislature set up a high-risk pool. But the irony of the new law is that small businesses can’t use it, says George Bender, executive director of the Kentucky Engineering Council. "That involved not very pretty politics," he says.

But not all firms are reducing bene-fits or shifting costs to employees. One young open shop electrical subcontractor pays the entire family premium for all of its employees on the job for three years. "It’s not a matter of the bottom line for us," says the firm’s controller, who asked not to be named. "It’s just a matter of doing what is right."

ontractors are trying everything to keep health care costs under control, from raising deductibles to educating workers. But with premiums rising up to 25% a year, most have lost hope they can keep cost hikes in line with inflation. The goal is simply to return increases to single digits again.