House approves two-year health insurance tax delay | Michigan Farm News

House approves two-year health insurance tax delay

Category: Politics

by AFBF

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According to the American Farm Bureau Federation, HIT added $8 billion to the cost of health insurance in 2014 and $11 billion in 2015 and 2016.

The U.S. House approved legislation that contains a Farm Bureau-supported two-year delay of the Health Insurance Tax (HIT). The HIT has increased health insurance costs by imposing a levy on the net premiums of health insurance companies, which is passed on to consumers.

The HIT Tax, passed as part of the Patient Protection and Affordable Care Act (ACA) as a way to raise revenue to offset the cost of the legislation, is an excise tax levied on a health insurance company’s net premium, which is passed along to consumers.

According to the American Farm Bureau Federation (AFBF), HIT added $8 billion to the cost of health insurance in 2014 and $11 billion in 2015 and 2016. While Congress imposed a one-year suspension in 2017, HIT is now in effect for 2018.

A recent report estimates that the HIT will force families purchasing coverage in the small group market to pay an additional $500 on average in premium costs this year. Worse, a disproportionate share of the cost is paid by those with incomes between $10,000 and $50,000, according to AFBF.

The vote “to suspend the HIT for two years is a tremendous step forward for millions of small businesses and their employees who face undue costs from the tax,” the Stop the HIT Coalition, of which the AFBF is a member, said in a recent statement after the House voted to pass the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act.

“We now urge the Senate to take up this two-year delay as soon as possible and provide small business owners and their employees with immediate and necessary cost savings of as much as $570 on average in the small group market.”

In addition to delaying the HIT for two years, the measure would expand access to lower-cost health care options and encourage health care savings.

Because they do not typically have a large enough pool of employees, farmers and other small businesses cannot self-insure and must purchase health insurance in the fully insured market.

Unfortunately, because fully insured health plans are the only plans that factor into how much HIT Tax an insurance company pays, the cost of the HIT Tax is passed through to small businesses that purchase those plans.