DENTAL AND VISION: SMALL PER HOUR, ON EVERY HOUR.
Dental and vision are usually voluntary add-ons to a health plan or separate plans of their own. The carrier bills a fixed premium per enrolled employee per month, and the employer pays all of it or a share, with the employee paying the rest through payroll deductions. Next to workers comp and health insurance the cost per hour is small, but it applies to every enrolled employee for every month, including slow months and weeks with few billable hours. Put the employer share in the burden rate by labor class, divide by the hours that employee is expected to charge to jobs, and treat the office share as overhead.
A cost of a few cents per hour is easy to leave out of a bid, and when it is left out the company pays it from margin on every job. This page covers how the employer share works, where it belongs in the burden stack, how to split it by labor class and how a change in crew size changes the bid.
WHAT IT MEANS.
Dental and vision benefits are employer-offered plans, usually billed as a set premium per enrolled employee per month, whose employer-paid share is part of the labor burden on the hours that employee works.
Plan rules, tax rules and state law differ, and the carrier's contract controls what is covered and who is eligible. A licensed broker or benefits advisor places the plans, and the owner checks with the plan advisor and a tax professional on anything about eligibility, payroll deductions or taxes. This page is about how the cost moves through the books and the bids.
HOW THE COST WORKS.
A fixed bill per employee per month
Carriers usually bill dental and vision as a rate per enrolled employee per month. The rate may change with the coverage tier, such as employee only or employee plus family, and the invoice follows the enrollment list. If an employee is enrolled on the first of the month, the premium is due for that month whether the employee works 200 hours or 80. The cost follows headcount and calendar months. It does not follow job hours.
Employer share and employee share
Terms differ by plan and by company. Some employers pay the full premium for the employee and ask for a contribution to cover dependents. Some split the premium by a percentage. Some offer the plan and let the employee pay all of it through payroll deduction, which leaves the employer with little or no cost beyond administration. Only the employer-paid part belongs in the burden rate. The employee-paid part is a payroll deduction, and it should clear through a liability account and not through job cost.
Where it is in the burden stack
Labor burden is every employer cost beyond the wage. Payroll tax and workers comp are priced as a percent of payroll, so they rise with the wage. Health premiums are a dollar amount per employee. Dental and vision are the same kind of cost as health, at a lower amount. The Bureau of Labor Statistics measures benefit costs this way in its Employer Costs for Employee Compensation series: the employer's annual cost is divided by hours worked to give a cost per hour. Health insurance is a line inside the insurance category of that series, and dental and vision are not itemized separately in it.
Eligibility decides who counts
The plan document sets who is eligible. It may require a minimum number of hours a week, and it may start coverage after a waiting period, such as the first of the month after a set number of days from the hire date. Seasonal and part-time field employees may be outside the plan. The cost report should list the employees who are enrolled, with the start date for each, because the carrier bills on enrollment and not on payroll headcount. Dental-only and vision-only plans are treated as excepted benefits under federal rules, and they do not count as an offer of coverage for the employer shared responsibility rules, so they do not replace the health plan question. That question is covered on the health benefits pages.
Field hours and office hours need different homes
A field employee's dental and vision cost belongs in the labor burden on jobs, because the employee's hours are charged to jobs. The estimator, project manager, bookkeeper and owner often charge no hours to jobs, so their benefits cost belongs in overhead. If the cost of all benefits is spread over all payroll hours, the field hours are undercharged and the overhead rate is understated by the office share.
Prevailing wage jobs
On public work with prevailing wage rules, a bona fide plan paid for by the employer may count toward the required fringe benefit rate, and the rules on what counts differ by program and by plan. A contribution the employer must make under other law does not count. The hourly amount credited depends on how the plan is funded and how the hours are counted, so the owner checks the plan with the advisor before pricing a bid on the credit. The prevailing wage fringe page covers the cash side.
WHAT IT LOOKS LIKE IN DOLLARS.
Take a combined dental and vision premium of $60 per employee per month, with the employer paying 50 percent. The employer cost is $30 a month, or $360 a year. Over 2,080 paid hours that is $0.17 an hour. Over 1,800 productive hours it is $0.20 an hour. If the employer pays the full $60, the year is $720, which is $0.35 an hour on 2,080 paid hours and $0.40 an hour on 1,800 productive hours. These are invented round inputs, and the plan invoice gives the real figures.
The carrier bills for 12 months, and a field employee charges fewer than 2,080 hours to jobs after holidays, time off, training and shop time. At $0.17 an hour on paid hours, the job is charged for the cost of 2,080 hours but the company pays for 12 months of a person who bills 1,800. A bid rate of $0.17 recovers about $312 of that $360 from an employee who charges 1,800 hours, which leaves about $48 a year unrecovered for one person and about $720 for 15 people.
Use the $30 a month employer cost. A crew of 6 enrolled employees costs $180 a month, or $2,160 a year, over 10,800 productive hours: $0.20 an hour. Add 2 enrolled employees and the cost is $2,880 over 14,400 hours, still $0.20 an hour. The rate per hour holds when the added people enroll. It falls to $0.10 an hour on a crew where only half are enrolled, and the bid that used the $0.20 rate is overstated for that crew.
WHAT WE CHANGE.
SPM builds a payroll cost report with a benefits line for each employee: the plan, the enrollment date, the employer share and the employee share. The employer share is divided by that employee's expected productive hours and the result goes into the burden rate for that labor class. The employee share is checked against the payroll deductions so the liability account clears each month.
SPM sets the burden by class, such as foreman, journeyman and laborer, so one enrolled foreman does not raise the rate for an unenrolled laborer. The office staff's benefits go into the overhead pool, and the overhead rate is figured from that pool. See the labor burden page for the full stack.
Each year SPM reviews the plan invoice, the enrollment list and the employer contribution before the renewal date, and updates the burden rates and the open bids with the new numbers. Plan changes the owner wants to make go through the broker or benefits advisor, and SPM shows the cost of each option in cents per hour and dollars per year.
SPM keeps the benefit cost per hour as its own line in the estimating rates and not inside a single percent. When a crew grows, shrinks or changes who is eligible, the line is updated by class and the open bids are repriced. See the true cost of an employee page for the full per-employee build.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the books, the job costing, and the software. No payroll.
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