Three health insurance reform bills scheduled for a floor vote in the Assembly on June 23 would help alleviate one of the State's biggest problems for employers and employees alike-the exploding cost providing of health insurance to employees, the New Jersey Business & Industry Association (NJBIA) said today.

"For our 23,000 member companies, the rising cost of health insurance is by far the biggest problem they face," NJBIA President Philip Kirschner said. "Health insurance costs are skyrocketing, so we are happy to see the Assembly step up to the plate and do something about it."

Kirschner pointed out that the impact of rising health insurance costs goes beyond just the employers. Employees are being asked to shoulder some of these cost increases through higher copayments and deductibles as well as paying a higher percentage of the insurance premium. And as rising health insurance costs eat-up larger portions of businesses' operating budgets, it impacts employee pay raises, bonuses and other benefits.

Christine Stearns, NJBIA vice president for health affairs, said New Jersey employers are facing continuous hyperinflation in the cost of providing health benefits to their employees. Employers participating in NJBIA's 2005 Health Benefits Survey reported paying an 11 percent average increase in the cost of providing health insurance to their employees in 2004. Their average cost was $7,300 per employee. This came on top of a 13 percent increase in 2003 and 15 percent in 2002. They paid a 55 percent cost increase over four years. What's more, the survey indicated that double-digit rate increases were forcing a drop in the percentage of employers offering health insurance coverage for the first time in the survey's 12-year history.

"It's time for us to look at healthcare reform as a cost issue because it is becoming increasingly difficult for people who pay the bills-the employers," Stearns said. "Five million people in New Jersey receive their health insurance from private-sector employers. That's 58 percent of State's population. The potential impact of this problem is frightening."

The three bills scheduled for a vote on June 23 would provide for Health Savings Accounts (HSAs), reform the small group and individual insurance markets, and make it easier for employers to meet the participation requirements of State insurance programs. All three measures incorporate key provisions of NJBIA's Health Insurance Reform Plan.

The three bills are:

• A-3359 (Cohen, Weinberg), The Health Insurance Affordability and Accessibility Act: This bill would provide more flexibility in the design of health plans for individuals and employers with two to 50 employees by making several changes to the State-regulated Small Employer (SEH) and Individual (IHC) Health Insurance markets. Specifically, it would institute a modified community rating for IHC plans allowing insurance companies to vary rates by up to 200 percent based only on age, gender and geography. This would allow insurers to offer lower priced plans to younger, relatively healthy people, thus attracting more insured individuals to the system. The bill also would increase choice and competition among consumers by requiring insurers to offer health plans in both the individual and small employer markets, not just one or the other.
• A-3440 (Cohen, Russo), Health Savings Accounts: Health Savings Accounts (HSAs) were created as part of recent federal legislation. They allow employers and individuals to contribute tax-free to savings accounts that are then used to pay for routine medical expenses. Federal regulations require those using HSAs to be covered by a high-deductible health insurance plan that covers expensive medical treatments, but New Jersey's high-deductible health plan does not meet federal requirements. A-3440 would change New Jersey law to permit the sale of qualified federal high-deductible insurance plans.
• A-3379 (Cohen, Voss), Minimum Participation Rates: This bill would make it easier for small businesses to obtain health insurance for their employees by allowing them to count employees who are covered by Medicaid and NJ FamilyCare towards their minimum employee participation rates. The small-group health insurance market provides health benefits to small businesses with two to 50 employees. Insurers require these businesses to guarantee that a minimum number (usually 75 percent) of their employees will participate in the insurance plan, thus spreading the risk. Counting employees covered under State Medicaid insurance or the State-run NJ FamilyCare program would make it easier for more small businesses to qualify for this program.