Health care is hotly debated in Washington, and I’d be willing to bet most people think it’s too expensive.
This is certainly true for Colorado employers — and especially entrepreneur-led companies, which employ nearly half the state’s workforce. Companies throughout the state strive daily to afford quality health insurance for their 1.1 million employees. But, the return of the Health Insurance Tax could provide a bit hit to Colorado companies — and their workers’ paychecks and benefits.
The Health Insurance Tax — also known as the HIT tax — was an ill-considered part of the Affordable Care Act. It applies a steep levy to every small business health plan. In 2020, the HIT tax will cost about $500 per insured employee. That means a small business with just 10 workers will owe an extra $5,000 if the HIT tax is in effect.
Members of Congress have repeatedly signaled that they understand the harmful effects of raising health-care costs on small businesses. Several times, our elected leaders have passed legislation suspending the HIT tax, including for 2019. In each case, this has helped prevent sharp premium increases, so small businesses could better afford employee health insurance. Unfortunately, no permanent solution to eliminate the HIT tax has yet been found, and it will automatically reinstate for 2020 unless Congress takes action again.
Fortunately, Colorado’s Sen. Cory Gardner is leading the charge to save Coloradans from this needless tax. And there is no time to waste in passing another HIT tax delay.
Health insurance companies are finalizing their 2020 rates and open enrollment starts soon. Unless a HIT delay bill is enacted, the prices small businesses see when shopping for a health plan will include its impacts and owners may be “locked in” to paying these unnecessarily high rates.
Given the gridlock and distractions in our nation’s capital, the fate of the HIT tax has become a nail-biter. Some small business owners are already bracing for increased health plan costs, and others will follow suit if indeed Congress fails them.
Depending on the business, that may mean delaying hiring activity, halting a planned wage increase, putting off a key business investment, or reducing other parts of the benefits package. It could also mean passing on more health-care costs to employees, by selecting a health plan with higher deductible and co-pays or asking for a greater contribution toward the premium out of every worker’s paycheck. No matter how small businesses tighten the belt, their decisions will have a downstream impact on our economy and working families.
At a time when employment is slowing, manufacturing softening, and fear of recession creeping into some consumers’ minds, Colorado cannot afford uncertainty in the small business sector. Only with the HIT tax definitively suspended can we sustain our expansion and drive continued wage growth across the state.
Health insurance is expensive enough without adding more taxes. The HIT tax has never made sense, and it should not be allowed to harm our small businesses and working families.
Jeff Wasden is president of the Colorado Business Roundtable. Learn more about the Roundtable online at www.cobrt.com and on Twitter at @ColoradoBRT.
Other items that may interest you
We have noticed you are using an ad blocking plugin in your browser.
The revenue we receive from our advertisers helps make this site possible. We request you whitelist our site.