Small Companies Hard Hit as Health Plan Costs Double in 6 Years for NJ Employers Read
NJ Ranked Worst State for Operating a Small Business Read
Rutgers: NJ Ranks 41st in Nation in Private-Sector Job Creation Read
Private Sector Can Help NJ Solve Brownfields Backlog Read
Legislative Leaders Support Spending Cuts at NJBIA Event Read
NJ's Top Decision Makers on Healthcare, Taxes And Transportation Answer Questions Read
Order NJBIA’s Directory of the 213th New Jersey Legislature Read

Health insurance costs for New Jersey employers rose by an average of 9.4 percent to $7,139 per employee in 2007, extending a period of high health-plan inflation that has seen costs double for employers over the past six years.

The relentless climb of health insurance costs has hit small businesses the hardest, NJBIA said April 29 in releasing the findings of its 2008 Health Benefits Survey.

The average cost of an insurance policy for companies with 51 or more employees rose by an average of 7.7 percent to $6,598 per employee.  But the average cost of an insurance policy for smaller companies, those with 2-50 employees, rose by an average of 9.8 percent to $7,251 per employee in 2007.

In spite of soaring costs, 98 percent of companies with 51 or more employees said they still provide health insurance coverage as an employee benefit.  But a growing number of smaller companies said they have dropped coverage because they can no longer afford it.

“The average cost has doubled over the past six years,” said NJBIA Senior Vice President Melanie Willoughby.  “It’s reached the point where a lot of small companies simply can’t afford it anymore.”

Many small companies that still provide health insurance coverage said they had to scale back hiring plans or limit pay increases to continue to afford that coverage.

These are among the major findings of the New Jersey Business & Industry Association’s 2008 Health Benefits Survey, which was conducted in January 2008.  The findings are based on the first 1,047 responses.  The survey participants, 88 percent of whom were small companies with 2-50 employees, represented all major industry sectors and came from all 21 New Jersey counties.

Among other survey findings:
•           The average cost of $7,139 per covered employee in 2007 included coverage of both full-time employees with no covered dependents and full-time employees with covered spouses and/or dependents.  This was the amount paid by the employer.  It did not include the share of premium costs paid by employees.
•           The average increase of 9.4 percent for all companies in 2007 followed increases of 11.3 percent in 2006, 12 percent in 2005, and 11.2 percent in 2004.  Factoring in increases of 13.2 percent and 15 percent recorded by the NJBIA survey in 2002 and 2003, and given the effects of compounding, employers paying these average cost increases would have seen their costs double over the past six years.
•           The cost of health insurance, as a percentage of wages and salaries, also rose for many companies last year.  The average cost of $7,139 per employee represented 15 percent of reported average wages of $47,414.  This is up from 2006, when employer health insurance costs represented 13.5 percent of average wages.
•           As a group, employers do not expect their health plan costs to moderate anytime soon.  Survey participants anticipate that their costs will increase by an average of 9.7 percent in 2008.
•           The percentage of the smallest companies, those with 2-19 employees, providing coverage has fallen as costs have risen.  Seventy-five percent of this group reported providing coverage in the current survey, down from 92 percent in the 2003 survey.  The average size company in this group has six employees.
•           When companies that no longer provide coverage were asked why, 76 percent said they could no longer afford it.  Another 10 percent said they were unable to satisfy the State’s requirement that at least 75 percent of their workforce participate in the plan.

New Jersey has again been ranked the worst state in the nation in which to operate a small business by the Small Business and Entrepreneurship Council in its Small Business Survival Index.

The 2008 Survival Index analyzes taxes, regulations, mandates, government spending, litigation systems and property rights in each state and then ranks them according to the policy climate for entrepreneurship.  New Jersey was ranked 50th in the nation in supporting entrepreneurship.  Only Washington, D.C., had a worse rating.  New Jersey was ranked 50th in 2007 as well.

According to the index, South Dakota, Nevada, Wyoming, and Washington are the best states for small businesses.  Minnesota, California, Iowa, and Rhode Island joined New Jersey at the bottom of the list.  The index can be found at www.sbecouncil.org.

In another sign that New Jersey’s high costs are driving employers away, New Jersey ranked 41st in private-sector job creation in each of the past two years, two Rutgers University economists said in a report released last month.

New Jersey also ranked well behind New York and Pennsylvania in job creation.  New Jersey, which used to be an employment-growth leader in the mid-Atlantic region, has fallen behind its closest competitors, say professors James W. Hughes and Joseph J. Seneca in their report, Reversal of Economic Fortune, Regional and State Prosperity at Risk.

New Jersey would build new power plants, generate more electricity from wind and solar power, and cut its energy consumption by 20 percent by 2020, under the State’s revised Energy Master Plan.

More than a year in the making, the plan, still in draft form, seeks to guide New Jersey’s energy policy for the next 12 years on everything from increased power generation to lower greenhouse gas emissions.

The plan outlines five specific goals.  Among them: the development of Statewide building codes that would improve energy efficiency by 30 percent, the establishment of minimum energy efficiency standards for appliances and equipment not covered by existing standards, and the expansion of peak-demand pricing to more commercial and industrial customers.

Streamlining New Jersey’s site remediation program would help protect open space by easing development pressures, providing new property tax ratables to municipalities, and protecting the environment by cleaning up more polluted sites, NJBIA said recently.

Testifying at a joint hearing of the Assembly and Senate Environment Committees, NJBIA Vice President David Brogan said it was critical that New Jersey find a way to reduce the backlog of contaminated sites in New Jersey and bring them back to productive use.  Currently, 20,000 properties are contaminated, some of them severely, with 4,000 of those sites added in the last year.

Brogan said New Jersey should implement a Licensed Site Professional (LSP) program, which would permit brownfields developers to hire licensed private-sector environmental engineers to oversee cleanups and ensure they comply with State environmental laws.  This would take pressure off the staff at the NJ Department of Environmental Protection (DEP) and speed cleanups.  The DEP has endorsed the concept and presented a detailed proposal to the committees.

The licensed professionals would operate as independent overseers of cleanup projects.  The committee felt that the LSP’s should be held accountable for their actions and suggested strong penalties for non-compliance.  Citing the need for timely reviews and approvals by the DEP, Brogan said accountability has to go both ways. 

Despite tremendous business opposition, Governor Jon Corzine on May 2 made good on his pledge to sign legislation making New Jersey only the third state in the nation to provide all employees with up to six weeks of paid family leave.

Employees can receive two-thirds of their pay, up to a maximum of $524 per week.  To pay for the program, the new law on January 1 will increase payroll taxes on all workers.  Employees will not be able to begin taking paid leave until July 1, 2009.

The law permits employers to require employees who take paid leave to first use up to two weeks of vacation, sick or other paid time off provided by the employer.  These employees would then be able to take only an additional four weeks of paid leave.  The law also states that employers with 2-49 workers would incur no legal liability for not holding a position open for an employee who takes a leave of absence under the program.

NJBIA and its members vigorously opposed this measure every step of the way.  It will impose a burden on employers during an economic downturn when job losses are mounting, and it will cement New Jersey’s reputation as a poor place in which to operate a business.

“We are astonished that the Governor and the Legislature would impose a paid leave mandate on businesses that are already struggling to survive a recession,” said NJBIA President Philip Kirschner. 

If the Legislature’s Democratic majorities produce a budget that does not spend more than Governor Jon Corzine has proposed, Republicans could well end up supporting it.  If not, however, expect a spirited debate when it is brought up for a vote in June.  This scenario was discussed during NJBIA’s April 15 Meet the Legislative Leaders program, where Assembly Majority Leader Bonnie Watson Coleman, Senate Republican Leader Tom Kean and Assembly Republican Leader Alex DeCroce offered their ideas and took questions from about 120 NJBIA members.

“We have a budget that is controversial,” DeCroce said, referring to Governor Jon Corzine’s proposed spending plan.  “Will we support it?  We will support it as long as it maintains the cuts (Corzine) has proposed.”

Watson Coleman said that was just what the Assembly Democrats intended to do, even though they may not necessarily make the same cuts proposed by the Governor.  “We will have a budget consistent with what the Governor has proposed,” she said.

If the Democrats do try to increase spending, however, Republicans would not support them, Kean said, adding:  “We will not support a budget that spends more than what the Governor proposes, and, in fact, we want to spend less.”

Watson Coleman also assured the audience that the Legislature would move quickly to shore up the Unemployment Insurance Trust fund with a $260 million appropriation.  The move is designed to avoid an automatic $350 million payroll tax increase for employers that would otherwise be triggered on July 1, 2008 because of a drop in the fund’s balance.  “This shows we are serious about supporting business,” she said.

“Rarely have we seen a more unpopular law. We believe paid leave will undermine the State’s ability to retain and attract private-sector jobs.”

—NJBIA President
Philip Kirschner

Hundreds of NJBIA members heard it from the top recently at three breakfast briefings that connected them with the State’s foremost decision makers in healthcare, taxes and transportation.

During the Transportation event on March 26, the government leaders who participated suggested that an increase in the gas tax and toll hikes be used to fix the State Transportation Trust Fund, which will run out of money in 2011 without an infusion of new revenues.

NJ Department of Transportation Commissioner Kris Kolluri, Assemblyman John Wisniewski, chairman of the Assembly Transportation Committee, and Susan Bass Levin, first deputy executive director of the Port Authority of New York and New Jersey, stressed that while such a tax increase would face strong public opposition, the alternative is to have no money to fix roads, repair bridges or improve mass transit.

“The infrastructure system we have can be an impetus for economic growth, or it can be an impediment to it,” Kolluri said, adding that New Jersey has deferred maintenance on much of its transportation system. “We are fast approaching the point where it’s going to be an impediment.”

Speaking April 2 at the briefing on taxes and spending, State Treasurer David Rousseau was among those who agreed the time was ripe to rein in out-of-control State spending.  He and other decision makers indicated that whatever form the upcoming budget ultimately takes, it will not include any new taxes and it will cut spending.

Also on the panel were Senate Budget Committee Chair Barbara Buono, Louis Greenwald, chairman of the Assembly Budget Committee, and the two Republican budget officers, Senator Leonard Lance and Assemblyman Joseph Malone.  They and Rousseau assured the group that tax increases were not in the mix this year. (Buono had to leave for a budget hearing before the tax question was brought up.)

“There will be no new taxes,” Greenwald said. “There will be no new fees.”

Buono said the budget offered an opportunity to look at how New Jersey can do things differently.  She said taxpayers should get the best value from State contracts with vendors.  “We may not agree on everything, but one thing is for sure: (Corzine) is changing the dialogue, and he is changing the framework of the dialogue,” Buono said.

“Governor Corzine made the decision to turn things around,” Rousseau said, describing how the Administration has approached closing a $3.2 billion structural deficit. “That’s what this budget is, a turning point.”

Finally, during the April 22 briefing on healthcare reform, Senate Health Committee Chair Joseph Vitale said he believes universal healthcare is coming to New Jersey, but it won’t look like the single-payer (government-sponsored) systems in Great Britain or Canada.  The senator was joined by NJ Health Department Commissioner Heather Howard and Assembly Budget Committee Chairman Louis Greenwald.

Vitale has unveiled a comprehensive reform plan that would expand New Jersey’s existing subsidized insurance program for children, FamilyCare, and require all parents to obtain health insurance for their children.  He also envisions extending the requirement to adults with a mechanism to subsidize premiums for those who cannot afford them.

NJBIA Thanks Its Meet the Decision Makers Sponsors

Premier Sponsors
NJM Insurance Group/NJM Bank FSB
The Port Authority of NY&NJ

Grand Sponsors
Horizon Blue Cross Blue Shield of NJ
Verizon

Event Sponsors
Atlantic City Electric
AT&T
Federal Express
KPMG
New Jersey Cable Telecommunications Assn.
New Jersey Society of CPAs
Stavola Companies
Tilcon NY Inc.
UnitedHealthcare of NJ

NJBIA Thanks Its Meet the Leaders Sponsors

Premier Sponsors
NJM Insurance Group/ NJM Bank FSB
The Port Authority of NY&NJ

Grand Sponsors
Horizon Blue Cross Blue Shield of NJ
Jersey Central Power & Light Co., A FirstEnergy Co.
United Water
Verizon

Event Sponsors
AT&T
Comcast
EMBARQ

NJBIA’s handy, pocket-sized Directory of the 213th New Jersey Legislature is now available.  It is the best resource in the State for contacting State and federal decision makers and their staff.

The directory contains State legislators’ photos and the towns they represent, committee assignments, district office addresses, phone and fax numbers, e-mail addresses, and the names of their legislative aides.  It also lists the members of the Governor’s Cabinet, Senate and Assembly leaders and staff, as well as the State’s congressional representatives.

The cost is just $4 per copy ($3 per copy if purchasing more than 100 copies) for NJBIA members and $7 per copy for nonmembers.  For more information, contact Lynette Mujica at 609-393-7707, ext. 224.  You can also order your copies online at www.njbia.org/publications.

Friday, June 6
New Good Neighbor Awards Luncheon
Awards will be presented to New Jersey businesses that have recently built or renovated outstanding commercial facilities.  The reception will begin at 11:45 a.m., followed by the awards presentation from 12:30 p.m. to 2:00 p.m.  Network with New Jersey’s top builders, developers, architects and contractors!  This event will be held at the Sheraton at Woodbridge Place in Iselin.  Cost to attend is $70 per person.  Register online now, or for more information, contact Stacy Wichner at 609-393-7707, ext. 213.  To become a sponsor, contact Sherry Esteves, ext. 219.

Tuesday, June 17
Hot Legal Topics for Employers
This half-day seminar is a must for human resources managers.  NJBIA will bring together some of New Jersey’s foremost HR attorneys to cover critical workplace issues, such as paid family leave, hiring and firing, wage- and hour-compliance, and discrimination and harassment.  Our panelists will cut through the legal jargon and tell you what you need to know to avoid legal liability.  Network with other HR professionals, receive valuable handouts, and ask questions of the seminar speakers.  This program will be held at the Pines Manor in Edison (Route 27) starting at 8:00 a.m. and ending at 1:00 p.m.  The cost is $119 per person for NJBIA members, $149 for nonmembers.  To register online, visit www.njbia.org/events.  Register online now, or for more information, contact Stacy Wichner at 609-393-7707, ext. 213.  To become a sponsor, contact Sherry Esteves, ext. 219.

Tuesday, July 15
Golf & Tennis Day
NEW FORMAT: Shotgun Start
NJBIA will hold its 38th Annual Golf & Tennis Day at Forsgate Country Club in Monroe Township (NJ Turnpike, Exit 8A).  This event, one of the State’s major business outings, will be held in a new format this year with a morning shotgun-scramble.  Breakfast will begin at 7:00 a.m., followed by an 8:00 a.m. tournament start, a 1:00 p.m. reception, and lunch from 2:00 – 3:00 p.m.  A round-robin tennis tournament will be held at the East Brunswick Racquet Club starting at 8:00 a.m.  Cost per person:  $270 for golf and luncheon, $150 for tennis and luncheon, and $89 for luncheon only.  For for more information, contact Stacy Wichner at 609-393-7707, ext. 213.  To become a sponsor, contact Sherry Esteves, ext. 219.  Don’t miss this fun networking event, which attracts more than 250 golfers annually!

MEET THE DECISION MAKERS SERIES 2008

Friday, September 26 
Meet NJ's Top Two Legislative Leaders
Hear directly from New Jersey’s two most powerful legislative leaders, Senate President Richard Codey and Assembly Speaker Joseph Roberts.  These two individuals have enormous influence over legislation affecting health insurance costs, business taxes, workforce mandates, and the overall cost of doing business.  Plenty of time will be set aside to answer your questions.

Friday, October 17 
Environmental Regulation and Legislation
Meet NJ Department of Environmental Protection Commissioner Lisa Jackson; the respective chairmen of the Senate and Assembly Environment Committees,  Bob Smith and John McKeon; and other members of the Senate and Assembly Environment Committees, who will discuss State environmental policy, laws and regulations.

Both briefings will be held at the Forsgate Country Club, Monroe Township (NJ Turnpike, Exit 8A), beginning with registration and a buffet breakfast at 7:45 a.m. and ending at 10:00 a.m.  The cost to attend is $69 per person for NJBIA members and $105 per person for nonmembers.  For for more information, contact Stacy Wichner at 609-393-7707, ext. 213.  To become a sponsor, contact Sherry Esteves, ext. 219.