NAHU joined the Stop the Hit Coalition in sending a letter on Wednesday to House and Senate leadership, urging them to include a delay of the Health Insurance Tax as part as the current tax extenders package or other must-pass legislation, and before the tax is factored into premium rate review that will begin in the next several weeks. The HIT has been suspended twice, for calendar years 2017 and 2019, as part of advocacy efforts spearheaded by NAHU and the Stop the HIT coalition, but is due to take effect again in the 2020 plan year. This will add an additional $500 to average premiums for each affected family as the taxes are ultimately be passed onto health insurance consumers. NAHU and our coalition partners are urging Congress to once again issue a moratorium of the tax for the upcoming plan years as they consider a more comprehensive and long-term solution to this and other ACA taxes.
The tax, dubbed a fee, assesses a tax on all health insurance companies of insured plans both inside and outside the exchange based on their "net premiums" written. While it is charged to insurers to help pay for the ACA, it is ultimately passed down in the form of increased premiums for small businesses, middle-income families, Medicare beneficiaries and young workers, with more than half of the tax paid for by those earning between $10,000 and $50,000. Over a 10-year period, this tax is projected to increase premiums for single coverage by an average of $2,150 and family coverage by an average of $5,080. The tax is a significant revenue offset to pay for the costs of the ACA.
This week’s letter to leadership notes that repealing the tax can help to provide immediate market stability and save families roughly $1,000 over the next two years. The letter emphasizes the strong bipartisan support for relief from this tax, with both Presidents Obama and Trump supporting the delays that were signed into law and the various legislative iterations that have earned widespread bipartisan support in Congress in recent years, including half of the House chamber.
Earlier this month, NAHU called on members to take action through Operation Shout for supporting the delay of the HIT through 2021. If you have not yet taken action, please do so and relay the urgency of passing legislation with enough time for insurers and employers to adequately plan and ensure that American families are not impacted by the tax.