In last week’s blog post, we shared how many small businesses are worrying about how to cope with the health insurance cost increases they currently face or anticipate in the near future.
By now, you’re likely well-aware of what is driving these cost increases for small businesses. Aside from the typical rate increases that most Americans face annually, small businesses and their employees have another cost driver to contend with: the health insurance tax, or HIT.
The small business HIT comes from a little-noticed provision in the Patient Protection and Affordable Care Act (PPACA). The HIT raises health insurance costs for policies purchased on the fully-insured market, where 88 percent of small businesses buy insurance for their employees. While the president has given labor interests, large corporations and other groups carve-outs to protect them from harmful aspects of the health care law, small business concerns have fallen on deaf ears.
For tens of millions of people – small business employees, the self-employed and others – the HIT cannot be so easily ignored. The average family will see their rates increase $500 per year because of the HIT. For others, the HIT’s ramifications will be even worse. According to a study conducted by the NFIB Research Foundation, the $100 billion HIT is expected to reduce private sector employment by as much as 262,000 by 2022. Additionally, a recent POLITICO article argued that the PPACA’s effect on small business could be a political issue in the 2014 election. It’s easy to see why: higher taxes and fewer jobs is rarely a formula for success at the polls.
All this could be avoided if small businesses and their employees were just given a fair shake. Democrats and Republicans alike – more than 250 in all – have signed on to support legislation to repeal the HIT. A separate measure to put off implementation of the HIT for two years has garnered bipartisan sponsors as well. In today’s political climate, the bipartisan support for these bills demonstrates just what a simple, common-sense decision protecting small business owners and their employees from the HIT should be.
The HIT may officially go into effect beginning the Jan. 1, but our fight to bring fairness to the millions that will suffer under it will not stop. We look forward to continuing our effort to repeal the HIT in the New Year and look forward to your support. Contact your Member of Congress to share your concerns about the HIT, and follow our Facebook and Twitter pages to stay up to date on what we’re doing.