As health care costs continue to rise rapidly, a new study finds a growing number of New Jersey businesses are shifting costs to their workers, while also sacrificing some of their profits.

The New Jersey Business and Industry Association’s 2016 Health Benefits survey finds 85 percent of member companies are continuing to offer healthcare coverage to their employees, because it’s seen as a vital tool to retain employees and attract ones.

"In order to do so though, they are taking a hit to their bottom line. Some are putting off investments, and unfortunately some are limiting wages,” said NJBIA President and CEO Michele Siekerka.

David Matthau, Townsquare Media NJ
David Matthau, Townsquare Media NJ
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She said “we see a trend that the employer is shifting more of the cost to their employees, so for example in 2014 the employer was picking up 80 percent of the cost of the plan, and today in 2016 they’re picking up 74 percent, and that’s significant."

Siekerka said the trend is especially hurting small companies.

“Small business shoulders even more of the weight when it comes to cost of health benefits. Their increases this year were 12 percent,” she said.

So what does this mean for the future?

“We hear from our members every day, and in particular our smallest members, that the cost of doing business is becoming more and more challenging for them,” she said. “Their ability to continue to shoulder costs like benefits for their employees and to provide competitive wages for their employees is getting more challenging.”

She added, “I think small business is at a breaking point. This is what we hear.”

As this trend continues, Siekerka said, a growing number of employees are signing up for less expensive health plans.

The survey finds the number of companies offering high-deductible health plans has risen dramatically over the past two years. Thirty-four percent of firms indicate they have taken this step compared to only 24 percent in 2014.

To try to put the brakes on rising health care costs, Siekerka said, “we need to keep our eye on health care mandates, because we can’t afford any more, and we need to continue the vigorous discussion around out of network, because that drives up the cost of healthcare.”

The survey also finds voluntary benefits are on the rise. Sixty-three percent of NJBIA members are now offering dental benefits, up from 46 percent in 2014. Fourth-seven percent offer vision benefits (up from 26 percent); 30 percent offer a flexible spending account (up from 18 percent) and 24 percent of companies are now offering a health savings account, up from 17 percent.

Additionally, workplace wellness programs are also on the rise, but mostly for Jersey’s largest companies.

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