Depending on the number of employees your company has, offering group health insurance may be an option or a requirement for you. If under 50 Full-Time Equivalents, it’s an option. Above that number, it’s a requirement. Non-Union contractors who perform Prevailing Wage work have a distinct advantage in the area of group health insurance that every other industry wishes they had. What’s the advantage you might ask? Good question. First, the more Prevailing Wage work you do, the better your advantage becomes. The answer is, you convert a number of Fringe Dollars into premium per hour towards insurance premium. Since Fringe Dollars are defined as “Employer Payments” by the DOL and State Law, these dollars serve as the employer share of the premium. That’s right, if you are a contractor who performs 100% Prevailing Wage work, you as the employer do not have to come up with additional company dollars to satisfy the employer contribution requirement for group health insurance. The Fringe Dollars are already provided to you for this purpose.
If you are a contractor who has 50 or more Full-Time Equivalent employees, then this benefit is even sweeter because it’s not you imposing health insurance on your field workers. It’s the Federal government who is doing that for you. Every employer who is not in the Prevailing Wage construction industry has to come up with the minimum employer contribution towards every employee’s coverage. This is a basic rule for group health insurance. Your employer contribution comes from the fringe dollars on the wage determination. These are “Employer Payments” for the benefit of your field employees.
Fringe Benefit Experts will help you craft a medical plan best tailored for your company. Whether that is in the direct to carrier small or large group market or through an industry-specific group medical trust, we can help.
The principal of Fringe Benefit Experts, Steve Kuzmack, is appointed with every carrier and Covered CA in the State of California. He also is a broker for contractor medical plan trusts. This puts him in the unique position to draw from both markets to find the best fit for your company at no additional cost to the contractor.
Are you a contractor doing Davis Bacon and/or State Prevailing Wage work and considering health insurance for you and your employees?
Did you know that if you are a contractor where a majority of your work is prevailing wage and if you are paying all the fringe dollars on the worker’s paychecks that you are effectively paying the entire cost for medical insurance for your workers right now? So, where is the coverage you ask?
Or, are you a contractor doing some amount of Davis Bacon or State Prevailing Wage work who already provides health insurance for your employees, or would like to, through one of the major medical carriers? If so, are you using the fringe dollars of the prevailing wage to help pay the employer share of the premium? Not sure?
We’ll show you the proper medical crediting methods of using the fringe dollars of prevailing wage to help pay the employers share of the medical insurance premium. You will then avoid payroll taxes and workers compensation premiums on a portion of the employer share of the health insurance premiums depending on the amount of prevailing wage work you do.
In addition, if you are a contractor who primarily does Davis Bacon or State Prevailing Wage work, then you should consider a bona fide medical trust for your company health insurance. A bona fide medical trust offers large group composite rates instead of small group age-banded rates. Depending on your employee population and census, you could see significant premium savings and/or benefit improvements using a trust. There are many trusts to choose from across the nation so ask us for an independent comparison of these trusts.
Contact us for quotes from all the major carriers and learn the proper payroll crediting methods for health insurance premiums.