Roofers and Health Insurance: Why So Many Remain Uninsured

By Suzanne Potter, Freelance Writer for RoofersCoffeeShop.

Roofers, and construction workers in general, are less likely than many other professions to have health insurance.

With an ongoing labor shortage in construction, roofing professionals are looking at what can be done to attract more labor to the roofing industry.  One key area that every job seeker is looking for is health care.  But according to a study by the consumer website Zippia.com, roofing is one of the least likely professions to have health insurance, claiming that only 50.5% are covered. Although these stats may have been affected by the Affordable Care Act in recent years, it is clear that roofers, and construction workers in general, are less likely than many other professions to have health insurance.

The exact numbers are hard to pin down because the U-S government doesn’t break down the statistics specifically for roofers. However, the Employee Benefits Survey from the U.S. Bureau of Labor Statistics shows that 54% of workers in construction, mining, farming, fishing, and forestry participate in their employer’s sponsored medical plans. George I. Long, an economist with the National Compensation Survey at the Bureau of Labor statistics says the data also show that 65% have access to an employer-sponsored medical plan, but only 54% choose to participate.

No matter the exact number – the fact remains that a sizeable percentage of roofers lack full health insurance coverage.  The B-L-S Employee Benefits Survey from March 2017 shows that 88 percent of white-collar management workers are offered health insurance at work, and 86 percent of them actually take the coverage. When you look at civilian workers overall, the data shows that 71 percent are offered insurance at work and 82 percent of them take the coverage.  The ACS estimates that 9.8 million Americans are employed in construction, and 90% are men.

Jeffrey Moxley is an insurance agent and expert in employee benefits with Furman Insurance in Pompano Beach Florida, which specializes in heavy construction with an emphasis on roofing.  He says many roofers lack insurance because the majority of roofing companies are small, with fewer than 50 employees, and thus they aren’t required by law to offer coverage. Smaller contractors tend to have thinner margins, so they have a hard time paying part of the premiums for their employees. In addition, insurance costs are generally higher for smaller companies - whereas large employers benefit from the economy of scale.  Moxley estimates that small group health insurance is 25-30% more expensive than large group policies.

The Affordable Care Act (ACA) requires large contractors to provide coverage that meets the standards of the health law and can deduct up to 9.5% of an employee’s hourly wage to pay for it.  Moxley says, “Some of these roofers, when it comes to their take-home pay, are fairly reluctant to have a whole lot taken out of their paycheck… because it might be detrimental to their budget. A substantial amount of them are being offered the insurance, but they just aren’t taking it because of the cost.”

Moxley also says he hears from a lot of people who are confused about the high deductibles and out-of-pocket maximums in many insurance policies, which for some can outweigh the perceived benefits. He estimates that about 25% of roofers also have the option to buy into their spouses’ health insurance.

The Trump administration released new rules allowing trade groups like the National Roofing Contractors Association, as well as groups of small businesses and the self-employed to band together to buy so-called “skinny” health insurance plans that offer fewer benefits at a lower price, because they don’t have to meet the minimum requirements of the ACA.

Tom Shanahan, Vice President of Enterprise Risk Management and Executive Education with the NRCA, says the new rules may provide an opening. “It would be a huge step in the right direction. I’m cautiously hopeful that the Department of Labor will yield some movement in that direction where we could offer something to our members.”  Shanahan says the NRCA doesn’t currently offer a health plan because the differing labor laws in each state make it an extraordinarily complex undertaking.  The NRCA did offer what’s called a captive insurance plan for about six years but suspended it a year ago.

There is some concern, however, among health care advocates who worry that these new “skinny plans” will leave people with little to no coverage if they have to be in the hospital for a long time or contract a long-term illness like cancer.  In addition, the fear is that only younger, healthy people will flock to those types of plans, which could by skew the risk pool by filling the larger insurance market with older, sicker people – and that is forecast to drive up costs significantly for everyone else.

People who don’t get insurance through their employer have to buy it on the open market, and costs there have been going up for years – and this year in particular because the administration stopped paying insurance companies to subsidize coverage insurance. In addition, many insurance companies have dropped out of the non-employer-paid market in the past ten years, citing thin profit margins.  That leaves a monopoly for the remaining companies, which has the latitude to command higher premiums.

Another factor may be geography. The Kaiser Family Foundation estimates that about 2 million uninsured low-income workers in the U.S. live in one of 17 states that did not expand Medicaid. Those states include Florida, Texas, North Carolina, Alabama, Georgia, Idaho, Kansas, Mississippi, Missouri, Nebraska, Oklahoma, South Dakota, South Carolina, Tennessee, Utah, Wisconsin and Wyoming.  These workers fall into a coverage gap because they make too much to qualify for Medicaid but not enough to qualify for subsidies aimed at helping middle-income families afford private insurance.

Moxley estimates that if a worker doesn’t qualify for subsidies, he or she can expect premiums to range from about $300 to $700 a month, depending on a person’s age and zip code.

Shanahan remains optimistic that lawmakers will eventually hammer out a deal to improve access to health insurance, saying, “I think in the next ten years it will improve. There is a need for it, there is a desire for it. Doing it of course is messy, but there is so much need to offer health care and to attract workers that the synergy of those two things I really believe will yield positive results.”

Lisa Pate, executive director of the Florida Roofing and Sheet Metal Contractors Association (FRSA), noted that FRSA offers a worker’s comp fund, a credit union, financing for equipment loans and banking - and runs an educational foundation to offer continuing education credits so people can keep up on their licensing.  She says the FRSA does not run a health plan, but they do have partnerships called affinity programs, that offer liability and health insurance through third party administrators like Colonial Life and AFLAC.

Pate says that high turnover in the construction industry is another big reason why so many roofers lack insurance. Many workers don’t stick with one company long enough to qualify for insurance.  In addition, some workers are undocumented and can’t get subsidies through the federal ACA marketplace. Many live paycheck-to-paycheck, unable to afford policies on the open market.

However, many experts say the tight labor market may swing things in the roofer’s favor. Right now, there are more open jobs in this country than there are job seekers. And companies understand that they have to offer insurance benefits to attract employees and keep them.

For more insight on trends that are influencing the roofing industry please visit our Roofing Influencers page.