One of the 19 taxes enacted with the 2010 Patient Protection and Affordable Care Act is a health insurance tax. The “HIT” is found in §9010 of the PPACA and its modification through §1406 of the Reconciliation Act. Beginning in 2014, health insurance carriers will begin to pay the HIT and, therefore, the tax will be passed on to employers and employees buying health insurance.
The HIT, which is assessed on a health insurance carrier’s net premiums, is expected to raise $102 billion over the first 10 years. During 2014, the first year that the HIT Tax takes effect, $8 billion will be collected. A recent Congressional Budget Office report confirms that the HIT Tax “would be largely passed through to consumers in the form of higher premiums for private coverage.”
The Department of Health and Human Services reports that among private businesses that offer health insurance, three of every four firms with between 100 and 500 employees purchase coverage in the fully insured market. The number jumped to 87 percent for firms with fewer than 100 workers.
This “HIT” tax and other changes in health insurance markets, both from carriers and from government, underscores the importance of the revolutionary change in the way trade associations can offer their small business members health insurance and employee benefits. While the Affordable Care Act and its regulations and taxes are being enacted, small businesses need their trade associations to provide information and leadership to help small business members.
Trade associations may review the presentation found on the gbac Association Practice Group website here > http://www.gbacapg.com/pheib/index.php
We can work with your trade association to make dealing with the Affordable Care Act easier for you to explain to members and easier for your members to handle their health insurance and employee benefits.