The construction industry is divided over the landmark health care bill approved by the Senate on Dec. 24, primarily because of a provision that would require small construction industry employers to provide health insurance to employees. Employer groups like the Associated General Contractors and the National Utility Contractors Association (NUCA) say the measure would stifle growth and make it harder for small businesses to survive, particularly during difficult economic times. Labor unions, on the other hand, say the provision, sponsored by Sen. Jeff Merkley (D-Ore.), fixes a loophole that would have exempted most of the construction industry—largely made up of small firms—from being required to provide coverage.

The Democratic leadership, including Senate Majority Leader Harry Reid (D-Nev.), center, were jubilant after the Senate voted to approve the $871-billion health care reform bill early on Christmas Eve.
Photo: AP/Wide World
The Democratic leadership, including Senate Majority Leader Harry Reid (D-Nev.), center, were jubilant after the Senate voted to approve the $871-billion health care reform bill early on Christmas Eve.

The Senate passed the legislation to overhaul the nation’s health-care system early on Christmas Eve by a party-line, 60-39 vote. The focus now will turn to the negotiations between Senate and House conferees to reconcile the newly passed Senate bill with the version the House cleared in November. That compromise would then require passage by the full House and Senate.

After the Senate approved the $871- billion measure, lawmakers said the final bill that emerges from their talks with the House would have to remain close to the version that cleared their chamber. They noted the Senate’s 60-vote majority for the bill represents a carefully crafted, but fragile, compromise.

When House and Senate negotiators begin in coming weeks to hammer out a final compromise version, construction groups will be paying close attention to negotiations over the Merkley amendment, which is in the Senate’s bill but not the House version. The measure would require construction firms with six or more employees and a payroll of more than $250,000 to provide health-insurance coverage for workers or pay a penalty. For non-construction companies, the Senate bill sets the health coverage threshold at firms with 50 or more workers.

Merkley’s provision has strong support from some organizations, including the National Electrical Contractors Association and Sheet Metal and Air Conditioning Contractors National Association, whose companies tend to be unionized.

Lake Coulsen, executive director of government affairs for NECA, says the majority of its member firms have fewer than 10 employees but have been providing health coverage for years. “It is the right thing to do…they don’t see it as too much of a burden,” he says.

Moreover, “This isn’t going after the mom-and-pop operations,” Coulsen adds, noting the payroll threshold for requiring health coverage is $250,000. He notes, however, that the measure will be just one of several key issues lawmakers must hash out in conference. Others include whether or not to have a public option, which was stripped from the Senate bill.

Drawing Fire

“This is the right thing to do...It isn’t too much of a burden”
— Lake Coulsen, exec. director, Government Affairs, National Electrical Contractors Association

But the small-business language has drawn fire from other groups. Jeff Shoaf, AGC’s executive director of legislative and public affairs, says the Merkley amendment was a “dark of night” measure added late in the process. He says some lawmakers have told him they were unaware the language had been added to the bill until after the vote. He adds that he is hopeful the measure, which he views as “so far out of line” with what passed out of the House and committees in both chambers, that it will be stripped out in conference.

Lyle Schellenberg, president of Armadillo Underground Inc., Salem, Ore., and president of NUCA, says he thinks the measure, if enacted, would have a chilling effect on start-up businesses, which operate on a shoe-string budget and often cannot afford to provide health coverage. He says small companies would have to think “long and hard” before adding a sixth employee and triggering the coverage requirement.

Another provision that will have an impact on construction firms—if it is included in the final package—is language in the Senate bill that increases the threshhold at which construction and other high-risk industries are taxed for...