Health care is consistently ranked as a top concern by Americans , as confirmed by polling conducted earlier this year by the AP and National Opinion Research Center. That’s why American small business and families have been so outraged by the health insurance tax, which went into effect in 2014. The HIT is a more than a $150 billion burden on small businesses and any family or individual who buys their own health insurance.
Despite being included in the so-called Affordable Care Act, the reality is the HIT has only made health care less affordable. The HIT increases premiums an average of $500 per employee per year. In 2015 alone, the HIT had an estimated cost of $11 billion. Each year, the amount of money collected by this tax is expected to grow, taking more and more money from small businesses across the country.
Fortunately, Congress acknowledged the problems caused by the HIT last year by passing a one-year suspension of the tax, which will be effective for tax year 2017. The one-year relief measure passed with overwhelmingly bipartisan support, and will provide small businesses and families in Georgia, as well as all around the U.S. with temporary relief. That’s good news for the 950,532 small businesses in Georgia that employ over 1.4 million people in our state.
By every measure, the HIT is poorly targeted. While large business and labor unions are exempt from paying the HIT, Main Street small businesses have been shouldered with paying the HIT in the form of higher health insurance premiums. These added costs have real consequences for small businesses, who have no choice but to delay hiring, reduce benefits or limit the growth of their companies in order to pay this tax.
While Congress’ one-year suspension of the HIT is welcome news, the work is not yet done. Congress has a responsibility to provide permanent relief by repealing this harmful tax. Fortunately, legislation to repeal the HIT carries the support of a majority of Georgia’s elected representatives in Congress. Our elected leaders now need to keep that promise by moving this bill to passage.
The stakes of inaction are high. Unless Congress acts to provide additional relief, beyond the one-year suspension in 2017, small businesses and families will see a tax hike in 2018. The long-term effects of keeping this tax in place are simply unacceptable. Data from NFIB show that as a result of this tax there could be a reduction of between 152,000 to 286,000 private sector jobs by 2023. With many Georgians still unemployed, Congress should focus on legislation that will help reduce the unemployment rate, not raise it.
Recently I had the chance to sit down with Georgia’s own Sen. Johnny Isakson and discuss with him the detrimental effects of the HIT on small business. Sen. Isakson, who has been a champion for small business his entire time in Congress, has been helping to spearhead efforts to repeal the tax. I thank him for his efforts and urge others in Congress to follow his lead and urgently push for the permanent repeal of the harmful and erroneous Health Insurance Tax.
State Director, National Federation of Independent Business