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Health care’s hidden tax on Main Street

It was recently announced, and indeed celebrated, that over 8 million Americans signed up for coverage through ObamaCare. 

As the administration completed their victory lap, the Congressional Budget Office (CBO) quickly released a promising projection that health insurance premiums would be lower than expected, seemingly backing the president’s narrative that the health care law is a glowing success for all.  And yet, a recent USA Today/Pew Research Center poll found that a majority of Americans still highly disapprove of the ACA. So, where is the disconnect?

For starters, and notwithstanding President Obama’s failure to disclose the number of sign-ups that came from the millions who lost their policies due to his broken promises or those who were previously uninsured altogether, let’s consider how the plans otherwise are playing out in the real-world. 

Americans are finding that ObamaCare actually provides fewer health care options to choose from, none of which are seemingly affordable for middle-class families.

Early accounts of ObamaCare’s implementation are more like a string of firecrackers that keeps exploding rather than a well-planned federal program. Regardless of CBO projections, out-of-pocket costs have risen and premiums have increased despite what was advertised.  

Furthermore, Americans are finding that ObamaCare actually provides fewer health care options to choose from, none of which are seemingly affordable for middle-class families.

While bracing for the next impact, small businesses have consistently been raising their concerns over what these changes will mean for their business, and the need for more time to understand how to comply with the law. 

The response? Zero delays of the most hurtful provisions to small employers, and a full year’s delay of the one benefit they were promised– the health care exchange for small businesses. 

To add insult to injury, a hidden tax within the law is coming to light that threatens the very livelihood of thousands of U.S. businesses and millions of American workers. Known as the health insurance tax or HIT, this is a new discriminatory tax on small businesses and their employees that will raise the premiums by as much as $500 per policy per year. 

Main Street enterprises are now being faced with the choice of eating the costs, passing it on to their employees, ending coverage altogether or other unexpected decisions impacting their operations and workers.

Adding to the confusion is the fact that the cost of the tax is only going to grow over time – collecting an estimated $145 billion from small businesses in the first ten years alone and making it that much harder for business owners to prepare for the future. 

Ironically, during one of the ACA’s many back door deals, large corporations and unions received a carve-out from the HIT, leaving the full burden of the tax to fall on the fully-insured marketplace, where nearly 90 percent of small businesses, their employees and the self-employed purchase their insurance.

However, such a short-sighted move didn’t account for the fact that small businesses create two-thirds of new jobs annually and generate nearly 50 percent of the country’s annual GDP.

Weaken that important sector and the chances of a full economic recovery are grim at best as businesses are stifled and job loss increases. In fact, the National Federation of Independent Business (NFIB) projects that unless the HIT is eliminated, private-sector employment through 2022 will be reduced by as much as 262,000 jobs, with 59% of those losses falling on small business.

Bipartisan legislation to repeal the tax and legislation to delay it has been introduced, however, the issue continues to fall victim to political posturing. 

This simply cannot continue. It is time Congress hears directly from the very Americans that are shouldering our nation’s health care burdens.

To that end, the Stop the HIT Coalition, representing a wide range of small business organizations including the NFIB, just launched a new initiative to help owners and their employees estimate how much the HIT will cost them, and to then share it, in the form of a mock invoice, directly with their member of Congress in the hopes that being on the receiving end of these bills will remind policymakers of their campaign trail promises to support job creators and workers in their communities, not stiff them with the bill for ObamaCare.

Small business owners aren’t asking for a hand-out or a carve-out; that’s not in the nature of an entrepreneur. What they are asking for is a fair chance at growing their businesses without the added burden of higher taxes and limited health care options, and certainly not to be discriminated against while giving a pass to the special interests in Washington. 

If the president really wants to improve health care for all Americans, it’s time to stop hiding its costs on the books of small businesses.

Dan Danner is president and CEO of the National Federation of Independent Business (NFIB).

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