As New Jersey companies adjust to the requirements of the Affordable Care Act, they’re paying more for health care coverage.
About 85 percent of the more than 600 companies surveyed by the New Jersey Business and Industry Association say the cost of employee coverage rose in the past year. Smallest companies had the biggest increase, paying 24 percent more.
Still, about 70 percent of companies plan to continue providing those benefits to help attract and retain workers, said Christine Stearns, association vice president.
During a Thursday news conference in Trenton, Stearns cautioned that the rising costs pose a serious threat.
“If health care cost increases are not curbed, businesses will not be able to afford the extra costs,” she said. “The reality is double-digit increases in health benefits aren’t sustainable in an economy that is growing at less than 2 percent per year. It’s already forcing companies to make really difficult decisions.”
Nearly half of the employers surveyed say they have lower profits, while 35 percent are limiting raises so they can continue employee health care coverage.
“Forty-five percent of companies lowered their own profits in order to pay for the higher health care costs, 35 percent either froze wages or limited wage increases, and 22 percent delayed investment in their businesses,” Stearns said.
Many employers are also increasing deductibles and employee contributions or switching to plans with reduced benefits.
The business group is urging state lawmakers to hold the line on mandates that would continue to add to the cost of purchasing health insurance.