WASHINGTON, D.C., May 9, 2013 – Members of the Stop the HIT Coalition, a broad-based group representing the nation’s small business owners, their employees and the self-employed, today applaud the House Committee on Small Business Subcommittee on Health and Technology for holding a hearing on the impact of the health insurance tax (HIT) on small businesses.
Three members of the Stop the HIT Coalition testified at the hearing in favor of repealing the HIT, a tax that will increase the cost of health insurance plans for small businesses and the self-employed.
A recent report from the NFIB Research Foundation found that the HIT would reduce private sector employment by as many as 262,000 and reduce the nation’s GDP by as much as $185 billion by 2022. In prepared testimony, NFIB Research Foundation Senior Research Fellow William Dennis highlighted how the HIT would affect the nation’s economy.
“As our nation continues to recover from the deep recession and struggles with a difficult employment situation, it strikes us as counterintuitive that placing new financial burdens on firms credited with generating the wealth of most new jobs in this country constitutes prudent policymaking,” Dennis said. “Our analysis suggests that eliminating this fee on health insurance premiums will help improve the employment situation and help get our nation’s economy back on track.”
With the implementation of the health insurance tax drawing near, Dean Norton, president of the New York Farm Bureau, said repealing the HIT would help keep health insurance affordable for small businesses. The escalating cost of health insurance has caused Norton and his wife to change the structure of the plan they offer their employees. They now can only afford to cover 50 percent of employees’ insurance costs, down from 90 percent.
“Unfortunately, the people who are really hurt by this change are the employees,” Norton wrote in testimony submitted to the committee. “They now have to contribute a larger portion of the expense when they seek medical attention and I think we all know that this can be a disincentive for workers to seek care in some instances.”
Ryan Thorn, a health insurance broker from Utah, testified on behalf of the National Association of Health Underwriters about his concern that the rise in healthcare costs could cause some employers to eliminate employee healthcare coverage all together.
“Since I’ve made my living helping people buy health insurance coverage for nearly 30 years, I can tell you with absolute certainty that when prices go up, people buy less health insurance coverage or simply forgo it altogether,” said Thorn. “If the cost of this new tax makes health insurance coverage a lot more expensive for some employees, and they decide to drop their group coverage, either to go to the exchange and try and get subsidized coverage or just drop coverage altogether, it could make it impossible for business owners to offer coverage to any of their employees.”
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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.