With health insurance costs rising at four-times the rate of inflation, New Jersey should not require employers to pay for virtually unlimited coverage for treatment of substance abuse and a wide range of behavioral problems through expanded mental health coverage, NJBIA Vice President Christine Stearns said today.

The Senate Health Committee released the expanded mental health coverage bill, S-807 (Vitale, Buono), on Thursday, January 26.

Stearns said New Jersey employers saw their health insurance costs rise by a cumulative 55 percent in four years (2001 to 2004). Businesses 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 a 15 percent increase in 2002. The survey also found that the percentage of employers offering health insurance coverage fell for the first time in the survey’s 12-year history.

Adding new mandatory coverages at a time when employers cannot even keep up with current health insurance cost increases is bad public policy.

“This legislation will put additional burdens on many small businesses that are already struggling with skyrocketing costs,” Stearns said. “Many employers have reached the breaking point. Imposing this mandate will cost real people all of their health insurance benefits. Not only will they have no access to treatment for behavioral disorders, but they will lose coverage for hospitalization, prescription drugs, doctor visits, blood tests, and everything else.”

Furthermore, insurance plans are already required to cover serious mental health illnesses and most insurance plans already provide coverage for substance abuse, although not the unlimited coverage that would be mandated under S-807.

“It’s not just a question of whether or not employers should provide this coverage,” Stearns said. “It’s a question of priorities. Should we require unlimited treatments for these conditions even if it means much higher insurance costs that cause some people to lose their health insurance altogether? Five million people in New Jersey rely on private-sector employers for their health benefits, and they will be impacted by how New Jersey’s lawmakers answer that question.”

Stearns also pointed out that such a mandate would not apply to all insurance plans, only those sold in the State’s regulated market, which insures only about 2.4 million residents. Almost all small businesses (those with two to 50 employees) that provide health benefits are in the regulated market, so this mandate would be imposed on the small employers who would be least able to afford it.