TRENTON - Department of Banking and Insurance Commissioner Elizabeth Randall today announced the results of an annual survey showing that the insurance companies and health maintenance organizations selected by most small employers in New Jersey kept rising health care costs in check by offering managed health care options in 1997.
"In the face of rising health coverage costs nationwide, New Jersey small employers have choices to keep their health care costs down," Randall said. "New Jersey's health reform law has spurred competition and produced lower-cost alternatives to traditional health coverage for small employers. At the same time, small employers and their employees have guaranteed access to coverage, regardless of health status or claims history."
The survey required all carriers in the small group market to report rates effective January 1, 1997 for a model small employer group with six employees and dependents. The 1997 rates for the most popular standard health plans, as reported by the carriers selected by over 80 percent of small employers, were lower than 1996 rates by one-half of a percent, on average. Carriers kept rates in check by offering a spectrum of plans linked to networks of physicians and hospitals. There were significant differences among the plans offered and their costs from 1996 to 1997:
"This survey shows that small employers are able to keep down their health care costs and maintain the same level of comprehensive benefits by choosing among managed care options," said Kevin O'Leary, executive director of the New Jersey Small Employer Health Benefits Program ("SEH") Board, which oversees the small group market. "This highly competitive market offers a broad spectrum of managed care alternatives, from PPOs to HMOs. On the other hand, small employers who continue to choose traditional indemnity coverage over some form of managed care plan are likely to see their costs rise."
Under New Jersey law, a small employer with from two to 49 full-time employees qualifies for health benefits plans that are guaranteed issue, which means carriers must issue plans and renew them for any small employer that pays the premiums. In addition, all plans feature modified community rating, which permits carriers to vary rates only according to the size of the group, the age and gender of the employees, and the location of the business in New Jersey. Carriers may not deny coverage or charge more based on employees' health status or claims history.
Small employers may obtain a copy of the 1997 premium comparison survey
and a free Buyers Guide about health coverage for small employers by