National Health Survey: Healthcare Costs Continue to Rise Faster Than Inflation Read
DEP to Seek Advice from Private-Sector Scientists, Engineers Read
Assembly Speaker to Retire Read
NJ Rated Worst for Business Taxes Read
Congress Debates Healthcare Reform Read

The average premium for employer-sponsored health insurance rose to $13,375 annually for family coverage this year, according to the benchmark 2009 Employer Health Benefits Survey released September 15 by the Kaiser Family Foundation and the Health Research & Educational Trust. This represents a 5 percent increase over 2008 and is much greater than general inflation, which fell 0.7 percent. The cost for single coverage remained relatively stable at $4,824.

Since 1999, premiums for family plans have risen 131 percent, while inflation has risen only 28 percent. Despite the steep increases, this year’s rise in premiums has been more moderate than the double-digit growth experienced earlier this decade.

The survey also found that 60 percent of employers offer health benefits to their employees. Smaller businesses were less likely to offer health benefits, with 46 percent of employers with three to nine workers offering insurance coverage.

Among those firms offering benefits, 21 percent reported they reduced the scope of health benefits or increased cost sharing due to the economic downturn, and 15 percent reported they increased their employees’ share of the premium.

On average, employers paid $9,860 towards the family premium (74 percent), while employees paid $3,515.

Preferred provider organizations continued to dominate the employer market, enrolling six in 10 covered workers. Health maintenance organizations (HMOs) covered 20 percent of workers, with an additional 10 percent in point-of-service plans, and 8 percent in consumer-directed plans, which are high-deductible plans that also include a tax-preferred savings option such as a Health Savings Account (HSA) or Health Reimbursement Account (HRA).

The Kaiser survey reflects what NJBIA members have been reporting for many years, namely that health plan costs are rising much faster than general inflation. New Jersey companies reported an average insurance premium increase of 9.4 percent per employee in 2007, according to NJBIA’s most recent Health Benefits Survey, extending a period of high health-plan inflation that had seen costs double over the previous six years. In NJBIA’s annual Business Outlook Survey, Association members have consistently ranked the rising cost of health insurance as their most troublesome problem.

The latest Kaiser survey was released as Congress began action on comprehensive healthcare reform.

From the business community’s standpoint, reining in health insurance costs that are rising at three to four times the rate of general inflation is essential to successful health insurance reform.
The cost increases hit New Jersey’s small businesses the hardest. The average cost of an insurance policy for smaller companies, those with 2-50 employees, rose by an average of 9.8 percent, according to the NJBIA Health Benefits Survey.

Despite these increased costs, most employers continued to provide health benefits in New Jersey. In fact, 98 percent of employers with more than 50 employees offered health benefits plans, the NJBIA survey found.

The NJ Department of Environmental Protection (DEP) is finalizing the creation of a new Science Advisory Board to help ensure that environmental policy is based on sound science.

The panel will be comprised of 12 private-sector scientists and engineers who will provide technical analysis on a wide variety of environmental issues. The board will be supported by four standing committees broken into different subject areas: ecological processes, public health, water quality and quantity, and climate and atmospheric sciences.

NJBIA has long advocated grounding environmental regulations in sound science, and the Science Advisory Board is a big step in that direction. NJBIA would have preferred that the board have the authority to bring issues to the attention of the DEP commissioner (not simply review the topics that are referred to them) and report their findings to the Legislature as well as the DEP.

NJBIA supports legislation, S-2671 (Oroho, Sweeney)/A-3810 (Milam, Chiusano), that would increase the authority of the Science Advisory Board. For more information, contact

Legislation requiring State-regulated health plans to cover treatments for autism and other developmental disabilities was signed by Governor Corzine on August 13.

The law, A-2238 (Roberts, Prieto)/S-1651 (Vitale, Weinberg), requires insurance plans to cover physical therapy, speech therapy, occupational therapy and evidence-based behavioral interventions for the autistic when deemed necessary by a physician.

While the final legislation included many of NJBIA’s recommendations to balance costs with access to needed services, NJBIA is still concerned about the impact this mandate will have on the cost of health insurance. We are generally opposed to healthcare mandates because they increase the costs of insurance when employers are already struggling to pay healthcare premiums.

Estimates show that legislatively imposed health insurance mandates significantly increase the cost of purchasing health insurance.

Furthermore, this new mandate will only impact a small portion of the population, those in State-regulated health plans, which cover about 27 percent of the population. For more information, contact

Assembly Speaker Joseph Roberts announced September 1 that he will not seek re-election this fall and will retire at the end of his term in January. Roberts has served 22 years in the Assembly representing the 5th Legislative District in Camden and Gloucester counties. He has been Assembly Speaker since 2006.

“I’ve spent 22 years in this house, including four years each as majority leader and speaker,” Roberts said in a written statement. “They’ve been exciting years, and this has been an opportunity I will never forget, but I know that the time has now come to let someone else have their turn at this great job.”

Because the announcement came after the June primaries, the Camden and Gloucester County Democratic party organizations were able to select Donald Norcross of Camden as the replacement candidate for Roberts’ Assembly seat in the 5th District.

Under an agreement with the NJ Department of Banking and Insurance (DOBI), eight major insurance companies in New Jersey will cover the cost of administering the H1N1 vaccination and other H1N1 influenza medications. The agreement was announced in September between DOBI and Aetna, AmeriGroup, AmeriHealth, CIGNA, HealthNet, Horizon Blue Cross Blue Shield of New Jersey, UnitedHealthCare, and University Health Plans.

The H1N1 virus or “swine flu” is a strain of influenza that has the possibility of turning into a pandemic because humans have not built up natural antibodies to combat it and are therefore more susceptible to infection. An outbreak of H1N1 flu occurred this past spring, and health officials developed this vaccine to prevent another large outbreak during the fall flu season.

While the cost of producing the vaccine will be covered by the federal government, the insurance companies will cover the cost of administering it regardless of whether or not it is included in individual health plans.

The companies also agreed to reimburse any member provider for vaccine administration, whether or not the provider is the insured’s primary care physician, and to waive any restrictions on multiple flu shots (including restrictions emanating from exhausting a wellness allowance).

The agreement also includes coverage of anti-viral medications (e.g. Tamiflu and Relenza) and the relaxation of certain restrictions on their use so that doctors can provide the medications consistent with evolving federal guidance.

Anyone with questions or problems regarding H1N1 vaccine coverage under New Jersey plans should contact the department at 800-446-7467 (SHOP), 609-292-7272 or at www.njdobi.org.
For more information on H1N1 influenza in New Jersey, visit the State’s Web site at www.state.nj.us/health/flu/index.shtml. To access federal information on H1N1 influenza, go to www.flu.gov/.

The Tax Foundation has again ranked New Jersey’s business tax climate as the worst among the 50 states in its 2010 State Business Tax Climate Index released September 22. The index ranks states on how business-friendly their business tax systems are. New Jersey has ranked last every year since 2006.

Right behind New Jersey at the bottom of the list were New York and California, while South Dakota had the most probusiness tax climate. As for New Jersey’s neighbors, Delaware ranked number 8, Pennsylvania was 27 and New York, 49.

New Jersey’s ranking comes despite the fact that the State extended the carry-forward period for net operating losses to 20 years and eliminated two rules: 1) the throw-out rule, which allowed New Jersey to tax business income earned in other states, and 2) the regular-place-of-business rule, which forced small businesses to open offices in other states to protect their out-of-state income from being taxed in New Jersey. These changes will save employers $320 million.

However, New Jersey also recently increased the unemployment payroll tax by $350 million as well as the tax rate on personal income exceeding $400,000 per year.

Assembly Speaker Joseph Roberts announced September 1 that he will not seek re-election this fall and will retire at the end of his term in January. Roberts has served 22 years in the Assembly representing the 5th Legislative District in Camden and Gloucester counties. He has been Assembly Speaker since 2006.

“I’ve spent 22 years in this house, including four years each as majority leader and speaker,” Roberts said in a written statement. “They’ve been exciting years, and this has been an opportunity I will never forget, but I know that the time has now come to let someone else have their turn at this great job.”

Because the announcement came after the June primaries, the Camden and Gloucester County Democratic party organizations were able to select Donald Norcross of Camden as the replacement candidate for Roberts’ Assembly seat in the 5th District.

Under an agreement with the NJ Department of Banking and Insurance (DOBI), eight major insurance companies in New Jersey will cover the cost of administering the H1N1 vaccination and other H1N1 influenza medications. The agreement was announced in September between DOBI and Aetna, AmeriGroup, AmeriHealth, CIGNA, HealthNet, Horizon Blue Cross Blue Shield of New Jersey, UnitedHealthCare, and University Health Plans.

The H1N1 virus or “swine flu” is a strain of influenza that has the possibility of turning into a pandemic because humans have not built up natural antibodies to combat it and are therefore more susceptible to infection. An outbreak of H1N1 flu occurred this past spring, and health officials developed this vaccine to prevent another large outbreak during the fall flu season.

While the cost of producing the vaccine will be covered by the federal government, the insurance companies will cover the cost of administering it regardless of whether or not it is included in individual health plans.

The companies also agreed to reimburse any member provider for vaccine administration, whether or not the provider is the insured’s primary care physician, and to waive any restrictions on multiple flu shots (including restrictions emanating from exhausting a wellness allowance).

The agreement also includes coverage of anti-viral medications (e.g. Tamiflu and Relenza) and the relaxation of certain restrictions on their use so that doctors can provide the medications consistent with evolving federal guidance.

Anyone with questions or problems regarding H1N1 vaccine coverage under New Jersey plans should contact the department at 800-446-7467 (SHOP), 609-292-7272 or at www.njdobi.org.
For more information on H1N1 influenza in New Jersey, visit the State’s Web site at www.state.nj.us/health/flu/index.shtml. To access federal information on H1N1 influenza, go to www.flu.gov/.

The Tax Foundation has again ranked New Jersey’s business tax climate as the worst among the 50 states in its 2010 State Business Tax Climate Index released September 22. The index ranks states on how business-friendly their business tax systems are. New Jersey has ranked last every year since 2006.

Right behind New Jersey at the bottom of the list were New York and California, while South Dakota had the most probusiness tax climate. As for New Jersey’s neighbors, Delaware ranked number 8, Pennsylvania was 27 and New York, 49.

New Jersey’s ranking comes despite the fact that the State extended the carry-forward period for net operating losses to 20 years and eliminated two rules: 1) the throw-out rule, which allowed New Jersey to tax business income earned in other states, and 2) the regular-place-of-business rule, which forced small businesses to open offices in other states to protect their out-of-state income from being taxed in New Jersey. These changes will save employers $320 million.

However, New Jersey also recently increased the unemployment payroll tax by $350 million as well as the tax rate on personal income exceeding $400,000 per year.

Builders and developers that have already paid the new COAH (Coalition on Affordable Housing) fee on nonresidential construction can now apply for a full reimbursement. The application deadline is November 30. To download the application and instructions, visit www.state.nj.us/dca/affiliates/coah/regulations/nrdf/nrdfclaim.pdf.

A fee of 2.5 percent of the cost of each new nonresidential development was imposed in 2008. Legislators suspended the fee this spring as part of an economic stimulus package that included a provision for reimbursement of COAH fees already paid.

Congressional leaders are pressing for year-end passage of a comprehensive overhaul of the nation’s healthcare system that could have a major impact on employers. H.R. 3200 has already passed the three House committees that have jurisdiction over the issue, and the US Senate Finance Committee was expected to vote on its version of the bill, America’s Healthy Future Act of 2009, soon.

Both measures aim to provide insurance coverage to all Americans beginning in 2013 by requiring everyone to obtain health insurance. The measures would provide subsidies to those with low incomes and fund the subsidies through tax increases and cuts to government insurance programs, like Medicare.

The measures would also prohibit insurance companies from denying coverage because of a pre-existing condition and establish a list of benefits that every insurance plan must provide. There are, however, substantial differences between the two bills.

H.R. 3200.
In addition to an individual mandate, the House bill would mandate that all employers with payrolls of $250,000 or above provide health insurance to their employees or pay a penalty of up to 8 percent of their total payrolls to help subsidize coverage.
Employers would be required to pay at least 72.5 percent of an individual premium and 65 percent of the cost of a family plan. The bill would also create a Health Insurance Exchange where small businesses and individuals could purchase coverage. One of the measure’s most controversial provisions is the creation of a public option—a government-run health insurance plan to compete with private insurance companies.

America’s Healthy Future Act of 2009.
The Senate’s version of healthcare reform currently does not include an employer mandate, as such, and does not create a public option. It would require individuals to obtain health insurance coverage or pay a fee of $750 and charge a fee to employers with 50 or more employees if their workers buy insurance on the public insurance exchanges. It also provides tax incentives to small businesses and the self-employed for providing health insurance coverage.

The Senate bill would also dramatically increase taxes on medical products and impose an excise tax on high-end health insurance plans, defined as those costing more than $8,000 for individual coverage and $21,000 for family coverage.

The cost of health insurance is one of the biggest issues facing employers in New Jersey. Costs have risen at three to four times the rate of general inflation to the point where the average premium for a family plan is more than $13,000 per year.

While increasing the number of insured individuals would help stabilize health insurance prices, NJBIA is very concerned about several provisions in these bills. A public option that pays below-cost reimbursement rates to healthcare providers would undermine private insurance, which would have to pay more to make up the difference. Additionally, an employer mandate is unworkable. Most employers that do not provide health insurance simply can’t afford it. Mandating coverage, and then dictating how much of the premium employers have to pay, will force most companies to cut jobs. New taxes on medical products and insurance plans would only increase healthcare costs and make it harder for employers to afford health insurance coverage.

A lot has been written about the spending in the federal stimulus bill, but are there any tax provisions that can help my small business?

A. Relatively few of the many provisions of the federal stimulus act (the “American Recovery and Reinvestment Act of 2009”) are designed to help small businesses with their federal taxes in a way that stimulates private-sector spending. These tax provisions have not received much media attention. The provisions tend to be technical and narrowly focused, such as several allowing tax credits for certain types of investment in energy generating or usage equipment. Following are highlights of key provisions:

Note: As with any information on taxes, you should consult your tax
attorney or accountant as to how these might affect your company’s financial situation.

Net Operating Losses
A small business that had a net operating loss in a tax year beginning in 2008 or one ending in 2008 will have more options to carry back the loss. Under the Act, small businesses can elect to deduct the loss as far back as the fifth preceding taxable year. Prior law limited the carry-back period to the second preceding taxable year.

For this provision, a small business is defined as one whose gross receipts for the prior three years did not average more than $15 million per year.

Capital Investment
Businesses can continue to deduct up to $250,000 in capital investment as a current-year deduction rather than as an item of depreciable property. This limit was raised temporarily from $125,000 in 2008, and the stimulus bill maintains the higher limit.
There are numerous conditions to this provision. If the investment costs more than $800,000, for example, the maximum deduction is reduced dollar for dollar.

Bonus Depreciation
Similarly, the stimulus bill continues the rule to allow for a depreciation of 50 percent of the cost of qualified property placed in service in 2009. The rule was first enacted in 2008. All size businesses are eligible, but the rules are complex. Businesses should do comparative, hypothetical calculations to see if this makes sense for them financially.
___________________________
Robert S. Schwartz is an attorney at Lindabury, McCormick in Westfield concentrating on corporate transactions and all aspects of federal and state taxation, including trusts and estates.

Thirty companies at the September 30 meeting of NJBIA’s Manufacturing Council in Newark learned what it takes to compete in manufacturing for the next generation from a leading manufacturing consultant and the NJ Manufacturing Extension Program (MEP).

The global economy and the high cost of doing business make it critical for manufacturers in New Jersey to adhere to the six strategies that will drive the next generation of manufacturing, said MEP President and CEO Robert Loderstedt.

Manufacturers need to commit to customer-focused innovation, increased workforce development and training, a global marketplace, improved supply chain management, superior processes, and sustainable or “green” products and processes.

David Rubin, a principal with the consulting firm J.H. Cohn, LLP, said manufacturers should focus on three areas—
efficiency, information and what the customer wants.

Rubin is a proponent of lean manufacturing, the process of improving efficiency by stripping away anything that does not add value to the process. He explained that the principles of lean manufacturing should not be confined to the factory floor, but should be put to use in sales departments, human resources, marketing and other areas as well.

Friday, November 13
Health Insurance:
How To Get the Best Deal
• Location: Renaissance Woodbridge Hotel, Iselin (Route 1 South)
• Time: 8:30 a.m. – 12:30 p.m.
• Cost: $129 pp for NJBIA members / $169 for nonmembers
• Contact: Katie Wittkamp, ext. 239
At this seminar, industry professionals will show you how to purchase quality coverage at the most competitive rates. You will learn about the benefit options that are available to your company and about the cost-saving trends in health insurance. You will also learn about Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs), and State and federal laws concerning health insurance that affect your business. Come with your questions!

Friday, November 20
Navigating NJ Paid Family Leave
• Location: Wilshire Grand Hotel, West Orange
• Time: 8:30 a.m. – 1:00 p.m.
• Cost: $129 pp for NJBIA members / $169 for nonmembers
• Contact: Katie Wittkamp, ext. 239
All New Jersey employers, even those with only one employee, must comply with the State’s new Paid Family Leave Act. Your employees are now entitled to take six weeks of paid family leave each year to care for the birth or adoption of a child or to deal with a family member’s “serious health condition.” At this briefing, top legal experts will present information about the law, including: when an employee is eligible to take paid leave, your obligations as an employer, and how to make sure your workplace is in compliance. It’s not too late to get up-to-date information on what you need to do to protect yourself and your business!

Tuesday, December 8
NJBIA Public Policy Forum
• Location: Renaissance Woodbridge Hotel in Iselin
• Time: 7:45 a.m. – 2:00 p.m.
• Cost: $175 pp for NJBIA members / $250 for nonmembers
• Contact: Katie Wittkamp, ext. 239
We have invited Governor Jon Corzine, US Senator Robert Menendez and a host of legislative leaders and policy experts to assess what 2010 will bring economically and legislatively. Don’t miss this great networking event!

NJBIA’s 2010 New Good Neighbor Awards Competition
Nomination Deadline: February 1, 2010
Are you proud of a new or renovated commercial facility built in your town over the past two years? If so, then nominate your “new good neighbor!” The 50th Annual New Good Neighbor Awards competition is sponsored by the New Jersey Business & Industry Association and its flagship publication, New Jersey Business magazine. Winning projects must show economic benefit, architectural merit, and community involvement. Winners will be notified in late March by mail and will be featured in the June 2010 issue of the magazine. The awards will be presented at a June 2010 luncheon.

• What facilities are eligible for nomination?
New, renovated or expanded plants, office and commercial buildings, and retail centers (excluding individual stores within shopping centers) are eligible. Construction or capital expenditures at the nominated facility must have been completed during the past two years, between January 1, 2008 and December 31, 2009.

• Who can nominate a facility?
Facilities may be nominated by any official who works for a federal, State, county or local government entity, a local chamber of commerce, or an industrial development association. Corporations, builders, contractors, and architects may not nominate; however, they can ask their local public officials or chamber representatives to make a nomination. The nomination deadline is Monday, February 1, 2010. Please visit www.njbia.org/awards to download the nomination forms or contact Katie Wittkamp at ext. 239 for more information.
________________
NJBIA’s many events and programs are made possible in part through the financial support of our Premier and Grand sponsors.  NJBIA extends its deepest appreciation for the generosity and support of these members.

Premier Sponsors
NJM Insurance Group
www.njm.com  •  1-800-232-6600

The Port Authority of New York & New Jersey
www.panynj.gov  •  212-435-7000

Grand Sponsors
Connell Foley LLP  •  973-535-0500
Horizon Blue Cross/Blue Shield of NJ  •  1-800-355-2583
NJ Credit Union League  •  1-800-792-8861
South Jersey Industries  •  609-561-9000
United Water  •  201-767-9300 
Verizon •  1-800-837-4966