Only Half of PMPs Offer Medical Insurance, due in part to rising costs

Cover Story: Show Me The Money - Cover Story: Show Me The Money

January 14, 2016
© Juanmonino |

Half of pest management companies provide medical insurance for employees, found the 2015 PCT-NPMA Compensation and Benefits Survey. Of those, nearly one-third paid 50 to 74 percent of plan costs to cover employees; 28 percent of respondents paid 100 percent, and 18 percent paid 75 to 99 percent of plan costs. Fifty-four percent of companies offering medical insurance require employees to pay dependent plan costs.

Medical insurance is automatic for the seven employees at Leupitz Pest Control in Salem, Ore., and is “probably the biggest benefit we have,” said Operations Manager Mike Hanscom. “That’s how we keep good employees.”

General Environmental Services pays 70 percent of employee coverage and won’t “allow a guy to work for us without” it, said Peter Wonson. Nor will the company pay employees covered by other plans a portion of the money it saves by not having to provide insurance. People get used to the extra money; oftentimes they won’t tell you if a spouse loses insurance, which means they’re not covered if something happens, he explained.

According to the survey, preferred provider organization (PPO) programs make up the majority (17 percent) of plan offerings. To be eligible for coverage, employees typically must work one to three months (52 percent).

Rising costs make this benefit the “Damocles sword over our heads,” said Phil Cooper of Cooper Pest Solutions, which is paying out “way above the industry benchmark.” In 2016 he hopes to reduce the number of people on the company policy, such as by encouraging spouses to sign up for insurance through their own employers.

Reliable Pest Solutions, which pays a larger percent of employees’ insurance costs each year up to five years, had rates jump 25 percent in 2015, said Mike Scholes. Over seven years the plan has gone from a $1,500 deductible with $20 co-pay to $6,000 deductible with no co-pay and costs doubled. Scholes said he’s lost workers to municipal governments that offer better coverage.

Tracy Rice of Rice Pest Control tried to provide health insurance for years but “it was never to be.” The company could not get enough employees to sign up so insurance companies eventually dropped coverage. Instead, “we try to compensate with more pay,” he said.

PMPs said they shop insurance plans yearly. “It’s brutal,” admitted Wonson.