An ObamaCare-related tax will slash between 152,000 and 286,000 jobs by 2023, according to new research from the National Federation of Independent Business.
The Health Insurance Tax is a 2% to 3% tax on employer-sponsored health policies purchased on the fully insured market. According to the NFIB, 88% of small businesses purchase their policies on this market, while most large corporations and labor unions do not.
Fifty-seven percent of the job losses will come from small businesses, according to the NFIB’s research. The organization estimates that this will mean a reduction of U.S. real sales between $20 billion and $33 billion by 2023.
“The HIT represents a new tax on small business that raises insurance costs for an already struggling Main Street and is contrary to the goals of health care reform,” said NFIB Director of Federal Public Policy Amanda Austin. “Singling out job creators for tax increases makes no sense for our economy, is short-sighted and wrong for our nation’s growth. NFIB will continue to highlight the very real and negative effects the HIT will have on small businesses and everyday Americans as we work to pass bipartisan legislation to repeal the HIT.”
While a 2% to 3% increase may not seem overly burdensome, experts say it’s a double whammy on top of rising health-care costs.
“When employers are faced with double-digit rate increases, to add a few additional percentage points to the renewal just makes that health insurance less affordable and makes it less likely for them to recruit additional employees to provide better services,” says Tom Harte, president of the National Association of Health Underwriters.
“Just yesterday, I was sitting with a non-profit organization in New Hampshire whose rate increase was over 18% from the prior year, and embedded within that was the HIT. For that non-profit organization to instead be faced with a 15% increase versus 18% would have certainly helped them to deliver more services and provide for additional compensation for their employees,” adds Harte.
And while Harte says increases in the high-teens are normal, some companies are seeing even higher hikes. One client with just over 50 employees, says Harte, saw a 48% increase in their health-care costs.
“Although health-care reform has benefited a couple million who didn’t previously have access to health insurance, it has harmed millions of people with regard to substantial rate increases through their employer-based health insurance,” says Harte.