The Health Insurance Tax (HIT) on fully-insured premium markets imposed by Obamacare could raise $87 billion over the next ten years and also cost between 125,000 and 249,000 jobs by 2021, according to a study.
“Although the tax is formally structured as a fee on health insurers, recent analysis has determined that virtually all of the tax burden will be passed on to the purchasers of insurance,” says the study by the National Federation for Independent Business Research Foundation.
“The cost of health insurance is still a top ranking if not number one issue that’s probably the most unidentifiable per budget year,” Amanda Austin, director of federal public policy at NFIB, told The Daily Caller News Foundation.
“They just don’t know what it’s going to be at renewal, what new costs are going to be borne out in their premium,” she said. “And that’s the aggravation year in and year out, that they never seem to go down, they only seem to go up, and this will potentially only aggravate the overall cost factor.”
Small businesses and the self-employed comprise 87 percent of the fully-insured market. The NFIB study estimates the tax will raise the cost of employer-sponsored insurance by 2-3 percent, a cumulative cost of nearly $5,000 per family.
“It just seems to me as a small business owner that tax cuts always have a sunset, like the Bush tax cuts… I’ve never heard of anyone say a tax increase is expiring at the end of the year. They seem like they’re built in forever,” small business owner John Culler shared with The DC News Foundation.
Culler owns a small marketing and communications firm in West Virginia with 11 employees. Culler explained that he spends an average of $13,000 a year for family coverage for each employee. He said providing health insurance is both a good recruitment tool and the right thing to do.
“We’ve always felt it was the right thing to do,” he said, though now, “It just keeps getting harder and harder.”
A coalition of small business advocates and interest groups have joined forces to get the tax repealed. Recently, there has been movement on Capitol Hill with a bipartisan bill with over 220 cosponsors in Congress.
“We want action next year, if not lame duck,” Austin told TheDC News Foundation.
“Business owners understand what this tax is and understand that it’s going to impact their premium and therefore they want their voice to be heard on it.”
“It was a bit of an irritation for us that small business and individuals, which are the main purchasers of fully insured plans, which is where the industry bares the risk, they’re absorbing most of it,” Austin said, recalling when the tax was being considered for the bill that would ultimately become the Patient Protection and Affordable Care Act.
“We were very concerned about this because as an advocate for the business community, we know very well pass-through taxes and how these things are easily borne out to the end user,” Austin added.
She said about the result, “this is a tax on business… how exactly did we arrive at this when we were trying to lower the cost for small business?”