The debate about the future of employer-sponsored health coverage rages on as our members struggle with the economy and the implementation of the Affordable Care Act. Are we seeing the beginning of the end for employer-sponsored benefits?
The majority of New Jersey employers continue to provide benefits for one simple reason: They recognize the competitive value of providing health benefits in a demanding market where skilled employees can be scarce. Further, offering health benefits can improve the health of the employees, reducing absenteeism and increasing productivity – a winning combination for employers and employees alike.
The cost of providing health coverage to employees is one of the most significant challenges. Health insurance premiums exceeded $4,565 for individual employees and $16,351 for family coverage on average, according to the 2013 Kaiser/HRET Survey of Employer-Sponsored Health Benefits.
Employers have reacted in a variety of ways to control spiraling costs. Many large employers have expanded wellness initiatives. The goal of many programs is to identify and intervene in health challenges early and to reduce the risks associated with chronic disease.
Companies of all sizes have had to increase deductibles and co-pays. The number of companies offering high deductible health plans (often with a Health Savings Account) is also on the rise. Many are considering whether a health insurance exchange offers a solution to the increasing complexities of benefits administration.
So is this the end of employer sponsored coverage? Not likely, but the situation is becoming increasingly precarious. Rising premiums, the looming excise tax on ‘Cadillac’ plans (a new tax on benefits that exceed a certain level taking effect in 2018); the complexities of the requirement that large employers must provide minimum essential and affordable coverage to avoid a penalty make health benefits increasingly unaffordable.
NJBIA has made ensuring access to affordable health insurance a top priority. It is essential to focus on building an efficient, effective, accessible and accountable healthcare delivery system that delivers coordinated care.
In the NJBIA Vision for a Better Business Climate, the healthcare section agenda focused on three priorities:
- Value is key to containing costs. Our current healthcare system is designed to pay for volume – the number of medical services delivered – not the value of those services. Value is far more important because it considers the results of the services provided in exchange for the costs incurred. Our healthcare delivery system should support providers for delivering value, improving the quality and efficiency of care while also containing costs.
- Consumers must be engaged. All too often, consumers are uninformed about the cost and quality of their healthcare. They are often disempowered and disconnected from our healthcare system, unable to make good choices about insurance coverage, doctors and treatment options. Consumers need the tools to better assess the quality and cost of health insurance, doctors, hospitals and treatments.
- Providers must embrace innovation. These problems will persist so long as providers are not well-connected to one another and fail to use systems to improve clinical decisions, and payments continue to reward fragmented care management.
New Jersey employers remain committed to providing health benefits to their employees, but NJBIA continues to believe that the cost of coverage presents a significant challenge.