News Item

Business groups want to eliminate a proposed tax on health insurance. Lamont has already blocked a plan to expand state-subsidized health insurance.

Originally published by the Hartford Courant (Link)

With an expanded state role in health insurance dead in this year’s session of the General Assembly, businesses on Monday called on lawmakers and Gov. Ned Lamont to pull the plug on a proposed $50 million health insurance tax.

“Simply put, this HIT tax is not necessary in order to expand affordable health coverage in our state,” they said, referring to a health insurance tax that would be used to subsidize coverage on the Connecticut health insurance exchange. “In fact, if passed, a new state HIT tax will cause significant financial strain on middle class families, workers, and local businesses who purchase their coverage on the fully insured marketplace.”

Business groups opposed to the tax say it would add nearly $30 a year per individual in health insurance costs. Democrats pushing the bill say the $50 million generated by the tax would be used to subsidize health insurance that’s out of reach on the Obamacare exchange.

The letter was signed by two dozen business groups, including the Connecticut Business & Industry Association, National Federation of Independent Business, Connecticut Restaurant Association, Connecticut Food Association, Connecticut Construction Industry Association and Connecticut Farm Bureau.

It could be more difficult to stop the proposed tax than to force legislators to strip out a so-called public option that would have expanded a municipal insurance pool to include small businesses, nonprofits and individuals.

Lamont opposed the so-called public option, but has supported the health insurance tax. Supporters say that because Congress has halted a $300 million industry tax, a state tax of $50 million is a reasonable way to make health care more affordable.

Businesses say congressional action provided $500 in savings for the average worker covered by a family health insurance plan and premiums in Connecticut because the $300 million federal tax was eliminated.

“We respectfully ask that you protect those dollars saved, recognizing that reinstitution of even a portion of the HIT tax will only drive up costs in our state,” businesses told Lamont and legislators.

Federal money coming to Connecticut includes $85 million for expanded health care subsidies on the exchange, businesses told Lamont and lawmakers.

“We do not need to implement an additional tax that will restrict health care coverage for Connecticut’s working class and create greater economic uncertainty,” they said.

Rep. Kerry Wood, a moderate Democrat who co-chairs the legislature’s insurance committee, said the tax “absolutely’’ should be dropped before the General Assembly adjourns June 9. The $85 million over two years in coronavirus stimulus money has helped eliminate the need for the public option, she said.