In New Jersey, the health insurance market for small businesses is in peril. Enrollment is dropping and premiums are rising. In 2022 alone, premiums jumped an alarming average rate of 10.4 percent.
In 2005, nearly 1 million employees of small businesses and their families had health insurance through the New Jersey’s small group market. Today, according to the NJ Department of Banking and Insurance’s data from 2020, the number is around 295,000.
Most of the businesses in New Jersey are small businesses. If the downward spiral continues, small businesses may find it impossible to provide state regulated health insurance for their employees and their families. State regulated products offer employers important protections such as making sure that they are not discriminated against or denied insurance based on the gender or health status of their employees. The state legislature, state regulators, and other decision makers must act soon — before health insurance companies begin planning their 2023 rates.
At the Quality Institute, we’ve been sounding the alarm for some time. In 2020, we released a report that we just updated. The new report explains how we got here and outlines nine policy actions to strengthen and support the small group health insurance market. The report includes tax credits, benefit design changes, and other short- and long-term changes to modernize this market. The report and its recommendations were created with input from a range of health care and insurance experts. Some of the recommendations are straightforward; some are more controversial. We need healthy debate, additional ideas, compromise, and a path forward. What we don’t need is inaction.
The state of New Jersey rightly expanded Medicaid and actively supported and strengthened the individual market. These steps enabled more people than ever to be insured in our state. We applaud all these efforts. But the State should not ignore the small group health insurance market, nor leave small employers and their employees struggling to find affordable, and consumer protected health benefits.
Small employers (those with 2 to 50 full-time-employees) are not required by law to provide health insurance to their employees. These organizations and companies know the value of health insurance to their employees and their families — and their ability to attract and retain workers. They want to do the right thing for their employees. The COVID-19 pandemic showed all of us the necessity of quality and affordable health insurance for everyone.
Now is the time to modernize and save the small group market. The nine proposed actions in the report are a starting point. Please share the report and work with us to save this important market.