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(Opinion) Order Up: Restaurants Need Immediate Relief from Health Insurance Tax

Opinion piece re-posted from RealClearPolicy 
By Shannon Meade

Restaurants create jobs and opportunities for communities of every size, economic makeup, and geographic location. Representing ten percent of the U.S. workforce, the restaurant industry plays a dynamic role in our economy. However, for the over one million American restaurants, the Health Insurance Tax (HIT) has put their role of driving economic growth at risk.

Unless Congress acts, restaurant owners and their 15.3 million employees will be hit with additional premium hikes due to the HIT. The HIT is levied on participants in the fully insured market, where 87% of small businesses purchase their health coverage. If not repealed, restaurant employees will see year-over-year increases in their healthcare costs.

Nine out of ten restaurants are considered small businesses, and seven of 10 are single-unit operations. Our industry is not alone; for the 28.8 million U.S. small businesses employing nearly half of America’s workforce, the cost of providing healthcare has risen at a staggering and unsustainable rate. These increasing healthcare costs jeopardize restaurants’ ability to hire new employees, provide raises, offer comprehensive healthcare packages, invest in new equipment and support charitable causes. In fact, a local Minnesota restaurant group that we have worked with — operating ten locations across the Twin Cities region — estimates that the HIT will increase their healthcare costs by almost $58,000 in 2020 alone.

Restaurant owners, such as Tom Boucher, CEO of Great NH Restaurants, Inc. in New Hampshire, say the HIT undermines their goals as business owners. “Establishments like ours need to attract and retain motivated professionals in order to provide an exceptional dining experience with quality customer service,” says Boucher. “Skyrocketing health insurance costs already make this increasingly difficult and factors like the health insurance tax will only make matters worse.”

High quality, affordable healthcare is critically important to the restaurant and hospitality industry, our employees and the communities we serve. We’re pleased Congressional leadership from both sides of the aisle recognize the far-reaching economic benefits of fully repealing the HIT and have chosen to include this effort in their end-of-year Health Extenders package.

We urge Congress to act now – repeal the HIT, once and for all.

Shannon Meade is the vice president of policy and legal advocacy at the National Restaurant Association. The National Restaurant Association is a member of the Stop The HIT coalition. Learn more about Stop The HIT at