Health Insurance Tax

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Our Position

Farmers and ranchers have two major concerns related to health insurance: cost and access. The new Health Insurance Tax increases health insurance costs for farmers, ranchers and other small businesses by imposing a levy on the net premiums of health insurance companies. This additional cost is passed on to consumers who obtain their health insurance through the fully insured market.

Farm Bureau believes that one of the primary goals of health insurance reform should be to reduce costs, and we oppose the HIT tax.  

Background

The HIT Tax was passed as part of the Patient Protection and Affordable Care Act (ACA). It has nothing to do with reforming the health care insurance system but was included in the ACA as a way to raise revenue to offset the cost of the legislation. The HIT Tax, which is an excise tax levied on a health insurance company’s net premium, raised $8 billion in 2014, the first year the tax was collected, and $11 billion last year.

Most farmers and ranchers and other small businesses are not self-insured because they do not have a large enough pool of employees. Instead, small employers purchase health insurance in the fully insured market. Because fully insured health plans are the only plans that factor into the equation that determines how much HIT Tax an insurance company pays, the cost of the HIT Tax is being passed through to small businesses that purchase those plans.

This new tax is pushing insurance costs even higher than they already are, making it harder for farmers and ranchers to purchase coverage for themselves, their families and their employees. A Congressional Budget Office (CBO) report confirms that the HIT Tax “would be largely passed through to consumers in the form of higher premiums for private coverage.” A study by former CBO Director Douglas Holtz-Eakin indicates that the anticipated impact is as much as three percent-nearly $500 a year per family.

For additional information, visit the Stop the HIT Coalition website at http://www.stopthehit.com/.

HIT Repeal

March 23, 2010

Congress approves the Patient Protection and Affordable Care Act (ACA)

The Health Insurance Tax was passed as part of the ACA as a way to raise revenue to offset the cost of the legislation. The HIT increases health insurance costs for farmers, ranchers and other small businesses by imposing a levy on the net premiums of health insurance companies. The companies then pass the cost onto consumers who obtain their health insurance through the fully insured market.

2014

HIT raises $8 billion

2015 and 2016

HIT raises $11 billion per year

2017

One-year moratorium on HIT takes effect

In 2015 Congress approved a one-year moratorium, for 2017, on the HIT. Since the cost of the HIT increases year-over year, Americans will see only temporary relief in 2017. The tax returns in 2018, driving health insurance costs up even further.

Jan. 4, 2017

Introduction of HIT repeal legislation (H.R. 246)

Reps. Kristi Noem (R-S.D.) and Krysten Sinema (D-Ariz.) offer a Farm Bureau-supported bill (H.R. 246) to repeal the HIT.

Feb. 1, 2017

Farm Bureau issues call to action

Farm Bureau urges farmers and ranchers to ask Congress to repeal the HIT and keep health insurance affordable for small business owners.

Urge Congress to act on HIT repeal bill

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