Senate Finance Committee Chairman Orrin Hatch (R-Utah) joined local small business owners in Salt Lake City to discuss how the health insurance tax, or HIT, is impacting local businesses and employees.
The event was hosted by the Stop the HIT Coalition, a broad based group representing the nation’s small business owners, their employees and the self-employed.
“Republicans and Democrats agree that the health insurance tax is bad for patients and small businesses, and late last year, Congress acted in a bipartisan manner to suspend the tax for 2017,” Hatch said. “While we made a step in the right direction, more must be done to prevent the costs of this tax being passed on to cash-strapped consumers and employers on main street in Utah and across the country. Hidden taxes, like the HIT, that are being used to prop up a flawed health law, should be eliminated once and for all.”
The HIT is an often-overlooked tax in the Patient Protection and Affordable Care Act (PPACA) that significantly drives up health insurance costs for millions of small businesses. The nonpartisan Congressional Budget Office projects that the tax will amount to at least $130 billion in new costs over the next decade, which will be almost entirely passed on to small businesses and the self-employed who purchase coverage in the fully insured marketplace. Based on initial cost estimates, the tax is expected to raise the cost of health insurance premiums for families by approximately $500 a year, according to an analysis by former CBO Director Douglas Holtz-Eakin.
Small business owner Lawrence Snow from Valley Plumbing and Drain Cleaning told Senator Hatch, “The first $27 dollars of every service call goes to providing healthcare for me and my 11 employees. The HIT Tax is part of that cost and is money of out of my pocket and the pockets of my employees”
Utah is home to more than 259,000 small businesses, which employ more than 520,000 workers. According to research by the National Federation of Independent Business Research Foundation, the HIT will jeopardize between 152,000 to 286,000 private-sector jobs across the U.S. by 2023, and reduce real GDP by as much as $20 billion to $33 billion over the same period.
Chairman Hatch coauthored the Jobs and Premium Protection Act, S. 183, a bill that would repeal the HIT and permanently relieve small businesses of this burdensome tax.
At the end of 2015, Chairman Hatch joined with a bipartisan majority of his colleagues on Capitol Hill to pass legislation that suspends the impact of the HIT tax for one-year. This is a welcome and important first step towards giving Americans much needed permanent relief through a full repeal of the HIT.
The Senate Finance Committee has jurisdiction over tax policy and the federal health care law.