November 26, 2012
Benefit plans now a vital component of associations
Benefit plans administered by construction associations have come a long way since their launch more than 40 years ago as a way to safeguard non-union workers.
Since then, plans such as the B.C. Construction Association Employee Benefit Program (BCCAEBP) have provided assistance for union, non-union employees and managers.
It now covers more workers than union plans.
In B.C., benefit plans had their genesis in 1969, when the Vancouver Regional Contractors Association decided to create a plan.
The impetus? While a majority of construction workers had coverage under union benefit plans, managers, owners and office staff had no such protection, said Kevin Zakus, CEO of the BCCAEBP.
Today, more than 5,400 employees, working for more than 400 B.C. companies, have signed on.
Zakus said the beauty of the BCCAEBP is that coverage is available for the one-person company, such as an architect’s office, all the way up to companies with hundreds of employees.
However, the BCCAEBP is no longer the only major player.
“This is an extremely competitive industry,” he said.
Competitors include the general insurance industry and another B.C.-based programs offered by the Independent Contractors and Businesses Association (ICBA)
The ICBA’s first benefit plan was launched in 1976, one year after the ICBA was formed in the Kootenays by non-union contractors, who wanted to bid on government work.
To compete with unions, the ICBA offered a benefit plan for workers, company owners and managers, with a commitment to serve smaller companies, said Gord Stewart, president of Independent Contractors and Businesses Association Benefit Services (ICBABS).
Growth ensued and by 1986, the ICBA looked to Alberta and the Merit Contractors Association to develop a plan tailored for B.C.
In 1987, the ICBA introduced the Construction Industry’s Benefit Plan (CIBP) with standard or enhanced coverage.
But by 2005, the ICBA had to respond to employers’ calls once more.
“As we moved forward, benefit plans became more flexible. There’s a lot of diversity, more players and service providers,” Stewart said.
The one-size-fits all plan wasn’t for everyone.
Typical plan items include life insurance, extended health care, vision and dental care, disability and accidental death.
The ICBA launched Benefit Services to provide specialized benefit plans featuring in-demand items such as retirement programs and critical illness coverage.
Critical care illness insurance covers occupational injuries specific to the construction industry.
Both the CIBP and the ICBABS still exist.
The CIBP serves about 750 employers with 7,500 employees, while the more flexible ICBABS plan serves roughly 12,000 employees at 750 employers.
In Alberta, Stephen Kushner, president of Merit Contractors Association, recalled in 1986, when 15 contractors got together to better serve their open-shop workers.
Today, Merit handles benefit plans for 2,500 companies and 55,000 workers throughout much of Canada, with 40,000 in Alberta.
To join, companies must have at least three employees.
“Joe’s Plumbing and Heating can have the same coverage as the big companies,” Kushner said.
However, Merit’s initial priority was the creation of a portable hour bank.
“There was a huge need in the construction industry,” he said.
“Construction workers were going in and out of benefits due to the cyclical work. If the kids got sick in the right month, they might get coverage.”
Today, employees can take their hours from different employer, bank them and have full coverage for the entire year. When the total hours fall short, the employee can pay for extra coverage.
They can also move between provinces without penalty.
Some hour banks, such as the one offered by the BCCAEBP offer standard and enhanced options.
The amount that employees pay for their coverage is as varied as the plans.
At Merit, the employer must pay at least 50 per cent of the program, but some employers pay the whole shot, Kushner said.
Stewart noted that it’s important for employers to know exactly what the costs are for benefit plans.
“That’s how companies cost their jobs when they do a bid,” he said.
At the ICBABS and the BCCAEBP, about half of the employers pay full premiums.
Increasingly, plan flexibility is growing more important as workers age or as the demand for family assistance benefits grow.
“Our people are getting older. They’re moving into retirement, but they want to work part-time,” Stewart explained.
Not long ago, when people retired, benefits usually disappeared.
But, in today’s market, benefit plans for retired workers now include health, dental and travel coverage, Stewart said. Benefit plans can even cover temporary foreign workers.
However, there are some challenges.
The rising cost of drug coverage is a huge concern and a matter that has to be addressed, Zakus said.
Another financial issue is expensive, ever-developing medical treatments to extend life, Stewart noted.
He thinks that public dialogue between insurers, government and employees may be necessary.
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