NJBIA's Public Policy Forum: The Road to Recovery REGISTER

Employer-based health insurance premiums increased an average of 3 to 4 percent over the previous year,  as costs continue to rise at rates much closer to inflation and employees’ salary increases than the early 2000s.

According to the Kaiser Family Foundation (KFF)/Health Research & Educational Trust 2017 Employer Health Benefits Survey, premiums for family coverage averaged $18,764 in 2017 and single coverage was $6,690.

“It’s important to remember that the overwhelming majority of Americans of working age get their health insurance from their employer,” said Mary Beaumont, NJBIA’s vice president for Health and Legal Affairs. “Employers in New Jersey continue to tell us that the cost of providing health benefits to their employees continues to be the biggest challenge they face.

“The key to making health insurance more accessible continues to be making health insurance more affordable, particularly for small businesses,” Beaumont said.

The cost of health insurance is an especially difficult issue for businesses in New Jersey. The state requires health plans to include coverage for specific healthcare services. New Jersey has 36 such mandates, which add to premium costs and restrict employer choice and flexibility.  In order to contain costs,  businesses purchase HMO plans, plans with little or no  out-of-network benefits, or  high-deductible health plans, Beaumont explained.

“All the plans they purchase are standard plans, with no ability to be more or less comprehensive,” she said. “That’s why self-funding or joining a group under a Multiple Employment Welfare Arrangement (MEWA) is so attractive; there is the potential for flexibility in the types of benefits under a plan.”

The Kaiser survey meanwhile, indicates the rate of increases for the cost of health insurance is moderating. Health insurance premiums rose 55 percent since 2007, but only 19 percent since 2012. While increases are still high, they are much less than the first part of the century, when employer-provided health insurance costs essentially doubled in eight years.

The cost increases also compare favorably with wage increases and inflation. The average single premium increased 4 percent and the average family premium increased 3 percent in 2017, compared to a 2.3 percent increase in workers’ wages and a 2.2 percent increase in inflation over the last year.