Heathcare coverage isn’t the easiest of subjects for business owners. Typically, New Jersey Business & Industry Association (NJBIA) member companies report it as one of their top concerns – and costs – when running a business.
Add in the business impacts of a global pandemic, and providing healthcare coverage would seemingly be an added challenge for employers over the past year and a half.
The results of NJBIA’s 2021 Health Benefits Survey, however, show some pretty strong resolve among businesses owners who tried to keep their employees covered amid the most challenging circumstances. In fact, some of those who received COVID-19 grants and loans found themselves using those funds to help cover health insurance costs during the historically trying times.
Overall, the number of companies offering healthcare coverage remained consistent through the heart of the pandemic compared to prior to it – a strong indication that businesses that provide healthcare benefits weathered the COVID-19 storm the best they could.
According to the results of the survey, 78% of surveyed businesses said they offer healthcare coverage to their full-time employees – which was the same exact number as NJBIA’s 2018 Health Benefits Survey.
Given the typical rise of health insurance rates amid the challenges of the pandemic, this steadiness should be viewed as a positive. However, these numbers are still considerably down from the 85% who offered coverage in the 2016 survey and the 87% who offered coverage in the 2014 survey.
For the 22% of respondents that don’t offer healthcare insurance to full-time employees, a myriad of reasons were given as to why. They included costs (39%); their company isn’t big enough (35%); and an employee coverage mandate didn’t apply to them (27%).
Only 12% of surveyed companies offer health insurance coverage for its part-time employees.
The survey shows the type of plan most employees enrolled in was the Preferred Provider Plan (PPO) with 35% of employees, per company, covered.
Next was a High Deductible Health Plan (HDHP) with 20%, followed by a Point of Service Plan (POS) and Exclusive Provider Organization (EPO) with 14% each, a Health Maintenance Organization (HMO) with 13%, and a Health Savings Account (HSA) with 12%.
In companies with 1-24 employees, PPOs led the way with 38% of employees covered, followed by HDHPs (17%), HMOs (15%), POSs (14), and EPOs (11%).
The only categories where PPOs were not the top plan where employees enrolled was in the 50-99 and the 100-249 employee groups. In both cases, HDHPs had the most enrollment.
As a positive, 83% of NJBIA members said they will continue to offer their workforce healthcare coverage next year.
However, 7% said they will discontinue healthcare next year, while another 10% are undecided.
For those who will drop or who are considering ceasing healthcare for their employers, 82% said it was the cost of coverage that was the main reason. Another 14% said they would drop coverage because not enough employees were willing to participate in a health plan – that’s a sharp decrease from the 29% who responded the same way in 2018.
Additionally, 14% said they would either cease coverage or consider it because they believe the Affordable Care Act penalty for not providing coverage is less expensive than making it available to their employees. That’s a 4% jump from 2018.
The number of NJBIA member companies offering additional voluntary benefits showed some remarkable consistency from the 2018 survey, but revealed a decline from the previous survey five years ago.
Overall, 58% offer dental benefits – the same exact percentage as three years ago, but down from 63% in 2016. Forty-one percent said they offer vision benefits – which is also the same percentage as 2018 – but down from 47% in 2016.
Prescription card discounts were offered by 22% of respondents, just as they were in 2018. Flexible Savings Accounts were offered by 22% of businesses, a slight decrease from 24% in 2018 and down from 30% in 2016.
Twenty percent said they offer a Health Reimbursement Account, which is up 2% from 2018.
For the most part, the larger the company, the more likely employees are to be offered additional voluntary benefits. In fact, 100% of companies with more than 250 employees said they offer dental coverage, as did 87% of companies with 100-249 employees.
But there were some notable exceptions. For instance, only 58% of businesses with 250 or more employees said they were offering vision benefits. By contrast, 71% of businesses with 25-49 employees said they offered vision coverage.
For businesses with 1-24 employees, 47% offered dental benefits and 29% offered vision coverage.
With so many households reliant on employer-sponsored healthcare benefits, the coronavirus pandemic was bound to have an impact.
Respondents in the survey, however, showed some mettle during the crisis.
They were asked if they continued to pay the same proportion of health insurance premiums for some or all employees who were either told not to work, were laid off or were furloughed. Fifty-one percent responded with a yes, while only 6% said no. For the rest, the question didn’t apply because they either didn’t tell employees not to work, or they didn’t offer health coverage – or both.
This was as 51% said their total gross revenue in 2020 decreased substantially from 2019.
Predictably, only 2% of businesses that didn’t previously offer health benefits said they started coverage as a result, or response, to COVID-19.
The survey also showed the employers’ penchant for using federal and state COVID-19 relief to help maintain healthcare coverage. Overall, 78% said they submitted an application for such a program during the heart of the pandemic in 2020. Of those applicants, 95% said they received funds. Of those beneficiaries, 97% said they received Paycheck Protection Program loans and 25% said they received an SBA Economic Injury Disaster Loan.
Of those receiving funds, 49% of employers said they used those funds to help pay for health insurance costs. Fifty-five percent of those employers said they put up to 25% of their relief funds towards healthcare coverage costs, while another 6% said they applied 26% to 50% for those costs. Another 30% said they were unsure of the percentage of relief funds they used to pay health benefits costs.
One timely issue to emerge from the coronavirus pandemic are increased cases, reported by healthcare providers, of mental health and behavioral issues among employees, including worker anxiety. So far, however, only 11% of respondents said they were providing additional resources to staff to address those concerns.
Some of those resources listed by employers include mental health days and consultations through Employee Assistance Programs.
It’s not surprising news that health insurance premiums continue to rise. What matters most is how much New Jersey employers continue to meet the challenge of providing employee healthcare benefits at affordable rates – especially in light of the pandemic.
Overall, 67% of businesses said their covered benefits in their current plans were about the same in 2021 as they were in 2020. Eighteen percent actually said there were more covered benefits this year, compared to 14% who said there were less. These are good indicators that surviving businesses are maintaining benefits they had pre- and post-pandemic.
Adding to that were nearly half of respondents saying that they used federal and state COVID-19 relief on some level to help maintain healthcare coverage during the worst of times.
There was remarkable consistency on the percentage of businesses offering healthcare coverage and voluntary benefits compared to NJBIA’s 2018 Health Benefits Survey. And there was a decided jump in employers using Preferred Provider Plans from 2018, indicative of employers looking to balance lower costs while still giving employees more freedom of choice.
About this Survey
The NJBIA 2021 Health Benefits Survey, in conjunction with Tufts University, was conducted online through the month of July and early August. In total, 555 member companies responded to the questionnaire, with a margin of error of +/- 4.2%.
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