As part of the Stop the HIT Coalition, ABC Feb. 15 applauded the introduction
of the Jobs and Premium Protection Act of 2013 (H.R. 763), a bill that would repeal the health insurance tax (HIT) provisions in the Patient Protection and Affordable Care Act (PPACA).
Under the HIT, which is scheduled to go into effect in 2014, a fee will be assessed on health insurance companies – almost all of which will be passed on to consumers in the fully insured marketplace, where nearly all small businesses and the self-employed purchase their coverage. In 2014, the HIT will result in the collection of $8 billion, and will reach $101.7 billion in the first 10 years.
“The HIT increases the cost of health insurance for small business and therefore, can and should be repealed,” the coalition wrote. “The nation’s millions of small business owners, workers and the self-employed deserve no less.”
The coalition sent a letter to members of the U.S. House of Representatives citing information confirming this tax would be a bad deal for small business.
According to the letter, the Congressional Budget Office (CBO) confirmed that the HIT “would be largely passed through to consumers in the form of higher premiums for private coverage.” In addition, former CBO Director Douglas Holtz-Eakin estimated that the average impact could be as much as a three percent (or $5,000) increase in premiums for a family of four over 10 years. The coalition pointed out that increasing the costs in such a way will make it difficult for small business and the self-employed to offer affordable coverage, or any coverage at all.
The letter also cited an estimate by the Joint Committee on Taxation that eliminating the HIT could decrease the average family’s premium in 2016 by up to $400. The committee noted that the tax would be passed on to the purchaser of insurance in the form of higher premiums, further validating what the CBO and small business owners across the nation have argued since passage of the PPACA.