Press Release

Stop the HIT Coalition to Congress: Repealing the Health Insurance Tax is a Bipartisan No Brainer

WASHINGTON, D.C. (February 18, 2015) – The Stop The HIT Coalition, a broad-based group representing the nation’s small business owners, their employees and the self-employed, today urged Congress to consider repealing the small business health care tax, or HIT, as part of the recent focus on addressing the tax burdens included in the President’s health care law.

“With lawmakers taking a renewed interest in addressing the health care program’s added tax burden on consumers, why not show the same consideration for our small businesses as well? Almost 200 bipartisan Members of Congress already support repealing the small business health insurance tax, which is being passed on to small business owners and their employees in the form of higher premiums. It is commonsense legislation like this that should be priorities for this year’s Congress,” said Amanda Austin, vice president of public policy at the National Federation of Independent Business.

Near-term action is possible, as legislation to help consumers facing the strain of the HIT is already on the table. Senators John Barrasso (R-WY) and Orrin Hatch (R-UT) have introduced legislation (S. 183) to repeal the HIT in the Senate and Representatives Charles Boustany (R-LA) and Kyrsten Sinema (D-AZ) recently introduced a similar bill (H.R. 928) in the House. The legislation is collectively sponsored by more than 190 Members of Congress, with bipartisan support in the House.

Dirk Van Dongen, president of the National Association of Wholesaler-Distributors, a member of the Stop The HIT Coalition, also recently spoke out about the need for Congress to prioritize relief from the HIT for American businesses and their employees.

The HIT is an often overlooked small business tax in the Patient Protection and Affordable Care Act (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.

According to a study by the National Federation of Independent Business Research Foundation, the HIT would reduce private sector employment by between 152,000 and 286,000 by 2023. Roughly 57 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 2023 by between $20 billion to $33 billion.