Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Stites & Harbison Law Firm : Green Building & LEED Litigation

Construction projects (new and renovations) within the health care industry will undoubtedly see growth in the upcoming years.  Indeed, MedCity New reports that the Nashville medical mart (pictured below) is close to signing 15 new leases for the the new project, a major renovation of the existing convention center.   According to Medical Construction & Design, "Total spending on hospitals and other healthcare buildings continues to increase steadily, driven particularly by rapid expansion in public healthcare construction."

Not only does construction affect the health care industry, but health care affects the construction industry.  When Congress passed the new health care laws in March, it included some major provisions that will be "phased in" for the next few years.  According to the USA Today report, here are some of the provisions that may affect your construction company:

• Business tax credit: Effective now, small business with no more than 25 employees can receive a tax credit to help provide insurance to employees.  The credit will be up to 35% of the employer's contribution if the employer pays 50% of the total premiums.
• Retiree insurance coverage:  The government has included a $5 billion reinsurance program to allow employers to provide health coverage to those retirees over the age of 55 who are eligible for Medicare.
• High risk insurance coverage:  The government has also included a $5 billion temporary insurance pool for high-risk cases to provide coverage to individuals with pre-existing medical conditions or who have been uninsured for at least six months.
• Potential increased premiums:  Based upon three key provisions, there will be a likely increase in your insurance premiums to account for the additional coverages.  These provisions include: (1) insurance companies are barred from denying coverage to children who have pre-existing medical conditions; (2) insurance companies must provide coverage for dependent children up to the age of 26; and (3) insurance plans are prohibited from placing lifetime limits on how much they pay out to individual policy holders.

There are numerous other provisions taking affect in 2011 that may increase the premiums for your employees as well.

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On December 24, 2009, the United States Senate voted to pass its own version of the health care package.  You have probably heard cries about the length of the bill (1,990 pages).  You have probably heard the cries about the costs.  But have you heard about an amendment that may significantly affect the construction industry?

According to a letter from the Associated General Contractors of America to Senator Mitch McConnell (pdf), the bill is non-workable and unnecessarily targets the construction industry.  The AGC opposes the health care package because of the complexity of the plan, the cost-shifting (rather than the cost- reductions), and the likelihood that it will increase insurance costs for those construction businesses that provide insurance to their employees.

Even worse, according to the AGC, is an amendment drafted by Senator Jeff Merkley (D-Or) and inserted into the bill by Majority Leader Harry Reid (D-Nev.) that would exempt the construction industry from the small business exemption that was included in the original bill.  According to another letter from the AGC to Senator McConnell (pdf), this would cripple small construction businesses:

For all other industries, H.R. 3590, exempts employers with fewer than 50 employees from the fines levied on those who cannot afford to provide their employees with the federal minimum standard of health insurance. However, the Manager’s Amendment alters the exemption so that it singles out small businesses in construction for special punishment by applying the exemption to only those firms with fewer than five employees in the construction industry. . . . The 50 employee threshold was meant to exempt smaller firms, [and] this amendment will unfairly punish small construction contractors.

There remains considerable debate about the effectiveness of the health care package.  The introduction and consideration of the Merkley amendment is a reminder for all industries to do your homework as Congress enacts laws that may affect, both directly and indirectly, your company.

Photo: Flickr | pixelle54

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