A new survey of New Jersey’s small businesses finds the cost of employee health benefits is the No. 1 challenge.
An overwhelming majority of member companies offer health care coverage to their workers, said New Jersey Business and Industry Association president Michele Siekerka.
“Eighty-three percent want to keep their employees, so employee retention is significant as a reason for providing benefits, but also employee attraction,” she said. “Fifty-eight percent provide benefits in order to attract employees and keep a competitive package.”
To deal with the rising costs that lower profits, Siekerka said, many employers are delaying investments and wage increases.
About a third said they’re limiting wages to keep the benefits.
“The benefit packages are very important to attract employees. So a company is going to look there and try to contain that as much as they can and keep that,” Siekerka said. “But it’s going to give somewhere, and we’re going to see those wages flatten more if we put more mandates on business.”
Companies also are shifting more of the costs of health care benefits to employees with higher worker contributions to premiums, and increases in deductibles and co-pays.
“They pay 74 percent of the costs,” she said. “But what’s important about this is, in 2014, our members paid 80 percent. And then 34 percent of members are now offering less expensive high-deductible plans compared to 24 percent in 2014.”