Attention: Business, Feature Editors

Even as health insurance costs continue to soar out of control, the Senate Labor Committee is scheduled to vote on a bill that would mandate more healthcare spending for large employers who already offer health insurance plans, NJBIA Vice President Christine Stearns said today.

The committee is scheduled to vote May 11 on S-477 (Sweeney, Coniglio), which would require companies with 1,000 or more employees to spend at least $3.30 per hour per employee on health insurance ($6,864 per year for employees working a 40 hours per week) or pay the difference to the State. This would apply to part-time employees working at least 15-hours per week as well.

“At a time when employers are struggling with premium increases that are rising three times faster than the rate of inflation, the Senate Labor Committee is worried about business not spending enough? This is backwards,” Stearns said. “We should be working together to lower the cost of health insurance and make it more affordable.”

“As a group, these large companies provide some of the most generous benefit packages in the private sector,” Stearns added. “ New Jersey would be better served if the committee took up the hard work of insurance reform so that more small businesses could afford health insurance for their employees.”

Stearns, who represents NJBIA's 23,500 member companies on healthcare issues before the Legislature, is scheduled to testify against the bill. In her testimony, Stearns will point out that r oughly 5 million people in New Jersey rely on private-sector employers for their health insurance and that those employers are struggling to keep up with steep premium increases.

According to NJBIA's annual Health Benefits Survey, NJBIA member companies of all sizes found that their cost for provide health insurance to their employees soared by 11 percent to a record $7,307 per employee in 2004.  This followed a 13 percent increase in 2003 and a record 15 percent increase in 2002.  The cumulative increase from 2001 to 2004 was 55 percent.  What's more, a declining percentage of survey respondents provided coverage in 2004 because of the exploding costs. This was the first stat istically meaningful drop in the percentage of respondents providing health coverage in the 12-year history of the survey.

“The idea that we can solve the problems with our health insurance system by making businesses pay more is ludicrous,” Stearns said. “Businesses want to provide health insurance; in fact, businesses believe it is in their own best interest to offer quality benefits. It's a great way to attract and retain good employees. What holds some back is skyrocketing costs.”

NJBIA has prepared a comprehensive plan for health insurance reform that would provide employers with more insurance plan choices, improve quality and reduce medical mistakes, utilize new health insurance products like Health Savings Accounts, and provide direct tax incentives to offset exploding insurance costs.