Health bill's potential costs worry some small builders

Coming off a year in which his remodeling and custom home-building company saw two-thirds less business and had to lay off nearly half its employees, David Crane hopes next year brings an economic turnaround.
But Crane worries about how much part of the health reform bill up for a vote in the U.S. Senate today might cost him and other contractors.

It requires construction firms with at least five full-time workers and annual payrolls of more than $250,000 to offer health insurance coverage to employees or face fines up to $750 per employee per year.

Crane Builders employs seven people, and the company had expected to be exempt from the requirement just like many other types of small businesses that only face the requirements if they had at least 50 full-time workers during the previous year.

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But U.S. Sen. Jeff Merkley, D-Oregon, added a lower threshold of five workers for the construction industry. The provision would take effect in 2014. Merkley sees the extra rules as a way to prevent small companies that didn't provide health insurance to workers from undercutting other bidders on construction jobs.

"It's for anyone going to that bidding table — to make sure that the playing field is fair," said Marc Siegel, a spokesman for Merkley. He said some trade groups, such as the National Electrical Contractors Association, support the measure.

But critics say the last-minute measure could boost costs for many small construction firms that are already reeling from losses caused by the recession. In the Nashville area alone, the construction sector lost about 5,000 jobs year over year, according to figures from the Bureau of Labor Statistics in November.

"It's just unfair to single out one industry to not exempt from it when they exempt every other industry in the world from it," said Crane, who pays half of his employees' health insurance costs.

Retailers also on edge

Nationally, a number of other businesses worry about what they see as extra burdens and higher costs from the health bill. Some hope to massage the massive legislation early next year during a final round of negotiations on Capitol Hill.

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