NECA TransmissionsNotes from the front lines of the electrical contracting industry

Health Care is Front and Center, Not on the Fringe

Posted on Feb 08, 2008 by John M Grau

Last week, NECA and the IBEW held their annual employee benefits conference. I couldn’t be there this year, but several NECA contractors and staff made the trip.

I remember in the late 1980s suggesting to then-IBEW Secretary Jack Moore that NECA and the IBEW jointly sponsor a conference dedicated to employee benefit issues. The management of local health and pension plans is a serious responsibility that consumes a large chunk of our plan trustees’ time. We needed a forum for sharing ideas and conveying the latest information on rules, regulations and plan management.

While the annual IBEW-NECA benefits conference has served some of that purpose, I think we can do better. Attendees have rightly criticized the conference program for promoting joint IBEW-NECA programs and sponsors too much. A number of NECA plan trustees have requested a conference of our own, in order to focus on current and emerging issues relevant to electrical construction industry plans. We’re planning such a meeting for years alternating with the NECA Labor Relations Conference – in other words, next year.

I think we all recognize that fringe benefits aren’t so “fringe” anymore. They’re a big part of our labor costs and a major factor in our struggle to complete with non-union costs. It doesn’t mean, however, that these benefit plans have to be an albatross hung around our necks. Properly structured and managed, our fringe benefit programs can be part of our competitive advantage. 

Health and pension plans can serve as a key component in attracting and retaining a qualified workforce. Most surveys I’ve seen show that most non-union electrical contractors offer some amount of health care coverage for their employees, though it usually isn’t the same high level of coverage offered by union employers.

And this is where we have an opportunity to be more flexible. The marketplace for employer-provided health insurance has changed dramatically in the last few years. Some of our plans are now offering tiered levels of coverage at varying costs. Some no longer pick up the whole premium for family coverage.

If a plan’s benefit level is structured correctly, then the advantages of a jointly managed healthcare trust come into play. Group-buying through the trust arrangement saves employers significantly, especially compared with individual-buyer options. And since the union is a part of the healthcare trust management, we find that the employees, through their representatives, are as interested in cost efficiencies as we are. 

If you’ve recently heard about U.S. auto companies turning over the responsibilities for their healthcare and pension plans to the unions, they’re basically trying to achieve this same level of shared responsibility. Rather than making direct contributions to the plan, the company puts a big chunk of cash into a trust fund that the union would manage. And instead of just bargaining for benefits and leaving the cost up to the employer, the unions would have a stake in efficiently managing the trust – and their own benefits. The auto industry may just now be figuring this out, but we’ve had it in the construction industry for years.

Suffice it to say that fringe benefits and their impact on our industry are at the top of our agenda at NECA. Our objective is to turn what many see as a problem into an opportunity.  It’s not an easy task to accomplish, but it is a vital one well worth pursuing.

As always, your thoughts and suggestions on this subject are encouraged.

 

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NECA Transmissions is a collaborative effort from CEO John Grau and NECA staff to provide insight and feedback on key issues from the front lines of the electrical contracting industry.

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