By Mike Munoz
It’s clear that New Jersey values stable, affordable coverage for all consumers. Last year the Governor signed into law legislation requiring every taxpayer to have health insurance. The goal was to stabilize the consumer market. When more people buy insurance, it helps balance the risk pool. It also helps keep plans affordable.
This state also values consumer protections. In fact, many of the provisions passed under the Affordable Care Act (ACA) in 2014 were already in place here, so it’s not surprising there was an effort to create a market solution to best serve the people of New Jersey during a time of so much uncertainty.
The Small Employer Health (SEH) Benefits Program needs similar reform.
A market in flux
The SEH Program in New Jersey has evolved in recent years. The onset of the ACA sought to provide more affordable options to employees of small businesses and changed the definition of a small group. But, we also saw the introduction of self-funded products in the small group market, which fail to provide the same consumer protections as traditional fully insured plans.
Many small businesses with 2-50 employees have opted to self-fund their health insurance, which comes with stop loss insurance to help minimize risk. Self-funded plans can offer coverage based on health risk assessments and often choose not to cover businesses with less favorable risk profiles. This means higher costs for those small businesses that remain in the SEH and higher costs for their employees.
Those higher costs are a key factor in the SEH’s decline. According to the New Jersey Department of Banking and Insurance, the number of participants in New Jersey’s SEH Program has fallen from 900,000 in 2000 to fewer than 320,000 in the first quarter of 2019.
A coverage concern
Some argue that self-funded plans are more affordable, however that’s not the whole story. Self-funded plans do not provide the same consumer protections, nor do they offer the same required benefits that New Jersey strongly believes is necessary for fully insured plans.
Why shouldn’t small business employees have the same protections as everyone else in the state?
For example, self-funded plans do not have to cover essential health benefits, like preventive care and prescription drugs. They also do not have to cover New-Jersey mandated benefits like bariatric surgery, comprehensive autism services, infertility treatments and hearing aids.
Free market competition works only if the entire market is playing by the same rules.
A pivotal time
We understand that small businesses have competing financial pressures and health care is at the top of the list. However, the health care system only works properly if everyone participates and plays by the same rules. If the market continues to move in the direction it has been going, costs for small businesses in the SEH will likely continue to increase over time.
Senate Bill 3270/Assembly Bill 5095 would prohibit stop loss policies in the small group self-funded market. If passed, the bill would ensure all the consumer protections that New Jersey believes in are offered to every resident of the state, while helping to keep the SEH a competitive, robust market that our small business community deserves.
This bill reflects New Jersey policy goal of providing affordable, accessible coverage to every New Jerseyan. We have taken the steps to move in the direction of a sustainable individual market. It’s time to do the same for our small group market. New Jersey’s small businesses deserve the same protections.
Mike Munoz is market president for AmeriHealth New Jersey.