Group Plan Math for HVAC Shops With 5–12 Techs
If you own a residential or commercial HVAC business and you've lost a good tech in the last 18 months over benefits, this article is for you. We'll walk through the three group-plan structures available to a shop your size and what each actually costs against the retention math.
The three structures, side by side
ICHRA (Individual Coverage HRA)
You set a fixed monthly reimbursement per tech (say $400). Each tech buys their own ACA plan, you reimburse tax-free. Lowest admin load, highest flexibility. Best for shops with mixed family situations (some single, some family-of-four).
Level-funded group health
Looks like a fully-insured plan to your techs — fixed monthly premium, clean ID cards, a real carrier network. Behind the scenes, your shop bears partial claims risk, and if claims come in low you get a year-end refund. Best for shops with a young, healthy crew.
Traditional fully-insured group
Predictable monthly premium, no claims risk, full carrier admin. Best for shops with 10+ techs and at least one employee with chronic care needs (where level-funded would underwrite at a penalty).
Real cost comparison — 8-tech shop
Why this pays for itself
- Average cost to recruit + train a replacement journeyman: $15,000–$30,000.
- Average tenure increase when group benefits are offered: 1.8 years.
- If group coverage prevents one departure in the year, the plan is net-positive — even at the fully-insured tier.
The Section 125 piece nobody mentions
Pair your group plan with a Section 125 Cafeteria Plan and your techs pay their share of the premium with pre-tax dollars. That cuts your payroll tax on the employee contribution side — usually $1,500–$4,000/year in shop savings for an 8-person crew, on top of the retention benefit.
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