Bipartisan Momentum is Building to Fix the Health Insurance Tax (HIT)

By at 12 March, 2019, 10:12 am

Small Business Insider

On the good news front from the nation’s capitol, bipartisan momentum is building to address a major pain point for small businesses and the self-employed – crushing health coverage costs.  Bipartisan bills have been introduced in the U.S. Senate and U.S. House that would provide relief for small businesses from the unfair and costly health insurance tax (HIT), a $50 million per-day tax that directly targets the plans of small businesses and individual entrepreneurs.

The legislation, S. 172 and H.R. 1398, the Health Insurance Tax Relief Act of 2019, would extend the current moratorium on the HIT into 2020 and 2021. Small businesses could save on average $196 per individual and $479 per family, which is significant savings, especially for those with multiple employees.  S. 172 is being led by Senators Cory Gardner (R-CO), Jeanne Shaheen (D-NH), John Barrasso (R-WY), Doug Jones (D-AL), Tim Scott (R-SC), and Kyrsten Sinema (D-AZ) (see the full co-sponsor list here), and in the House by U.S. Reps. Ami Bera (D-CA), Jacki Walorski (R-IN), Josh Gottheimer (D-NJ) and Kenny Marchant (R-TX) (see full co-sponsor list here).

A group of freshman Senators recently sent a letter on February 28 to Senate leaders in both parties urging “quick action” on the HIT. The letter was signed by Senators Krysten Sinema (D-AZ), Kevin Cramer (R-ND), Marsha Blackburn (R-TN), Mike Braun (R-IN), Martha McSally (R-AZ), Mitt Romney (R-UT), and Jacky Rosen (D-NV).

In a media release about the positive activity, SBE Council president & CEO Karen Kerrigan said:

“Action on these bills needs to occur right away in order to provide small businesses with meaningful cost relief in 2020 and 2021. This relief will allow small businesses to adequately budget and plan, and avoid a ‘cost shock’ in the coming months regarding premium costs for next year. In addition, lower costs would allow more small businesses to afford and offer health coverage, which means they can more effectively compete for employees in this very tight labor market.”

Kerrigan urged President Trump and congressional leaders to work together on this issue:

“Addressing this top cost concern for small businesses and entrepreneurs would fuel confidence and optimism, and provide certainty for these job creators.  We are now into the third month of 2019, and there is little to show in terms of legislative achievements that help Main Street and half of the nation’s workforce. Fixing the HIT is a great place to start.”

On March 1, SBE Council also joined a coalition of over 500 business organizations, nonprofits, chambers of commerce, insurers, brokers, unions and patient advocacy groups in support of H.R. 748, the “Middle Class Health Benefits Tax Repeal Act of 2019,” which would repeal the impending 40% tax on employer-provided health care, otherwise known as the “Cadillac Tax.” Rep. Joe Courtney (D-CT) and Rep. Mike Kelly (R-PA) are the lead sponsors of H.R. 748, and the legislation currently has 210 sponsors.  Read the letter here.

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