Opinion: Texas Businesses to Lawmakers

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Texas Businesses to Lawmakers: Don’t Add to Employer Healthcare Costs

As Texas continues to lead the nation in economic growth, the mounting challenge of rising healthcare costs threatens to undermine our success. For businesses across the Lone Star State, providing competitive healthcare benefits is both a matter of employee satisfaction and a cornerstone of our economic stability. Healthcare costs remain a top concern for the state’s businesses, and government mandates toward employer-sponsored healthcare benefits present a significant challenge to maintaining competitiveness and supporting employees.

The Texas Association of Business (TAB) conducted the 2024 Texas Employers Healthcare Survey, gathering comprehensive insights into these challenges through over 200 responses from individual businesses across the state, collected via TAB’s members and chamber partners. The survey results offers a stark warning: without decisive legislative action, these escalating costs could jeopardize the state’s economic engine and constrain Texas businesses’ capacities for growth and employment, adversely raising prices for their goods and services. Lawmakers must act to shield employers from unsustainable financial pressures and ensure that healthcare remains an asset, not a liability, for Texas businesses.

According to the survey:

• 85% of Texas employers believe that healthcare costs are increasing at an unsustainable rate.
• 34% of respondents believe that healthcare benefits have become the fastest-growing expense in their business, surpassing even wages.
• 51% of surveyed employers say these escalating costs have directly interfered with their ability to raise salaries or hire new employees

More than half of respondents also concluded that government regulation of healthcare coverage is the cause of increased healthcare costs and oppose the introduction of any new state mandates that would further increase this cost.

This year’s Survey reflects many of the same – if not increased – concerns of the Texas legislature on the rising cost of healthcare for businesses from TAB’s 2022 Healthcare Survey. Our businesses’ concerns are not new.

For many Texas businesses, these costs are more than just numbers; they represent tangible barriers to growth, workforce investment, and the moral commitment to provide for their employees.

In Texas, where employer-provided health coverage insures roughly 14 million people, healthcare benefits are integral to attracting and retaining top talent. Over 75% of survey respondents identified health benefits as a crucial factor in workforce retention, with 36% ranking it as the most important benefit offered.

Yet, the rising cost of premiums – the primary reason 75% of businesses do not offer insurance – threatens employers’ ability to provide these healthcare benefits. These findings highlight the significant financial burden that rising healthcare costs impose on employers, often forcing them to reevaluate their ability to provide essential benefits.

The survey uncovers the growing opposition among Texas businesses to new state-imposed mandates that could further increase the cost of employer-sponsored healthcare benefits. More than 57% of respondents strongly oppose additional state regulations and more than 90% of employers support requiring cost estimates for any legislative proposal affecting health benefits. Texas businesses are calling for more transparency and accountability in policymaking.

We must not be complacent with policies that, in totality, infringe on the freedom and free enterprise that allows Texas to maintain a competitive and expansive economy.

Texas employers make clear that they want the Legislature to address the root causes of rising healthcare costs, not to pile on additional burdens. Specific solutions identified in the survey include:

• Transparency: 76% of respondents advocate for requiring healthcare providers to disclose their prices publicly.
• Flexibility: 73% want the option to purchase more affordable insurance plans without state-imposed mandates exceeding federal requirements.

Texas’ economic vitality depends on sensible healthcare policies that prioritize transparency and flexibility. Lawmakers must resist the temptation to impose additional mandates on employer-sponsored healthcare benefits. Instead, they should address the underlying issues driving up costs to ensure that Texas remains a place where businesses thrive, and where employees are protected.

To read more about the findings from TAB’s 2024 Texas Employers Healthcare Survey, please click here.

Glenn Hamer, President & CEO, Texas Association of Business

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