The annual Health Benefits Survey from the New Jersey Business & Industry Association has revealed a significant decrease in companies offering health insurance benefits to their employees, but, of those that are, more are cutting into their profits to do so.
These trends are emerging as health care continues to be the No. 1 cost concern for businesses in the state.
This year, 78 percent of companies overall said they are offering health care coverage, which is down from 85 percent in 2016.
For companies with less than 24 employees, that number drops to 70 percent.
Of those that stopped offering health care, 92 percent said it was due to the cost.
Cost increases have been about the same across company sizes — more than 14 percent for companies with less than 24 employees, and the same increase for companies with more than 250 employees.
The primary reason for those who continue to offer health care is employee retention. Seventy-five percent of companies cited retention as the reason, and fewer than 15 percent said it was to avoid the ACA penalty for not providing.
But the tradeoff for employees has been significant.
While 40 percent of employers are eating into their profits to keep up with the costs of insurance, the effects for employees has increased.
Companies are still taking on at least 70 percent of the cost, but they are cutting down in other ways.
Employers are limiting wage increases or freezing wages altogether — 27 percent responded that they were — but less-popular strategies included cutting employees, reducing non-health benefits, delaying investments and reducing employee hours.
Still, 40 percent of businesses said they haven’t changed their strategies in order to keep up with costs.
In addition to health care benefits, the survey also touched on some key initiatives recently introduced in the state.
The state has implemented paid sick leave as a mandate, which 54 percent of respondents said does not concern them or their business.
More than 800 companies were surveyed for this report in July.
The full survey can be read here.