COOKEVILLE — Small business owners and others associated with area businesses attended a recent round table with Congressman Diane Black to discuss the impact on healthcare reform, namely the tax called the Health Insurance Tax that is now being implemented.
According to the group Stop the HIT, the HIT raises the cost of small business health insurance premiums, amounting to $159 billion in assessment between 2014 and 2024 and is levied on health insurance companies. This cost is passed down to consumers in the fully-insured marketplace, where nearly all small businessees and the self-employed purchase their coverage.
“The HIT was called a fee, but that’s not my definition of a fee,” Congressman Black said. “With a fee, you get something back — you pay a fee to get into a park, for instance. With this tax, you get nothing back.”
She said this tax will cost the employer $500 per employee per year.
The tax was buried until recently when it began to get implemented.
“There’s bipartisan support in the House to repeal the tax,” she said. “But in the Senate, it’s not so much bipartisan.”
The Congressional Budget Office estimates that this tax raises $101.7 billion — over 10 years.
“Over 20 years, it’s even larger,” she said. “It’s very concerning.”
According to the Stop the HIT, $8 billion in revenue has been collected in 2014 and that number will climb to $14.3 billion by 2018 and continues to rise proportionally with premiums year upon year.
Jessica Parrott with the Rains Agency noted that she is seeing a trend among small businesses doing away with certain plans.
“About 40 percent of my groups have done away with the group plans,” she said.
It is only paid on health insurance policies sold in the fully-insured market, which is the primary market where small businesses and consumer purchase their insurance policies.
“Obamacare’s costly health insurance tax is a pathway to higher premiums and fewer jobs that deals an especially unfair blow to the small business community,” Congressman Black said.
According to the Stop the HIT, the tax impacts 1.7 million small businesses, 11 million employees and the self-employed who purchase in the individual market, and 23 million employees who are covered by their employer. And according to former Congressional Budget Office director Doug Holtz-Eakin, on average, the HIT will cost each family about $5,000 in higher premiums over the decade.
“There have been some people helped by Obamacare, but it’s disturbing that one-sixth of the economy was turned over (to the government) to do this,” Congressman Black said. “It could have been done better.”
Representatives from TUTCO, CHC Mechanical Contractors, IWC, REI, and J&S Construction also attended the meeting.
“Insurance rates have gone up even before Obamacare was implemented,” Tom Jones, general manager at REI in Algood, said. “We don’t know when it will stop.”
Tennessee is home to more than 566,000 small businesses that employ more than one million workers.
Congressman Black is a co-sponsor of HR 928, a bill in the House of Representatives that would repeal the HIT and permanently relieve small businesses of the tax.