Last week the House voted the unpopular Obamacare Cadillac Tax to be permanently repealed 419-6. However, much like a bad cold, the Health Insurance Tax (the HIT) is back for 2020. Website Stop The Hit calculates $5,000 as the average tax for a 10 man small business for example.
No one escapes the $16 billion HIT. The return of the Health Insurance Tax (HIT) means higher costs and fewer jobs for hardworking Americans. Absent immediate Congressional action to delay the HIT, small businesses and families will face $500 on average in higher premiums for 2020. To make matters worse, the increased cost burden on small businesses from the HIT could result in the U.S. workforce being reduced by 152,000 to 286,000 jobs over a decade. Te HIT is projected to increase premiums for seniors by $241.
How much for 2020?
For Small business, this translates to an estimated 2.5%-3% added surcharge. For States like NYS where there is already approx. 16% added surcharge to high premiums, this becomes daunting. It is no surprise the unpopular HIT was suspended. In 2017, payers escaped making $13.9 billion in payments due to the moratorium, according to a 2018 analysis by Oliver Wyman, commissioned by UnitedHealth Group. This may have saved consumers billions on their insurance coverage.“The taxes on health insurance are non-deductible for federal tax purposes for health insurers,” the report explained.
In some states, such as Vermont, the price of insurance would have more than quadrupled. The payer trade group published a fact sheet on this. “Allowing a tax to resume in 2020 valued at an annual level of $16 billion, would saddle individual market consumers, small businesses, state Medicaid programs, and Medicare Advantage enrollees with higher health care costs,
Can this be repealed?
Relief from the health insurance tax would result in real savings to the American people. We strongly urge Congress to provide an additional two-year suspension of the health insurance tax by passing H.R. 1398.
- Additional information is available at https://www.irs.gov/affordable-care-act/affordable-care-act-tax-provisions
- Calculates how the HIT affects your State and your business, here.
- Take action now: tell Congress to repeal the HIT! Join small business owners across the country in stopping the HIT. Sign the petition here.
Learn more about how we are successfully helping navigate SMB for 20+ years. If you have any questions or would like additional information, please contact us at 855-667-4621 or firstname.lastname@example.org.