Survey Finds NJ Businesses Have Additional Healthcare Cost Containment Options Available
10/06/2009
As healthcare costs continue to rise, many New Jersey business owners have additional cost-containment strategies available to implement that they were previously unwilling to entertain during tighter labor markets, concluded the 2009 J.H. Cohn Health Benefits Survey. J.H. Cohn LLP, in conjunction with Cohn Benefits Consultants, conducted its second survey of CFOs throughout New Jersey in an effort to gauge how the rising costs of health benefits are affecting businesses in the state. The survey was sent to approximately 2,000 financial executives at New Jersey-based companies.
Employers who implemented a variety of healthcare consumer-based cost containment programs experienced the lowest costs. The survey found a significant number of employers, both large and small, still do not utilize such programs to manage their costs. Accordingly, smaller companies (defined for this purpose as those with less than 200 employees), paid substantially more in premiums not just due to economies of scale, but also because they had fewer cost controls in place.
Other key findings of the 2009 J.H. Cohn Health Benefits Survey include:
- Healthcare costs continue to rise at an alarming rate on a year-to-year basis. Thirty-six percent of respondents reported double-digit increases.
- Employers are increasingly offering employees High Deductible Health Plans. Overall, 37 percent of respondents offer a High Deductible Health Plan, compared to only 11 percent in the Firm’s 2007 survey.
- A disproportionate number of small employers continue to offer employees only one health plan option. Approximately 80 percent of firms with greater than 200 employees offer a choice of plans while only about half of the companies with 200 or fewer employees do.
- Only 37 percent of respondents require generic substitutions for prescription drugs and 35 percent require the use of mail order prescription drug services for maintenance drugs. This is a cost control measure that would be a win-win for both the employer and the employees.
- One-third of all large employers surveyed have implemented a wellness program and they are four times more likely to have a wellness program than smaller companies.
“These findings confirm that there is much that employers can still do to contain healthcare costs, and that these efforts pay off in reduced premiums,” said Alex Chernoff, a J.H. Cohn principal and president of Cohn Benefits Consultants. “In the current economic climate, it has become imperative for employers to make their investment in employees’ health plans as efficient and effective as possible. With proper planning and sound counsel, cost savings initiatives are available to all employers, regardless of their size.”
For a copy of the survey report, click here.
To speak with Alex Chernoff of Cohn Benefits Consultants, please contact Amy Koeppl, Marketing Communications Director, at 877-704-3500.