In a letter sent to U.S. Majority Leader Sen. Mitch McConnell, the Kentucky Chamber of Commerce expressed concerns about the Health Insurance Tax (HIT) provision in the Affordable Care Act and the impact it will have on small business in the state and requested permanent repeal of the provision.
The Health Insurance Tax acts like a sales tax on health-insurance policies purchased in the market by individuals and employers. While the tax, when implemented, is supposed to be paid by the insurance companies, the real cost will be passed through to the customers who pay for the insurance.
Congress delayed implementation of the HIT for 2017, but without immediate action, this tax is set to kick back in on Jan. 1, 2018, costing Americans, employers, states and the federal government $22 billion in 2018 and $267 billion from 2018 to 2027.
“Our member businesses want to be good partners in providing access to health care and creating new jobs, but, especially for small businesses, these higher health care costs will mean fewer resources to hire new workers and expand the economy,” Kentucky Chamber President and CEO Dave Adkisson said.
In the letter, Adkisson pointed to new data from actuarial consulting firm Oliver Wyman, which estimates that over the next decade the HIT will increase the cost of premiums by $2,282 for individual and $6,190 for family coverage for small businesses and by $2,326 for individual and $6,675 for family coverage for large employers.
Because of the negative impacts to come from this provision, Adkisson expressed the Kentucky Chamber’s desire to see Congress further delay implementation of the Health Insurance Tax.
For more state government news go to the Kentucky Chamber of Commerce’s The Bottom Line blog.