But if he is currently paying his own benefits and now the company will be paying them, then his getting current wages + benefits would amount to a ~40% pay hike. (Aren't benefits computed to be about 40% of salary?)

I would anticipate an offer that would lower the wages an amount offset by granting of benefits, with net result of zero, or hopefully a slight net gain.

And if it is a "full time position" with a contracting company, you're still just a temp employee...