Benefits for construction companies that run crews, not just an office
A general contractor, a specialty trade shop, and a small building firm can look similar on a headcount report and still run very different weeks. People move between job sites. The roster grows for a project and tightens when that job ends. Some of the people on site are your W-2 employees. Some are true independent contractors, or they work for another trade. Benefits have to follow that reality, not a brochure written for a single office.
Ares Benefit Group helps construction and contractor companies with about 2 to 50 employees choose a structure and stand it up: a group plan (including SHOP and, where available, a level-funded arrangement), an ICHRA, or a QSEHRA. We also set up the administration around it — Section 125 pre-tax deductions, group life and disability, and voluntary benefits.
We start with a roster, job-site locations, and a clear split between employees and independent contractors.
How construction companies actually staff
Most construction establishments are small. BLS data for March 2026 show 953,703 private construction establishments. Of those, 925,634 — about 97% — had fewer than 50 employees, and 871,890 had fewer than 20 employees. A benefits conversation in this industry is usually a small-employer conversation.
What that looks like in practice:
- Crews, not a single floor. Superintendents, operators, laborers, carpenters, and a small office staff may work at different sites in the same week. A group plan with a tight local network can frustrate people who are not always near the office. An ICHRA, where each employee buys individual coverage where they live or work, is often the other structure worth comparing.
- Project-based headcount. You may have 12 people in a quiet month and 28 when a job is fully staffed. Eligibility, waiting periods, and participation rules need to be designed for a roster that moves, not for a frozen census.
- Hours that are not all 40 and desk-bound. Some people are full-time on payroll. Others are part-time, weather-dependent, or seasonal in parts of the country. Part-time employee benefits are an employer design question, not a side issue.
- Owner-operators and working owners. Many firms this size are still run by a working owner who is also on the tools. Whether that person is an employee of the company, a partner, or a self-employed owner changes what they can receive under an ICHRA or a group plan. HealthCare.gov is explicit that CHOICE Arrangements (ICHRAs) are for employees, not for a self-employed business owner or that owner's spouse.
- More than one work site, and sometimes more than one state. A Tampa-based contractor may have a job in another Florida county this month and a crew in another state next year. See benefits for multi-state teams and, if the office is here, Tampa Bay employers.
W-2 employees and 1099 contractors
This is the distinction that causes the most trouble in construction benefits, and it is a tax and labor question first.
The IRS, not a benefits preference, decides whether a person is an employee or an independent contractor. The analysis looks at behavioral control, financial control, and the type of relationship. A W-2 wage, tax withholding, and the right to direct how the work is done usually point toward employee status. A true independent contractor typically controls how the work is done, can have other clients, and is paid without employment tax withholding.
That split matters because:
- Group health plans, ICHRAs, and QSEHRAs are for employees. You generally cannot put a true 1099 contractor on the company group plan, or fund an ICHRA or QSEHRA for that person, as if they were staff.
- Calling someone a contractor does not make them one. If the person is an employee under IRS rules, treating them as a 1099 worker — including trying to "solve" benefits by leaving them off the plan — is a classification problem, not a plan-design feature. We will not design a program that assumes a classification you have not actually established.
- You can still have a clean benefits plan when some labor on the job is contract labor. Benefits are designed for your employees: the superintendent, the W-2 crew, the estimator, the office manager. Trade partners and true independent subcontractors carry their own coverage.
If your roster is mixed, say so in the proposal form. We will build around the employees and leave classification questions for you and your tax advisor. This page is not a classification opinion.
Structures that often fit a 2-to-50 person construction firm
There is no single right plan for every contractor. These are the structures we actually compare.
A group plan, including SHOP. If you want one employer-sponsored medical plan for eligible employees, SHOP and other small-group coverage can be a fit. SHOP is generally built for small employers, commonly those with 1 to 50 employees, and has rules on offering coverage to full-time employees and on participation. In most states the participation rate is 70%, with a November 15–December 15 window when that rate does not have to be met. We reconfirm the current HealthCare.gov rules at enrollment, including Florida's, because states can change their rates. For a company with people in more than one state, HealthCare.gov describes two SHOP options: one plan based on the primary business site, or a SHOP plan in each state where you meet the rules.
A level-funded arrangement. Some small-group carriers offer level-funded funding, in which the company pays a set monthly amount. It is one way to sponsor group coverage. It is not automatically a better fit than a fully insured group plan, and we will not treat it as one. We compare it when it is available for your census, next to fully insured group coverage and next to an HRA, and we walk through the contract terms without steering you to either side.
An ICHRA. An Individual Coverage HRA — HealthCare.gov also uses the name CHOICE Arrangement — lets you set a budget and reimburse employees for individual medical coverage and other qualifying medical expenses, tax-free within the rules. Employers of any size can use one if they have at least one employee who is not a self-employed owner or that owner's spouse. You may offer it to all eligible employees or only to certain permitted classes, including full-time, part-time, or seasonal status; salaried or hourly; work location; a waiting period; a collective bargaining group; or a combination of those. That class design is often useful in construction: field crew and office staff, or people at different work sites, do not always need the same structure. Employees must have qualifying individual coverage to use the funds. You generally must give written notice 90 days before the plan year.
A QSEHRA. A Qualified Small Employer HRA is a smaller-firm version with an annual federal cap. For 2026, Publication 15-B and HealthCare.gov list those caps as $6,450 for employee-only and $13,100 for family coverage. To use a QSEHRA you generally must not be an applicable large employer and you must not offer a group health plan (including another HRA or a health FSA) to any employees. The arrangement is employer-funded only — no salary reduction — and is generally offered on the same terms to all eligible employees, with limited permitted variation by age and family size, and with limited permitted exclusions (including a 90-day service exclusion, employees under age 25, and part-time or seasonal employees). Employees need minimum essential coverage for reimbursements to be tax-free. Written notice is due 90 days before the year, and the permitted benefit is reported on Form W-2, box 12, code FF. If you already want a group plan, a QSEHRA is not the parallel option; look at an ICHRA comparison or at group coverage instead. See ICHRA vs QSEHRA.
Section 125. If employees will pay a share of group premiums, a Section 125 cafeteria plan — often a premium-only plan — is how those premiums can come out of pay on a pre-tax basis, when the arrangement meets the rules. A QSEHRA cannot be funded by salary reduction. Do not mix the two ideas.
Group life, disability, and voluntary benefits. Life and disability are often the benefits a crew actually notices when someone is hurt or dies, and they can be offered with or alongside medical coverage. Voluntary benefits can be offered so employees can add coverage they want to pay for themselves. We will not use health-condition targeting in that conversation, and we will not invent typical replacement percentages; those are product terms, not federal rules.
Recruiting and keeping people
Construction firms this size compete for people with other contractors, not with a national benefits slogan. A clear offer — what you contribute, who is eligible, when coverage starts, and what happens between projects — is more useful than a vague promise that you "offer insurance."
If your strongest people have been walking to firms that already contribute to coverage, that is a benefits conversation, not a slogan. If your work is project-based, say how eligibility works when a job ends and the next one has not started. If you use a waiting period, say so. If you fund an ICHRA at a set monthly amount, say the amount and what it can be used for.
We will help you write that offer in plain language once the structure is chosen. We will not invent retention statistics for this industry.
The tax credit, and the under-50 rule
Two federal tests get confused and should stay separate.
Under federal law, the employer shared responsibility rules are built around applicable large employer status, which generally looks at whether you had at least 50 full-time employees, including full-time equivalents, in the prior year. A contractor with fewer than 50, counting correctly, is generally not required by that federal rule to offer health coverage. Many still offer it to hire and keep people. If you are approaching 50, start with the requirement page early, because hours and seasonal staff affect the count.
Separately, you may be eligible for the Small Business Health Care Tax Credit if you have fewer than 25 full-time equivalents, pay average wages below the IRS inflation-adjusted limit, pay at least 50% of employee-only premiums under a qualifying arrangement, and (with limited exceptions) offer a qualified plan through SHOP. The maximum credit is 50% of premiums paid for eligible small business employers and 35% for eligible small tax-exempt employers, and it is available for two consecutive taxable years. It phases down as you get toward 25 FTEs or as average wages rise. For this credit, one FTE is generally 2,080 hours, which is a different counting method than the 30-hour applicable large employer test. Seasonal employees who work 120 or fewer days in the year are treated specially in the credit calculation. We will not quote a wage ceiling that is not in a finalized IRS source we are prepared to cite.
What to send us
A current employee list is enough to start: names or roles, dates of hire, hours, home and work states, and who already has coverage. Note who is W-2 and who you treat as 1099, and where the current jobs are. If the office is at or near 5701 E Hillsborough Ave in Tampa, say whether the crews are local, statewide, or in other states too.You do not need a polished spreadsheet.
Tell us about your construction team
Ares Benefit Group LLC5701 E Hillsborough Ave
Tampa, FL 33610
(813) 540-1299
admin@aresbenefitgroup.com
Our agents are licensed in all 50 states.
Frequently asked questions
Can I put my 1099 subcontractors on our group health plan?
A group plan is for eligible employees. A person who is a true independent contractor under IRS rules is not put on the plan as if they were staff. If you are unsure how someone should be classified, that question belongs with your tax advisor before we enroll anyone.
We have 8 office and field employees and we also use other trades on every job. Who counts toward the 50-employee line?
The applicable large employer test has its own counting rules, including full-time equivalents and aggregation of related companies. People who are not your employees do not become your employees because they stood on your job site. We will run the test from your roster, not from a gate list.
Our headcount swings with each project. Can we still offer a group plan?
Sometimes. Participation, eligibility, and waiting-period design have to match a roster that moves. If a group plan's participation rule is a poor fit for a swing in headcount, an ICHRA is often the structure we compare next. A QSEHRA can also be a fit when you are under the federal size cap and you are not offering a group plan.
The owner works in the field. Can the owner use an ICHRA?
Only if that person is an employee of the company under the rules that apply. HealthCare.gov states that CHOICE Arrangements are for employees, not for a self-employed business owner or the spouse of a self-employed owner. We will look at how the company is organized before we assume the owner is eligible.
Do we have to offer coverage because we are in construction?
No federal industry-specific mandate replaces the applicable large employer test. Many construction firms under 50 still offer coverage because it helps them hire. The tax credit, if you qualify, is a separate incentive, not a requirement.
We bid work in more than one state. Does that change the plan?
It can. A single group policy, SHOP options for multi-state businesses, or an ICHRA where each person buys coverage where they live are the paths we compare. Bring the states, not just the office address.