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Read the amendment (pdf, page 76)

Heil Electric has provided employee health benefits for more than 50 years, said Stan Heil, a principal with the Portland electrical company. Some of his competitors don’t, he said.

“In about two hours, six of my competitors on a job I’m bidding don’t provide any benefits,” Heil said. His options: either get by with less profit or lose the bid.

An amendment to the federal health care reform bill could change that by requiring even small contractors to provide health benefits to their employees. Sen. Jeff Merkley, D-Ore., added the amendment, which was written earlier, to the bill on Sunday.

Merkley’s amendment would require construction companies with five or more employees, and at least $250,000 in annual payroll expenses, to provide health benefits to their workers. Companies in other industries only need to provide health benefits if they employ 50 or more employees.

Without the amendment, the health care bill would give even more incentive for contractors to drop their insurance, Merkley spokeswoman Julie Edwards said. The bill creates health-care credits to make insurance cheaper for uninsured people, she said.

Company officials trying to put in the lowest bids might drop their insurance coverage if employees have taxpayer-funded credits to fall back on, Edwards said. “We don’t want the credits to end up causing someone who has insurance to drop it because of the competitive environment,” she said.

The amendment won’t make bidding fairer, counters John Killin president of the Pacific Northwest Chapter of the Associated Builders and Contractors. Instead, it will hurt already struggling small businesses, he said.

“Most employers provide health care whenever we can,” Killin said.

When the economy weakens, some small employers are forced to cut health care plans just to stay in business. “If you can’t cut benefits, that means you’re laying people off or shutting your doors,” he said.

“Many people think of contractors as extraordinarily wealthy people, so why can’t they afford this?” Killin added. “The reality is, they’re losing their shirts.”

Killin also questioned the amendment’s singling out of construction and not other industries. Edwards said that’s because the bill would otherwise have a loophole big enough to enclose nearly all contractors.

Construction is unique in that even large companies have few permanent employees, with a labor force that varies from job to job, Edwards said. “In the construction industry, the vast majority of it is comprised of small firms

“Virtually the entire industry would have been exempt.”

Exempting contractors from a requirement to buy insurance doesn’t mean they wouldn’t pay in other ways, said Heil, who is the local chapter president of the National Electrical Contractors Association. When employers don’t pay for insurance, everyone else picks up the cost through higher premiums and increased use of public services, Heil said.

“Those same employees show up at emergency rooms or other medical facilities.”

Killin said the medical argument for the amendment is secondary to the political one: it would help union shops compete better. Union contractors pay for benefits as part of project-specific labor costs, he said, instead of as an annual expense.

“As soon as the job’s over, (union contractors) send their guys back to the hall,” he said.

“We try to keep our guys year ‘round.”

The amendment passed a procedural vote early Tuesday as part of the full health care reform bill, Edwards said. The Senate is on track to vote on the bill’s final passage late Thursday.