Reposted From News 8 WTHN (Link)
Conn. (WTNH) — Opponents call it a “hidden tax” on health insurance.
Several bills before the state legislature promise to bring down health insurance costs making it more affordable for more people.
But “The STOP the HIT” Coalition says the surcharge will cost the middle class the most. The tax is part of the public option bill and in Governor Ned Lamont’s proposed budget.
South Windsor small business owner Steve Fradianni says the proposed new tax would hit his paving business hard.
Steve Fradianni, “It’s another expense for business that we really can’t afford. Every year costs go up and it gets further out of reach.”
At a time when many are recovering from the pandemic, opponents say the tax could add an estimated $12,000 a year for businesses like M & S Paving which has 25-employees.
“It will be harder to stay in business,” says Fradianni.
Chris DiPentima the CEO of CT Business and Industry Association says, “We surveyed our members and 97% said health care costs remain a major issue. We need to do what’s necessary to lower them.”
CBIA’s 5,000 members – a majority of which is small businesses are part of the “Stop The HIT Coalition” working to kill the Health Insurance Tax (HIT).
CBIA estimates individuals pay yearly taxes on health insurance plans in Connecticut to the tune of $360-million. The new tax would collect another $50-million from insurers. Opponents estimate an additional $700 a year in health care costs which may be passed on per individual.
Instead of a tax – CBIA is pushing a number of solutions including benchmarking. When an insurance company exceeds a “benchmark” they come up with a plan to lower costs.
“In Massachusetts they’ve been able to hold the increases to five percent or less,” added DiPentima.
The governor’s bill, “The Covered CT Account” would take the money collected through the new tax to subsidize people in the state-run insurance exchange.
President Joe Biden provided $40-billion for those exchange plans in the American Recovery Plan.
Meantime, the HIT tax mirrors a federal health insurance tax repealed by Congress in 2019 because it wasn’t affordable.
“I was always hoping government would figure out a way to give everyone health insurance and not put it on the back of business,” said Fradianni.
The Health Insurance tax was voted out of the state legislature’s insurance committee. It’s unclear whether it will survive the budget process.