Blog

HIT: A Cause for Concern

In Alaska, the importance of small business cannot be understated. From Juneau to Fairbanks, our more than 68,000 small businesses are a driving force to the economy. Together, these small businesses employ approximately 40 percent of the state’s workforce. Unfortunately, a new tax scheduled to go into effect as soon as January 1, 2014, could severely hamper local small businesses and the Alaskans they employ.

The health insurance tax, or HIT, will disproportionately increase health insurance costs for small businesses. As the owner of ProComm Alaska, a two-way radio communications company, I have proudly provided our 20 employees with full health insurance coverage for the past 15 years. But because of the HIT, for the first time in our company’s history, we must decrease the employee health care benefits we have always provided.

Americans should be concerned. Small businesses are already operating on shoestring budgets. While the HIT is assessed as a fee on insurance companies that sell policies on the fully-insured market, the Congressional Budget Office expects the cost of this tax to be passed through to consumers by increasing premiums. This means the average family could see their health insurance costs increase by $500 per year in the first decade of the law.

While the HIT was included in the president’s health care reform law known as the Affordable Care Act, what concerns me is that the HIT actually raises health care costs for small businesses�seemingly going against the very principle of “affordability.” Now is the time to shield small businesses from this harmful tax. The Stop the HIT Coalition is leading this effort, so take the time now to share how the HIT will impact you so Members of Congress understand exactly how problematic it is.

Linda Peters owns ProComm Alaska, a two-way radio communications company based in Anchorage, Alaska.