Attention: Business, State House Editors

Controlling skyrocketing healthcare costs, not mandating exorbitant benefit levels that force businesses to pay even more, is the way to expand the availability of employer-provided healthcare benefits, New Jersey Business & Industry Association (NJBIA) Vice President Christine Stearns stated in written testimony that will be delivered at a March 2 legislative hearing.

Stearns, who represents NJBIA’s 23,000 member companies on healthcare issues before the Legislature, is scheduled to testify before a joint meeting of the Senate Labor and Senate Health Committees on “employers’ responsibility with respect to providing health benefits coverage to their employees.”

“Employers are facing skyrocketing health insurance costs that are forcing them to make difficult decisions,” Stearns said. “Health insurance inflation rates are three and four times higher than general inflation rates. This is wreaking havoc on the operating budgets of small businesses and large corporations alike. To expand the number of people getting insurance from their employers, legislators must find ways to control costs.”

Stearns will testify that legislative efforts to impose mandatory healthcare spending minimums on businesses miss the point. Reforming New Jersey’s the health insurance system to control costs is necessary.

“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 benefits; 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 them back is skyrocketing costs.”

In her testimony, Stearns will point out:

Two-thirds of New Jerseyans get their health insurance through their employer. Roughly 5.5 million people in New Jersey obtain their health insurance through their employer. That equates to roughly 66 percent of the population. Another 21 percent are in government programs. The remaining 13 percent are uninsured.

Health insurance costs are out of control. The NJBIA annual Health Benefits Survey of 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 over the last four years (2001-2004) was 55 percent.

A declining percentage of survey respondents provided coverage in 2004, largely because of the exploding costs. This was the first statistically meaningful drop in the percentage of respondents providing health coverage in the 12-year history of the survey.

The cost of health benefits is rising much faster than salaries and wages. According to the US Bureau of Labor Statistics, the total compensation costs of US firms rose about 3.7 percent in 2004, but salaries increased just 2.4 percent while benefits costs rose 6.9 percent.

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