Paying a premium: Relief needed on special Obamacare tax
Recently, Ray McCarty authored an op-ed for the St. Louis Business Journal on a pressing matter for all Missouri business. On Friday, March 20th…the Business Journal printed Ray’s op-ed in its entirety.
Associated Industries of Missouri (AIM) has been the “Voice of Missouri business” for nearly a century. We have seen how government policy impacts business in Missouri. Today, we are witnessing this firsthand through the Affordable Care Act (ACA) and the significant burden it places on businesses through a little-known tax.
When the president signed the Affordable Care Act into law, the businesses of Missouri struggled to comply. All businesses faced higher premiums, many businesses had to reduce expenses, cut hours, let valued employees go and cut jobs, all while trying to recover from a historically devastating recession.
The act’s main objective was to make health care more affordable. But since its implementation, health care costs have skyrocketed. Although a number of factors have caused premiums to rise, one undeniable factor is a new tax on health care providers. In 2015, this new health insurance tax (HIT) will rise by 41 percent for health insurance providers.
This tax increase will be passed from providers to consumers, including business owners purchasing coverage for employees, which means premiums will rise again. Across the country, this tax will affect 2 million small businesses, 12 million employees who purchase in the individual market, and 26 million employees covered by their employer. It is also estimated to cost small business owners and their employees a total of $87 billion in the first 10 years. Not only will this tax be a significant financial burden on employers, it will also cost thousands of jobs across the country.
Bipartisan legislation was introduced in the last Congress (H.R.763) that would delay the health insurance tax for another two years. Recently, Sen. Roy Blunt co-sponsored S. 183 in the U.S. Senate to repeal this tax altogether.
Eliminating this ill-conceived tax is a great way to reduce costs on employers that are trying to provide health care for their employees, although many still may not be able to afford coverage because of the other effects of the Affordable Care Act on premiums. We thank Sen. Blunt for co-sponsoring this bill and ask Sen. Claire McCaskill for her support as well.