search
cart
facebook twitter linkedin youtube instagram Spotify Podcasts Apple Podcasts Spotify Podcasts Apple Podcasts
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • TOPICS
    • Cool Roofing
    • Event News
    • Latinos in Roofing
    • Low Slope
    • Legal
    • Metal
    • Project Profiles
    • Roofing Supply Pro
    • Roofing Safety
    • Steep Slope
    • Sustainable Roofing
    • Technology
  • EXCLUSIVES
    • Best of Success
    • Contractor Profile
    • IRE Show
    • Roofing Contractor of the Year
    • Top 100
    • Young Guns
    • State of the Industry
    • Century Club
  • MULTIMEDIA
    • Videos
    • Podcasts
    • Interactive Spotlights
    • Roofing Quizzes
    • IRE Videos
    • Webinars
    • Photo Galleries
  • PRODUCTS
    • New Products
    • Featured Products
  • COLUMNS
    • Editor's Note
    • Exit Planning
    • Legally Speaking
    • Safety Advice
    • Technical Details
    • Guest Column
  • EVENTS
    • International Roofing Expo
    • Webinars
    • Best of Success Conference
    • Industry Events
  • DIRECTORY
    • Associations
    • Distributors
    • Manufacturer/Supplier
    • Business Services
    • Get Listed
  • MORE
    • Roofing Contractor eNews
    • Techos y Más Advisory Board
    • RC Store
    • Roofing Supply Pro
    • Custom Content & Marketing Services
    • Market Research
    • Sponsor Insights
    • Company Spotlights
    • Classifieds
      • Auctions
      • Business For Sale
      • Business Opportunities
      • Equipment For Sale
      • Positions Available
      • Products
      • Safety
      • Software
      • Services
      • Training
    • Contact Us
  • EMAGAZINE
    • eMagazine
    • Advertise
      • Media Kit
      • Editorial Calendar
      • Contact
    • Archive Issues
  • SIGN UP!

The Affordable Care Act in the Construction Industry

By Trent Cotney
constrution
December 5, 2012

With its enactment in March 2010, the Patient Protection and Affordable Care Act (PPACA) became one of the most polarizing pieces of legislation in recent history. Regardless of whether you abhor the legislation or fervently support it, the Affordable Care Act is here to stay for the foreseeable future. Although legally challenged, the United States Supreme Court’s decision on June 28, 2012 in National Federation of Independent Businesses v. Sebelius upheld critical portions of the Act.

The Supreme Court held that Congress does not have the power to enforce the Act under the Constitutional right to regulate interstate commerce, but Congress does have the power to enforce the Act under the Constitutional right to impose taxes. However, the part of the Act requiring states to expand their Medicaid programs to cover low-income single persons or child-less couples was struck down. States may elect to expand their Medicaid programs to include more of their citizens, in return for more federal funding.

Although most have a general understanding of the Affordable Care Act, many contractors and construction professionals do not understand the effect it will have on their businesses. The purpose of this article is not to address the legitimacy of the Act or espouse political opinion but rather to focus on the implications the Act will have on the construction industry in the near future.

Many provisions of the Affordable Care Act have already gone into effect with other provisions being phased in over the next three years. As state administrative agencies begin to implement the policies, construction companies will have to re-examine their current health care plans to determine whether or not they will be penalized under the Act.

The biggest problem that contractors may face is the risk of higher costs associated with providing group coverage. Contractors that currently provide health care coverage through a group policy may encounter increased costs associated with the policy due to provisions of the Act. Although the articulated assurance suggests that the Act forces insurers to lower the premiums through marketplace competition, it is more likely that employers will reduce coverage or develop other strategies when faced with increased costs.

Beginning in 2018, construction companies that provide what are commonly referred to as Cadillac Plans for employees may face an excise tax on the excess amount of coverage provided, if the coverage exceeds $10,200 for individuals and $27,500 for families. These companies will not be able to discriminate and provide certain employees with top-tier Cadillac coverage while others receive a lesser form of insurance. The same coverage must be provided to all employees regardless of cost. Between now and then, employers can modify their plans so that this excise tax will not apply.

Another problem faced by larger construction companies starting in 2014 is the assessment of penalties if adequate health care coverage is not provided. A large employer is defined as an equivalent of 50 full-time employees, of which 30 must be full-time with the remaining workers consisting of part-time employees. Large employers that do not offer health benefits coverage at all may be required to pay an assessment of $2,000 per year for each full-time employee, excluding the first 30 full-time employees. Larger employers that do offer health benefits coverage that is unaffordable or lacks minimum value may be assessed a payment of $3,000 per year for each full-time employee receiving federal financial assistance. However, this payment cannot exceed the assessment the business would pay if it did not offer health care coverage.

Smaller construction companies may be eligible for tax credits if they offer medical coverage to employees. Unfortunately, eligibility for the tax credit is incredibly limited, with the Act providing that it applies only to small businesses, which is the equivalent of 25 or less full-time employees. Additionally, the small business will need to cover at least 50 percent of their single (not family) employees, and those specific single employees covered will need average annual wages of less than $50,000.

The Act also establishes a variety of additional programs or access to previously formed programs. For example, construction companies that provide health insurance coverage for retirees between the ages of 55 and 64 may be eligible for reimbursement of 80 percent of the medical coverage costs through the Early Retiree Reinsurance Program. In addition, construction companies with less than 100 employees can shop for insurance in the Affordable Insurance Exchange, which is a new marketplace that each State maintains individually for low-cost insurance providers to offer services. The Small Business Health Options Program, or SHOP, is designed to allow smaller business access to the high levels of coverage that larger corporations are able to obtain for their employees for similar costs.

Theoretically, the Act does make it easier to obtain affordable coverage for spouses and children by allowing children to stay on family plans until they are 26, and providing coverage to adults and children with pre-existing conditions. In addition, insurers will be required to cover certain screenings and preventive care as part of their coverage. On January 1, 2014, the Act also provides that insurers may no longer cap the amount of benefits by dollar limit and are required to provide benefits regardless of spending.

The Affordable Care Act is incredibly complex and has not been fully analyzed or explored through legal decisions. It is entirely possible that additional portions of the Act or the methods in which it is implemented may still be found unconstitutional. Construction companies would be wise to consult with their insurance agents to determine the best course of action. For more information on the Act, please go to www.healthcare.gov.

 Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.  

KEYWORDS: employee relations taxes

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Trent cotney
Trent Cotney is a Partner with Adams & Reese and a Florida Bar Board Certified Construction Lawyer, licensed to practice in multiple states across the U.S. and in Canada. With nearly 25 years of experience, Trent has dedicated his career to serving the construction and roofing industries. He is a zealous advocate for the international commercial roofing sector and serves as general counsel for over 10 prominent trade associations and organizations, including the National Roofing Contractors Association (NRCA), Florida Roofing & Sheet Metal Contractors Association (FRSA), National Slate Association, Roofing Technology Think Tank (RT3), and Western States Roofing Contractors Association (WSRCA). Trent’s commitment to the industry extends beyond legal counsel; he is an active participant in education, advocacy, and innovation, working tirelessly to address the challenges contractors face and advance the industry as a whole. Known for his deep understanding of construction law and unwavering dedication, Trent Cotney remains a trusted advisor and leader in the roofing community.

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Roofing Contractor Group Publisher Jill Bloom

    Physics, the Power of Authenticity and You

    In February's Publisher's Note, Jill Bloom describes a...
    Columns
    By: Jill Bloom
  • The Family Food Fare supermarket in Midland, Mich.

    ‘Rooftop Ninja’ Discovered Living on Roof, Inside Grocery Sign

    A bizarre tale out of Midland, Mich.: a woman dubbed the...
    Roofing News
    By: Bryan Gottlieb
  • A before and after heat measurement comparison

    How Hot is Too Hot in the Attic?

    If the ventilation is working, how hot should the attic...
    Steep Slope Roofing
    By: Paul Scelsi
You must login or register in order to post a comment.

Report Abusive Comment

Manage My Account
  • eMagazine Subscription
  • Sign Up for the eNewsletter
  • Online Registration
  • Manage My Preferences
  • Subscription Customer Service

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Roofing Contractor audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Roofing Contractor or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  • TAMKO Titan XL Shingles
    Sponsored byTAMKO®

    Built for Business: How Titan XT® Shingles Keep Proving Their Value

  • An overhead view of a residential block
    Sponsored byCBIZ CompuData

    From Spreadsheets to Strategy: How Roofing Companies Can Transform Financial Operations

  • Snow Guard Solutions for Metal Roofs by S-5!
    Sponsored byS-5!

    Safeguard Your Building: How Snow Guards Prevent Costly Roof & Property Damage

Popular Stories

The Home Depot is weighing a bid for GMS. The potential offer would pit the retail giant against QXO Inc.

UPDATE: Home Depot Pushes QXO Out of GMS Pursuit

Brad Jacobs, chairman and CEO of QXO, offers $5 billion to acquire GMS, a major distributor of gypsum and interior building products.

QXO Sets Its Sights on GMS in $5 Billion Offer

Undocumented workers make up 36% of the U.S. roofing workforce, leaving contractors and workers alike especially vulnerable.

Roofing is Left Exposed by Trump’s Deportation Flip-Flop

Roofing Contractor Webinar

Events

December 3, 2025

The Premier Roofing Conference: Best of Success

Join roofing professionals from across the nation at the 2025 Best of Success conference, the ultimate destination for roofing professionals seeking the latest industry insights and networking opportunities. Pick up strategies for critical challenges like workforce shortage with innovative solutions, explore the latest advancements in roofing technology and sustainable practices, and gain valuable insights from industry leaders on navigating the evolving roofing landscape.

View All Submit An Event

Related Articles

  • state of the industry cotney 2021

    What the Roofing Industry Should Expect for 2021

    See More
  • State of the Roofing Industry

    Roofing Trends in 2025

    See More
  • The Chain of Responsibility: What Every Roofing Contractor Must Know

    The Chain of Responsibility: What Every Roofing Contractor Must Know

    See More

Related Products

See More Products
  • roofingpic.jpg

    Managing the Profitable Construction Business: The Contractor's Guide to Success and Survival Strategies

  • Green_roof_Systems.gif

    Green Roof Systems: A Guide to the Planning, Design and Construction of Building Over Structure

  • 9780128207918.jpg

    Eco-efficient Materials for Reducing Cooling Needs in Buildings and Construction 1st Edition

See More Products
×

Be in the forefront of the roofing industry!

Join thousands of professionals today. Shouldn’t you know what they know?

JOIN NOW!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing