28th Annual Economic Survey Shows Boost in Employer Optimism, While Workforce Needs, Healthcare and Taxes Continue to Burden Employers

From PA Chamber of Business & Industry

The PA Chamber unveiled the results of its 28th Annual Economic Survey last week, which showed record high optimism among employers in terms of their confidence with the direction of Pennsylvania’s economy and their willingness to invest in their facilities and workers.  However, a jobs skills gap was listed for the first time as the biggest hurdle facing their businesses.  Also, ongoing concerns about the state’s tax structure and rising healthcare costs were among the leading issues they cited as barriers to economic opportunity.

According to the survey of 650 employers, job creators listed difficulties finding skilled and qualified employees to fill open positions as the biggest problem facing their companies.  This represents a stark increase over last year and has officially reached an historic high as business owners’ “top of mind” issue.  Given this rising concern and the increased attention to this problem, the PA Chamber is proud to include as part of its mission the “Start the Conversation HERE” initiative that is aimed at closing the skills gap in Pennsylvania by educating students, their families, educators and workers about family-sustaining jobs in the skilled trades and other employment trends in the Commonwealth. Visit StartTheConversationHere.com to learn more about this dynamic program and the PA Chamber’s ongoing efforts to tackle the skills gap in Pennsylvania.

As to other leading employer concerns in the survey, the PA Chamber remains committed to working with lawmakers to reduce tax burdens and address rising healthcare costs, which continue to increase despite efforts from the Trump administration to expand healthcare access. “We’re working to combat rising healthcare costs, which employers have cited as a major hurdle over the last ten years of economic surveys,” PA Chamber President Gene Barr said in a press release announcing the survey results. “Expanding access to affordable healthcare coverage should be a universal goal, which is why it’s so unfortunate that the state Insurance Department is resisting allowing many small businesses to take advantage of the new federal rule on Association Health Plans.  The goal of these plans is to achieve savings within the health care system and provide Pennsylvania employers with solutions to meet the needs of their workforce.”

Standing out as a positive takeaway from this year’s survey was the considerable improvement in employers’ perception of Pennsylvania’s business climate.  A record high 40 percent of employers now say the economy has gotten better during the last 12 months, up sharply from 25 percent last year.  Moreover, 26 percent of employers rate Pennsylvania as “very” business friendly, up from 15 percent last year and also a record high.  However, when asked to cite the top issues that should top business advocates and lawmakers’ “to-do” lists, they overwhelmingly cited controlling healthcare costs (at 66 percent) and cutting business taxes (at 50 percent) as the top two priorities.

The 28th Annual Economic Survey was conducted in August 2018 by Susquehanna Polling and Research, a Harrisburg-based public opinion polling company. To review the survey, visit the PA Chamber’s website.  

State Budget Includes Funding for Jobseekers and Existing Employees

Gerald Oleksiak, PA Secretary of Labor & Industry, recently discussed workforce programs while touring the Sunbury CareerLink office and The Link mobile services unit.

The 2018-19 State budget includes $30 million for workforce development initiatives. Funding includes support for career exploration, entry-level job seekers, and those looking to enhance their skills. One goal of the initiative is to double the number of people in apprenticeship programs in Pennsylvania by 2025.

Gerald Oleksiak, Secretary of Pennsylvania’s Department of Labor and Industry, provided an overview of PAsmart during a recent visit to the PA CareerLink office in Sunbury. Since the Apprenticeship and Training Office was established in 2016, the number of apprentices across the state has increased 27% to 16,000. In addition to $20 million for STEM career education, the budget includes $7 for apprenticeships and $3 million for industry partnerships. The United States lags significantly behind other countries, especially those in Europe, in the number of people in apprenticeships. 

Oleksiak also toured The Link, a mobile CareerLink services unit being piloted in the Central Susquehanna region. The Link provides access to job search services with staff assistance to rural areas. Jennifer Noll told her story to Secretary Oleksiak about how access to CareerLink services through The Link was life-changing in helping her get from an “unthinkable situation” to a job with the Central Susquehanna Intermediate Unit. Follow The Link on Facebook for a schedule of upcoming locations. 

Resources for people exploring careers and training, as well as entrepreneurs looking to start a business, are available online

Chamber Reduces Low Interest Loan Program Interest Rate to Three Percent

The Chamber’s Board of Directors recently voted to lower the interest rate for the Chamber’s low interest loan program to 3% on a permanent basis. Previously, the interest rate was an option of a variable rate at the Prime Rate or a fixed rate of Prime plus 50 basis points. Effective immediately, all otherwise qualified borrowers can access the loan program at a fixed 3% rate. 

The Chamber and its board recognize that starting and running a small business can be a challenge, particularly in the initial startup phase when cash flow can be short. At times, business owners may not have the ability to access a loan from a financial institution, or at least a loan that fits their needs. Therefore, the Chamber has set aside a fixed amount of funds for this low interest loan program. 

The minimum loan amount in this program is $5,000 and the maximum is $20,000. Loan terms should not exceed five years based off the useful life of collateral being pledged. To access the low interest loan program, applicants must be a member of the Columbia Montour Chamber, as well as meet all of the other qualifications laid out in the application guidelines

In addition to the regular low interest loan program, the Chamber is also offering special bridge loans with a special low interest rate of 3% to member businesses affected by the recent flooding in the area. These loans also have a 3% interest rate and are available through Dec. 31, and are for a maximum term of 30 months and a maximum amount of $10,000. 

For more information on the low interest loan program, special bridge loans or for questions, contact Fred Gaffney at 570-784-2522 or email

Promoting and Encouraging Downtown Businesses

Downtown Bloomsburg Inc. (DBI), a subsidiary of the Chamber, is pursuing projects to enhance the downtown while continuing to support existing businesses and encourage new business development. 

The organization is working with a Bloomsburg University intern to update its database of downtown businesses and commercial properties. Ben Rance will be stopping in to businesses and contacting property owners to gather basic information. This will help DBI stay in communication with business owners and managers, market the downtown, and also market available commercial spaces. The DBI Board thanks businesspeople in advance for providing information.

DBI will also be welcoming Bloomsburg University alumni and parents to Town. Homecoming is Oct. 6 and Parents and Family weekend is Oct. 12-14. A downtown brochure is being updated to help visitors find stores, restaurants, and services. The brochure will be included in information packets provided for Parents and Family Weekend.

Could Self-Funding be the Strategy For You?

From ChamberChoice and Smart Business Pittsburgh

Self-funding is not a new strategy. But while historically utilized for large employer groups, its availability for medium and small employers is new. And the concept is showing impressive results when it comes to giving employers greater input in health plan design and more control over rising medical benefit costs.

Smart Business spoke with Domenic Pascucci, consultant at JRG Advisors, about the benefits of a self-funded health plan.

Why is control of a health plan so important?

Employers need to focus on where their medical dollars are spent to accurately implement and assess a benefits strategy that stabilizes costs. Employers that cling to their fully insured plan must face the reality that they have no control. They wait until 60 to 90 days from their renewal, hoping for a favorable renewal offer, but they’re often slapped with an increase. And so, the last-minute scramble begins — they modify their plan design, switch insurance companies and shift costs to employees.

These methods are a temporary solution at best. They never serve as a long-term strategy to effectively or efficiently manage an employee benefits program. In a self-insured or self-funded health plan, the employer takes on direct financial responsibility for employees’ health care costs. Rather than being in a large, fully insured risk pool, the self-funding employer takes on the risk for its group.

Why do some employers hesitate to switch?

Self-funding has grown in popularity and proven to save money, but ‘taking on risk’ can be an uncertain and intimidating concept. Many employers are misinformed and hesitate to make the leap from fully insured plans. A Sun Life Financial study found that nearly 50 percent of employers were skeptical of self-funding because of the fear of financial risk and 40 percent were fearful of incurring catastrophic claims.

Most self-funded employers, however, purchase stop-loss insurance to cover catastrophic claims, which protects the employer and caps the financial risk exposure. Furthermore, self-insured health plans are exempt from most state insurance laws and mandates. Not having to pay regular premiums to an insurance company can produce substantial savings. An employer is only paying for claims that actually occur in the self-funded model.

How do employers know if their organization is a good candidate for a self-funded plan?

Self-funding is not the right fit for every employer. Some careful research and analysis should be conducted by an experienced consultant that specializes in this type of funding arrangement. Identifying an employer’s financial situation, risk tolerance, cash flow, historical performance of claims and coverage needs are all factors that will help an employer decide.

What do employers need to know about setting up a self-funded plan?

If employers are viable candidates, their broker should guide and educate them on making the transition. Once an employer is committed to a pre-determined strategy that meets the company’s needs and affordability, a financial model should be developed. It will help identify potential outcome scenarios that will not only reduce the employer’s concerns, but also reduce the risk of incurring a large financial pitfall from a costly claim. Various stop-loss deductibles and their impact should be modeled out.

Once the financial model is set up, the broker can examine plans and benefits to find those that best suit the needs of the employer and employees. This is also a good time to review the responsibilities for managing the cost and affordability of the self-funded plan. To make the transition as smooth as possible, the self-funded plan should be similar to the fully insured plan. Finally, employers need a clear understanding of a third party administrator’s role, the various levels of insurance, network availability and which networks are best suited for them.

What’s the takeaway for employers?

If your goal is to take control of your benefits program and rising costs, it’s worthwhile to examine if self-funding is a solution for you. Seek the guidance of an experienced insurance professional who can provide a detailed analysis of your liability — only then will you be informed and ready to decide whether this strategy is for you.