Obamacare's Health Insurance Tax Could Cost Up to 286,000 Jobs
As I’ve written previously, small businesses should brace for big health plan premium increases. Some are already seeing this happen. Rod Winter, a Wisconsin business owner told the Wall Street Journal:
Our 440-employee business just received its initial premium from United Healthcare for our July 1 renewal. The renewal premium represents a 29% increase over the current premium. UHC indicated that our premiums are going up 11% to bring our deductibles and out of pocket maximums in line with the provisions of the ACA. In other words, without the ACA, our premiums would be going up approximately 18%, not 29%.
New research finds that the added costs of one of Obamacare’s taxes will be brutal on employment.
The National Federation of Independent Business’ Research Foundation estimates that the Health Insurance Tax (HIT)
will result in a reduction in private sector employment of 152,000 to 286,000 jobs by 2023, with 57 percent of the job losses coming from small businesses.
This will amount to a reduction of U.S. real output (sales) by between $20 billion to $33 billion during the same time frame.
The chart above breaks out how individual states will be affected.
The HIT, which went into effect on January 1, 2014, levies a tax on health plans sold on the fully-insured market. Eighty-eight percent of it is made up of small businesses. Revenue from the tax will rise by 41% in 2015 and reach $14.3 billion in 2018.
“Small businesses are crucial to rebuilding an economy that allows all Americans to prosper,” Katie Mahoney, Executive Director of Health Policy at the U.S. Chamber said. “We need to work to find ways to ensure small businesses and their employees have the tools to build on their current success, not hinder future growth.”
The HIT tax simply adds to their burdens, as Fox Business’ Gabrielle Karol reports:
“When employers are faced with double-digit rate increases, to add a few additional percentage points to the renewal just makes that health insurance less affordable and makes it less likely for them to recruit additional employees to provide better services,” says Tom Harte, president of the National Association of Health Underwriters.
“Just yesterday, I was sitting with a non-profit organization in New Hampshire whose rate increase was over 18% from the prior year, and embedded within that was the HIT. For that non-profit organization to instead be faced with a 15% increase versus 18% would have certainly helped them to deliver more services and provide for additional compensation for their employees,” adds Harte.
The Stop the HIT Coalition released a new tool that will help small businesses and their employees calculate how much the tax will cost them. It will also help them contact their Member of Congress to strengthen the bipartisan support for repealing this harmful tax.