MODESTO, Calif. – U.S. Congressman Jeff Denham (R-Turlock) joined local small business owners today at the Modesto Chamber of Commerce to discuss how the health insurance tax, or HIT, is impacting their businesses and employees. The event was hosted by the Stop the HIT Coalition, a broad based group representing the nation’s small business owners, their employees and the self-employed.
“The health insurance tax, or HIT, represents a real threat to California small businesses,” Congressman Denham said. “Small businesses are essential for a strong economy. We must do everything we can to ensure that Washington is not adding new burdens that will only stifle growth and threaten jobs. At the very least, small businesses need time and space to prepare for the HIT.”
The HIT is an often-overlooked tax in the Patient Protection and Affordable Care Act that will significantly raise health insurance costs for millions of small businesses. Under the law, the tax is imposed almost entirely on what’s known as the “fully insured market,” where 88 percent of small business owners purchase their health coverage. The tax will raise the cost of health insurance premiums for families by approximately $5,000 over the next decade, according to an analysis by former CBO Director Douglas Holtz-Eakin.
“The fact is that the health care reform law has increased medical care costs for our employees by 50 percent, and cost over $1 million in added costs over premiums with no change in benefits,” said John Duarte, president of Duarte Nursery in Hughson. “The uncertainty surrounding the health insurance tax makes it virtually impossible to prepare for these new added health care costs.”
California is home to 3.4 million small businesses that collectively employ more than half the state’s workforce. According to an analysis by the National Federation of Independent Business Research Foundation, the HIT will jeopardize as many as 23,000 jobs in California by 2023, and reduce the state’s GDP by almost $4 billion over that same period.
Congressman Denham is a co-sponsor of the Small Business and Family Relief Act, a bipartisan bill in the U.S. House of Representatives that would delay the HIT for two years. He has also cosponsored the Jobs and Premium Protection Act, which would repeal the burdensome tax.