Letter to House GOP Leaders: Action Needed Now to Extend Health Insurance Tax (HIT) Relief

By at 14 November, 2018, 1:03 pm

The Honorable Paul Ryan

Speaker of the House


The Honorable Kevin McCarthy

Majority Leader


The Honorable Steve Scalise

Majority Whip


The Honorable Cathy McMorris Rogers

Chair, Republican Conference


The Honorable Luke Messer

Chairman, Republican Policy Conference Committee


RE: Health Insurance Tax (HIT Tax) Impact on Small Businesses and Entrepreneurs and the Extension of the Moratorium

Dear Speaker Ryan, Majority Leader McCarthy, Majority Whip Scalise, Chair McMorris Rogers and Chairman Messer:

Entrepreneurs and small business owners remain confident about the U.S. economy and the outlook for their firm’s growth. The many policy initiatives pursued and advanced under your leadership and the 115th Congress have made a BIG difference for the health of small business finances, expansion opportunities, and startup activity in the United States. SBE Council is very grateful for your leadership in many key policy areas, and entrepreneurs across America appreciate your hard work.

During the final days of the 115th Congress, there is an opportunity to further fuel small business confidence and growth into 2019 and beyond. Several key policy reforms, if enacted, will provide small businesses and entrepreneurs with the certainty and relief they need, which in turn will help to sustain the strength of our growing economy.

One of those key issues is the cost of health coverage. Costs remain high. Entrepreneurs are very enthusiastic about the reforms and changes initiated and implemented by the Administration and passed by this Congress, but the impact of those changes will take some time to hit the marketplace. As you are well aware, more reforms are needed to unlock innovation and new models of coverage for the delivery of quality care at lower costs for entrepreneurs and their employees. That is why I am writing today

SBE Council’s nationwide membership of more than 100,000 entrepreneurs and small businesses strongly support an additional-year extension of the health insurance tax (HIT tax) moratorium for 2020. In order to have maximum impact for small businesses, this extension needs to occur right away, which means Congress must act before the end of this year.

The unfair HIT tax directly strikes the self-employed, small businesses and their employees. Thankfully, Congress passed a one-year moratorium on the HIT tax for 2019.  But those savings will be short-lived with the return of the HIT tax in 2020. Cost increases will be on the mind of small business owners not far into 2019, which means plans for dealing with rising health insurance premiums will impact owner psyche and investment decisions well before 2020 arrives. This dynamic could undermine the positive economic climate that has been made possible by the policies you have worked so hard to advance.

Even in a great economy, higher costs put small businesses at a competitive disadvantage. Regarding health coverage, this key benefit allows small firms to compete with larger companies as they work to attract and retain the employees they need to scale and operate efficiently.

While the ideal policy solution is to repeal this unfair tax, we strongly support the extension of the moratorium through 2020.

Thank you again for your leadership and long-time support of small businesses over the course of your careers. Do not hesitate to call upon SBE Council to assist you in your efforts in support of a return to strong entrepreneurship and sustaining the optimism and growth of America’s small businesses.


Karen Kerrigan, President & CEO 

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