Call for HIT repeal grows more urgent
Washington—With the impending implementation of the Patient Protection and Affordable Care Act (PPACA) and the health insurance tax (HIT) that comes with it, farmers, ranchers and many other small business owners are anxious for action on The Jobs and Premium Protection Act (S. 603, H.R. 763), which would repeal the tax.
The HIT, set to begin in 2014, will increase health insurance costs for farmers, ranchers and other small businesses by imposing a levy on the net premiums of health insurance companies. This additional cost will be passed on to those who obtain their health insurance through the fully insured market.
“The cost of health insurance is a major concern for farmers and ranchers,” said Pat Wolff, American Farm Bureau Federation tax specialist. “Health insurance costs already have gone up more than 100 percent since 2000 and the HIT will impose even more devastating costs on America’s farmers, ranchers and small businesses.”
A Congressional Budget Office report released earlier this year confirmed that the HIT “would be largely passed through to consumers in the form of higher premiums for private coverage.” Health insurance costs for small businesses are already rapidly trending higher, and the new tax would raise insurance costs even more, making it harder for farmers and ranchers to purchase coverage for themselves, their families and their employees.
“Most farmers and ranchers do not have large enough pools of employees to be self-insured,” explained Wolff. “Instead, they purchase health insurance directly from an insurance company whose premiums determine how much HIT an insurance company must pay. Because of this, the cost of this tax will be passed through to small businesses that purchase those plans.”
Farmers and ranchers have also noted that the HIT has nothing to do with reforming the health care insurance system but was included in PPACA as a way to raise revenue to offset the cost of the legislation. During 2014, $8 billion dollars is expected to be collected. In 2018, that will rise to $14.3 billion and continue to climb to reach $101.7 billion in the first 10 years.
The Farm Bureau-supported Jobs and Premium Protection Act is sponsored by Sens. John Barrasso (R-Wyo.) and Orrin Hatch (R-Utah) in the Senate and Reps. Charles Boustany (R-La.) and Jim Matheson (D-Utah) in the House.
Acknowledging how difficult repealing the HIT would be, Boustany and has been joined by Rep. Ami Bera (D-Calif.) in offering legislation (H.R. 3367) that would to delay the new tax until 2016 and to provide a process to return any premium increases attributable to the HIT for 2014 and 2015 to consumers. A similar bill is pending in the Senate.