Some members of Congress in both parties are beginning to get the message that various provisions of Obamacare have consequences either unintended or intended and undesirable. In the world of small (and sometimes not so small) business the new Health Insurance Tax (HIT) of about 2% and the requirement to offer coverage to full-time workers defined as working 30 or more hours a week, are garnering attention.
While in the short-term changes are unlikely because they are needed to pay for the Law or are central to the goal of expanding coverage, the longer term concern is that they simply make health insurance for many individuals (generally those who already have coverage) less affordable.
The Law is so complicated, so subject to bureaucratic discretion and regulation and affects so many aspects of health care that it will take years to understand the full impact let alone success or failure. But as with so many laws of such sweeping scope … that’s the next generation’s problem.
Congress contemplating small tweaks to help small businesses weather health care reform
Republicans and Democrats in Congress have their own political reasons not to open the health care law back up for improvements.By J.D. Harrison, Published: June 26 | Updated: Thursday, June 27
An effort to repeal a tax on insurance companies in the new healthcare reform law is gaining momentum in Congress, fueled by concerns that the fee would hit small businesses particularly hard.
The legislation would eliminate a fee on health insurance companies scheduled to take effect when the law goes into full effect next year. The fee, commonly referred to as the health insurance tax (HIT tax), will be calculated based on the plans insurers sell directly to individuals and companies, known as the fully insured market, and excludes plans set up and managed by firms themselves, called the self-insured market.
Most large companies self-insure their employees; consequently, experts warn that insurance firms will pass the added costs of collecting the fee to small businesses, which tend to purchase coverage in the fully insured market.
“It’s pretty straightforward, what’s going to happen, that the tax is going to be passed along,” Rep. Jim Matheson (D-Utah) said in an interview, noting that insurance agents and underwriters have told him as much. “It isn’t really taxing the insurance companies, it’s taxing the people paying the premiums, and in this case, that’s small business owners.”
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