The American Farm Bureau Federation last week said the Health Insurance Tax would hit small farmers and businesses the hardest, urging repeal of the tax during a House Small Business Subcommittee on Health and Technology hearing.
The tax, which was passed as part of the Patient Protection and Affordable Care Act, will be levied on a health insurance company's net premiums.
Delivering testimony to the Committee, New York Farm Bureau President Dean Norton said escalating health insurance premiums has required significant changes to the cost structure from covering about 90% of the insurance cost to approximately 50% through a high deductible plan.
Group says small farmers and businesses will pay big prices with healthcare tax
"Unfortunately, the people who are really hurt by this change are the employees. They now have to contribute a larger portion of the expense when they seek medical attention," Norton said.
Norton explained that many farmers do not self-insure because they have too few employees. Further, he said, because the smallest employers almost never self-insure, they will end up bearing the brunt of the tax.
AFBF noted that according to the Kaiser Family Foundation's 2012 Survey of Employer Health Benefits, only 15% of the smallest employers self-insure. Further, health insurance costs for small businesses have increased 103% since 2000, they said.
According to the Joint Committee on Taxation, the tax will further increase family premiums by $400 or 2.5% in the year 2016, exacerbating the issue.
"Being able to offer health insurance is important to us as we strive to offer benefits that attract high quality workers and to keep them healthy and productive once they are on the payroll," continued Norton. But, he said, "Escalating health insurance costs not only impact farm employers, but also those who purchase health insurance coverage for themselves and their families."
The Farm Bureau supports H.R. 763, introduced by Reps. Charles Boustany, R-La., and Jim Matheson, D-Utah, which would repeal the annual fee on health insurance providers, preventing premium increases for individuals and small businesses in the fully insured health insurance marketplace.
A coalition of groups has been formed to eliminate the tax, called "Stop the Hit." The group said earlier this year that H.R. 763 will move towards fixing an unintended consequence of the Patient Protection and Affordable Care Act.
News source: AFBF