A, B General Licensing & RME

Surviving the downturns in our economy is never easy. Contractors, like everyone else, are seeking creative ways to keep their benefits affordable. As the economy ebbs and flows, businesses must sometimes look into new ways to meet the needs required to continue working in this new reality…

Q: My husband and I have really struggled with paying for health insurance. Up until October of last year, we were paying for group insurance through Blue Cross because we were in a partnership with another building contractor and were able to get a small group rate. The partnership dissolved, and now we are trying to figure out how to continue getting that less expensive group rate.

My husband has been licensed for over 30 years (he is a Sole Owner). Is it possible to add me as a Responsible Managing Employee (RME) to qualify having two people in the company so we could continue our group insurance? What are the qualifications to be an RME? Due to pre-existing conditions for both of us being able to qualify for health insurance, as individuals would cost a fortune, which we can’t afford.

A: I sympathize with your situation. I have spoken with other people in your position and understand how difficult it is to secure individual health insurance coverage with a pre-existing condition.

To become a RME, you’ll need to first determine if you can qualify for a contractor’s license. Since your husband is the “B” Qualifier, you cannot qualify the same classification that he does. Therefore you’ll need to look at another classification such as painting or plumbing or drywall, etc. If you can show 4 or more years of full time experience (within the past 10 years), you’ll be able to sit for the law and appropriate trade test. The work must be at a Journeyman level or above and cannot only be “administrative” in nature. Once you pass the exams, a $12,500 Bond of Qualifying Individual must be posted and you will need to clear fingerprinting.

As an alternative, you and your husband may want to look at incorporating and assigning his current Sole Owner license to the new company. This would then allow you both to become employees and possibly qualify for “group” insurance. Before considering this, please speak with your insurance agent as well as your accountant and/or legal council. I sincerely wish you, and all dealing with these issues, the best of luck.

Q: Hello, I found you on the web (cutredtape.com) while searching for an answer to my licensing problem. I handle a lot of work for a certain Southern California city. We have an “A” license and either self-perform or sub-out grading, concrete, fencing, landscaping, and paving. There has never been any real problem —until last week. The City wants us to now have a “B” to handle the exact work we have been handling for many years under the General Engineering (“A”). In your opinion, can we do the work with our current license? By the way, this is a park project. Could we get the “B” if we had to?

A: Thank you for your question. As we discussed, by definition, an “A” can handle projects related to “parks, playgrounds and other recreational works”. Since the project has NOTHING to do with a building you can tell them that, in the opinion of at least one licensing expert, the “B” would be improper and hard to justify.

However, this being said, since a city can determine the “proper” classification for a specific project you may need to apply for the “B” to do this work. Of course qualifying for the General Building classification may be difficult since none of your experience is in “connection with any structure built, being built, or to be built…” as specified in Code Section 7057.