WASHINGTON, D.C., March 19, 2013 – The Stop the HIT Coalition, a broad-based group representing the nation’s small business owners, their employees and the self-employed, today applauded the introduction of legislation from Senators John Barrasso (R-Wyo.) and Orrin Hatch (R-Utah) to repeal the Health Insurance Tax (HIT) included in the Patient Protection and Affordable Care Act (PPACA).
“Senators Barrasso and Hatch took a critical step today in protecting the financial futures of millions of small businesses and their employees,” said National Federation of Independent Business President and CEO Dan Danner. “By protecting small businesses from yet another burdensome tax, this bill will ensure companies can continue to hire and offer a much-needed boost to their local economies.”
The HIT is an often overlooked small business tax in the President’s health care law, the PPACA, which will impose $101.7 billion in new taxes on the small business community, their employees and the self-employed. The HIT does not sunset and is expected to cost each family approximately $5,000 in higher premiums over the decade according to an analysis by former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin.
According to a study released today by the National Federation of Independent Business Research Foundation, the HIT would reduce private sector employment by between 146,000 and 262,000 in 2022. Roughly 59 percent of these job losses will fall on small businesses. The survey also showed that the added tax would reduce U.S. real output (sales) in 2022 by between $19 billion to $35 billion.
“Given the dire state of our economy and unemployment levels still hovering close to 8 percent, the potential for additional job loss as a result of an added tax points to no other option but to repeal the HIT,” continued Danner.
The HIT is especially insidious as it is cloaked as a fee, when it is actually a tax that is placed on insurance providers and will undoubtedly be passed on to small businesses, their employees and the self-employed. The CBO has confirmed this, stating that the HIT “would be largely passed through to consumers [small-and family-owned businesses] in the form of higher premiums for private coverage.” Increasing the cost of health insurance plans for small business owners and the self-employed makes offering affordable coverage-or any coverage at all-to employees more difficult.
“For businesses, tax increases mean there will be less for investing, hiring, and expanding,” said Bruce Josten, Executive Vice President for Government Affairs at the U.S. Chamber of Commerce. “The same applies here – the health insurance tax will increase the cost of coverage for small businesses and individuals, the very population that the health care law was supposed to help.”
“It is exciting to see that serious action is being taken to save small businesses and families from such a disastrous tax increase,” said Geoff Burr, Vice President of Government Affairs at Associated Builders and Contractors. “Repealing the HIT will give businesses the certainty needed to expand their operations and provide the quality benefits their employees deserve.”
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The Stop The HIT Coalition represents the nation’s small business owners, their employees and the self-employed who are actively working to repeal the Health Insurance Tax. Since the Coalition’s formation in 2011, it has grown to include more than 35 national organizations, representing millions of small business owners across the country. For more information, please visit www.StopTheHIT.com.