Press Release

Small Businesses Still Taking HITs Five Years Later

WASHINGTON, D.C. (March 19, 2015) – The Stop The HIT Coalition, a broad-based group representing the nation’s small business owners, their employees and the self-employed, today commented on the Senate Finance Committee’s upcoming hearing about the state of the Patient Protection and Affordable Care Act (PPACA) five years after implementation.

“Millions of small businesses across the country are still worried about the increased financial demands of health care coverage and five years later, Congress has yet to address the health insurance tax (HIT), which imposes one of the largest burdens on Main Street,” said Amanda Austin, vice president of public policy at the National Federation of Independent Business. “We hope today’s hearing will shine a light on the limited options available to small business owners and the unnecessary hurdles, such as the HIT, they face in accessing affordable health care coverage.”

Legislation to relieve Main Street of the burdensome tax is already on the table. The Jobs and Premium Protection Act 2015, a bill to repeal the HIT has been introduced in the Senate by Senators John Barrasso (R-Wyo.) and Orrin Hatch (R-Utah) who are joined by nearly 30 of their colleagues in calling for repeal of the tax. Companion legislation was introduced in the House by Representatives Charles Boustany (R-La.) and Kyrsten Sinema (D-Ariz.) and has widespread support with nearly 190 bipartisan cosponsors.

The HIT is an often overlooked small business tax in the PPACA, which will impose $159 billion in new taxes on the small business community, their employees and the self-employed over the next decade. 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. This year alone the tax will collect $11 billion from Main Street.

The HIT would reduce private sector employment by between 152,000 and 286,000 by 2023, according to a study by the National Federation of Independent Business Research Foundation. Roughly 57 percent of these job losses will fall on small businesses. The study also showed that the added tax would reduce U.S. real output (sales) in 2023 by between $20 billion to $33 billion.