More N.J. Employers Dropping Health Plans Due to High Cost

By Chris Newmarker | April 16, 2007

More Garden State employers dropped health insurance coverage for workers last year amid skyrocketing costs that were nearly double what they were five years before, according to a major business association’s survey of its members.

The information was likely to play a role in debates among state officials over whether New Jersey should join a growing number of states seeking to provide universal or near-universal health care coverage.

Among New Jersey businesses with two to 19 employees, 82 percent provided coverage in 2006, down from 87 percent in 2004 and 92 percent in 2003, according to the New Jersey Business & Industry Association survey. The association didn’t survey businesses on whether they provided health coverage in 2005.

Health insurance costs were $7,561 per covered employee last year, up 11.3 percent from 2005, and up 80 percent over five years, according to the group.

“Health insurance costs are rising at more than three times the rate of inflation,” said NJBIA President Philip Kirschner. “It’s clear that the pain of rising costs is hitting the smallest businesses the hardest, and this has forced some to drop coverage altogether.”

The survey results come as state legislators discuss ways to expand health insurance in New Jersey. Gov. Jon S. Corzine, a Democrat, has expressed support for the concept of universal health insurance.

“It’s something that we hope to accomplish after the budget process is over,” said Corzine spokesman Anthony Coley.

Massachusetts, Vermont and Maine have already enacted universal coverage plans, and proposals are under consideration in states including California, Illinois and Pennsylvania.

For the NJBIA, which has more than 23,000 member companies, the greatest concern isn’t the question about universal health insurance, but whether New Jersey officials make sure health insurance is more affordable for them, through tax credits or other means.

“Our bottom line is no matter what you do to fix the system, you have to make health care more affordable,” said NJBIA spokesman Chris Biddle.

The NBIA, which provides information, services and advocacy for its members, mailed out its survey in January 2007 to a random sampling of the association’s member companies employing two or more people. The results are based on the first 1,148 valid responses from the target group of 9,837 businesses.

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