After the Supreme Court ruled in late June that the Patient Protection and Affordable Care Act (aka “Obamacare”) was constitutional, the law will go into full effect in January 2014, complete with all the new regulations and taxes to pay for it. One of those taxes, the Health Insurance Tax, or HIT, will be charged to insurance companies that offer health insurance policies. Revenues from the tax will pay for the health insurance exchanges under the law.
The Delaware Restaurant Association, a member of the “Stop the HIT Coalition,” hosted a meeting at Jake’s Seafood in Rehoboth to discuss the increased costs the tax will bring to business owners in Delaware. The coalition says the insurance companies will pass the cost of the tax on to businesses that have health insurance policies with them. That will then force the businesses to make decisions on how they’ll save money, by either hiring fewer employees, cutting the hours of their current employees or even laying some off, delaying purchases of new equipment, cutting back production, or raising prices. Carrie Leishman, the president and CEO of the Delaware Restaurant Association, says the restaurant industry will feel the most pressure from the rising costs, since their average profit margin is only about three percent.
Business managers, such Jake’s General Manager Dan Klemkowski, says he and his father have been discussing how the implementation of the healthcare law will impact their restaurants. He says business owners should start considering how they’re going to prepare for the new taxes under the law now; otherwise, they’re going to be hurting when the law and its taxes go into full effect.