Pub. 13 2014-2015 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 1 , 2 0 1 5 16 new jersey auto retailer Bendin g the Rising Trend of Health Insurance Premiums BY BRUCE MAZZARELLI N J CAR, in cooperation with Fotek Insurance Solutions, Corporate Synergies and The Mironov Group, recently completed its first annual 2014 Health Insurance Survey. As a first year project, we were able to gather extensive statistics about how health insurance is currently offered by dealerships across the State. The statistics include information regarding plan types, copay levels, premiums, and employee contributions. This information should prove very useful to dealer principals and senior management, as a way to gauge how their dealership’s health insurance plan is operating relative to the industry average. With the intent to complete the survey on an annual basis, we will have the ability, in future years, to identify New Jersey dealership trends by comparing year-over-year results. There are some clear indications to draw from the survey related to plan design. Rising copays, which in the past may have been considered too high to satisfy employ- ees’ needs, have now become the norm, with specialist copays as high as $75. Many dealerships are utilizing in-network only plans, such as HMOs and EPOs, as the sole health insurance offering. Regarding prescription drug benefits, plans that provide for coinsurance coverage rather than copays are now common. High Deductible Health Plans (HDHPs), often paired with a Health Reimbursement Arrangement (HRA), can be seen in dealerships of all sizes across the State. The stats referenced paint a picture of reduced benefits compared to the past, likely as a result of the double digit increase in costs seen in the health insurance industry for the past decade. Providing health insurance is a significant expense, negatively impacting the bot- tom lines of NJ CAR members. “Single coverage” annual premiums average over $6,500. The survey points to average “family coverage” premiums in excess of $1,000 a month, regardless of plan design. Plans with out-of-network coverage, such as POS and PPO plan, are nearly double that. In fact, the average annual family premium for respondents to the survey is $19,279. When one considers that the average deal- ership is paying for 56% of the single premium on behalf of employees, and 45% for families, it is easy to see how rising health insurance costs can hurt financial results.