Small businesses will bear the brunt of a tax on insurance companies aimed at helping to pay for the Patient Protection and Affordable Care Act, better known as Obamacare, members of a national business group said Tuesday at two informal meetings in the Richmond area.
The Health Insurance Tax, scheduled to go into effect in 2014, looks like it will penalize health insurance companies, said Nicole Riley, state director of the National Federation of Independent Business.
“But frankly, it will just be a pass through” to employers and then consumers, Riley said at a meeting held Tuesday afternoon at Mechanicsville Drug Store.
NFIB members told one business owner attending the meeting that the provision could costs small-business owners an average of $500 per employee.
The Mechanicsville meeting and one earlier in the day in Glen Allen drew only a few people because of short notice, but business owner Melissa Ball took the opportunity at the first meeting to educate herself on issues that could affect her decisions in renewing a health insurance policy for her employees next spring.
“I’m here for the tutorial because 2014 is not far away,” said Ball, owner of Ball Office Products in Henrico County. “Our plan renewal is in May. I need the education.”
Ball doesn’t employ enough people to trigger the law’s requirements for the business to provide coverage or pay a penalty, but small-business advocates say that won’t protect her or other small firms from the health insurance premium tax because it will affect all fully insured policies.
Businesses with 50 or more employees face a mandate to provide insurance.
Insurers are expected to pass on the extra costs to their customers. However, businesses and governments that cover their employees through self-insured plans won’t be affected by the tax.
“This thing irrefutably targets small business,” said Brian Plum, executive vice president and chief financial officer of Blue Ridge Bank, who has been speaking about the issue on behalf of the Stop the HIT Coalition.
Plum’s message on behalf of the National Federation of Independent Business and other members of the coalition is to target the tax, not the entire Affordable Care Act, for repeal.
“You can be 95 percent for the Patient Protection and Affordable Care Act and disagree with this provision, he said.
The challenge of repealing the provision would be replacing the $8 billion it would generate in 2014 alone, as well as more than $14 billion in 2018 and beyond.
Mechanicsville Drug Store owner and pharmacist Tommy Thompson said he hosted the meeting at his store because he wants to make sure small-business owners understand the impact of the health care program.
“As a pharmacist, I am exposed to a lot of those kinds of questions,” he said.
“Somebody has got to pay for health insurance, but whether this is the right way to do it, I can’t tell you,” he said. “I wish we were all in it together and everybody paid their fair share for everything.”