Subcommittee chaired by Collins examines health insurance tax ...

Press release:

House Small Business Subcommittee on Health and Technology Chairman Chris Collins (NY-27) today led a hearing to examine the economic effects of the upcoming health care law?s insurance tax on small businesses.? Beginning in 2014, the health care law imposes a new tax on the health insurance policies that most small businesses purchase. The amount of the tax will be $8 billion in 2014, increasing to $14.3 billion in 2018, and increase based on premium trend thereafter.

Among today?s witnesses was Dean Norton, an Elba resident and President of the New York State Farm Bureau.? Norton testified about the impact of the tax on farmers.

?The heath care law is a massive piece of legislation that is making a major impact on our lives and the economy overall,? said Chairman Collins. ?The numerous mandates, requirements and taxes, such as the health insurance tax (HIT), are driving up the cost for small businesses to provide health insurance for their employees.? This assessment is not a partisan attack. This is a fact, substantiated by independent studies.? Both the Joint Committee on Taxation and the Congressional Budget Office, among others, have said they expect a very large portion of this tax to be passed through to the purchasers of insurance in the form of higher premiums, driving up the cost of insurance for families and small businesses.?

?Although the law exempts self-funded insurance plans, small businesses typically do not qualify to self-insure leaving them to pay higher premiums in a fully-funded group plan,? continued Collins.? ?This law is bad for our economy. Without any relief in sight, it appears that the law will continue to be an anchor holding down small businesses.?

A recent NFIB Research Foundation study estimated that the tax will raise the cost of employer-sponsored insurance by 2 percent to 3 percent, imposing a cost of nearly $5,000 per family by 2020.?The study also projects the price increases caused by the tax will reduce private sector employment by up to 262,000 jobs by 2020, with 59 percent of the losses falling in the small business sector.

A 2011 report by actuarial firm Oliver Wyman provided national estimates of the impact of the tax on health insurance premiums. The report found the insurance tax alone ?will increase premiums in the insured market on average by 1.9 percent to 2.3 percent in 2014? and by 2023 ?will increase premiums by 2.8 percent to 3.7 percent.?

Materials for the hearing are posted on the House Small Business Committee?s website HERE.
Notable Quotes:

Dean Norton, President of New York Farm Bureau in Elba, NY said, ??health insurance costs for small businesses are already rapidly trending higher, increasing 103 percent since 2000. According to the Joint Committee on Taxation, the HIT tax will further increase family premiums by $400 or 2.5 percent in the year 2016, making it even harder for farmers to purchase coverage for themselves, their families and their employees.?

William Dennis, Jr., Senior Research Fellow at NFIB Foundation in Washington, DC said, ?The health insurance premium tax was one of the largest revenue components included in the original law to offset the budgetary costs posed by PPACA. Formally structured as a fee on health insurers, this tax was intended to raise more than $100 billion over a decade beginning in 2014. However, both government and independent analysts believe that the tax will be passed on to consumers in the form of higher health insurance premiums.

?The tax falls almost exclusively on small businesses. Their larger competitors have no equivalent obligation. Small-businesses, therefore, are asked to absorb a significant share of the financial load of the program while placing them in a less competitive position to do so.?

Ryan P. Thorn, of Ryan P. Thorn Insurance Planning in South Jordan, UT said, ?The new national health insurance fee that will be imposed on all individual and fully insured group health insurance policies sold in this country from 2014 and forward will impact about 45% of all insured residents in Utah. These are the people who are covered by individual, private Medicare and group policies that are fully insured. This means that all risk for the policies is borne by the insurance company. These are the only type of policies that are impacted by the new tax, which means that the Americans who work for and own small businesses around the country are disproportionately affected.?

Source: http://thebatavian.com/howard-owens/subcommittee-chaired-collins-examines-health-insurance-tax/37383

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