Construction & Trades

ICHRA for Construction Companies

Construction runs on project-based crews that scale up and down, a mix of W-2 employees and 1099 subcontractors, and physically demanding work with real injury risk. A traditional group plan built around a stable headcount rarely matches how a construction company actually staffs job to job.

The Problem

Why group plans struggle here

Group health plans assume a relatively fixed eligible population, but construction crews expand and contract with the project pipeline — a general contractor might run 15 core employees between jobs and 40 once a project breaks ground. Group participation minimums are hard to hit consistently when headcount moves that much, and many crews mix true W-2 employees with 1099 subcontractors, who aren't eligible for an employer's ICHRA at all — that distinction matters and is easy to get wrong. On top of that, the physical risk profile of the trades makes real health coverage more important, not less, even though it's often hardest to justify on a group plan's fixed premium.

The Fix

How Construction & Trades employers use ICHRA

Define a year-round core class (supervisors, equipment operators, office staff) separately from project-based field crew, without extending the same contribution to short-term project hires
No participation minimum to clear — useful when your eligible headcount changes with every new job that breaks ground
Coverage is portable for W-2 employees who move between employers in the trades, since it lives in the individual market rather than a specific company's group plan
Contribution amounts can be documented in a way that supports prevailing wage fringe benefit crediting on public contract work, when structured correctly

Sample Structure

What a class structure might look like

Every plan is designed around the specific business, but here's a representative starting point for construction & trades:

Employee class	Who's typically in it	Example monthly contribution
Year-round salaried/supervisory	Project managers, supervisors, office staff	$450–$600/mo
Full-time field crew (hourly)	Core tradespeople employed year-round	$300–$425/mo
Project-based/short-term labor	Hired for a specific job or season	Typically excluded

Figures are illustrative starting ranges, not quotes — actual contribution levels depend on budget, local plan costs, and ACA affordability requirements where applicable.

Worked Example

Example: a mid-size general contractor

A general contractor runs 12 year-round office and supervisory staff, with field crew size swinging between 20 and 45 depending on how many projects are active. The prior group plan's participation requirements were nearly impossible to satisfy consistently given how much the eligible population moved month to month. Under ICHRA, the contractor set a $500/month contribution for supervisory/office staff and $350/month for year-round field crew, while project-based hires stayed outside the ICHRA class entirely. The benefits budget became a fixed number tied to headcount in two stable classes, independent of how many active job sites were running.

Watch Out For

Common mistakes in construction & trades

Treating 1099 subcontractors as ICHRA-eligible — only W-2 employees can participate; misclassification here is a compliance risk independent of ICHRA
Assuming prevailing wage fringe benefit credit is automatic — the contribution structure needs to be checked against the specific public contract's crediting rules
Not tracking the 90-day notice requirement carefully when project-based hiring doesn't follow one clean annual cycle

Frequently Asked

Construction & Trades + ICHRA questions

Can subcontractors be included in our ICHRA?

No — ICHRA can only cover W-2 employees. 1099 subcontractors aren't eligible, regardless of how long they've worked with the company.

Does ICHRA work for a small contractor with under 10 employees?

Yes — there's no minimum headcount, which fits many small and mid-size construction businesses better than a group plan's participation requirements.

How does this interact with prevailing wage requirements on public jobs?

ICHRA contributions can potentially count toward fringe benefit obligations on prevailing wage contracts, but the specific crediting rules depend on the contract and jurisdiction — worth confirming with a broker before relying on it.