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HIT an unwanted holiday surprise

Many small businesses rely on a robust holiday shopping season to end the year on a good note financially. But even a good haul in the coming weeks might not be enough for millions of small businesses and their employees who will soon be subject to the discriminatory, job-killing small business health insurance tax.

The $100 billion health insurance tax, or HIT, is set to take effect beginning January 1. With it, small business owners and their employees will see a substantial increase in the cost of health insurance policies purchased on the fully-insured market, the place where 88 percent of small businesses purchase health coverage for their employees. Over the next 10 years, the HIT is projected to reduce private sector employment by more than 250,000 jobs and cost the U.S. economy $35 billion.

While the HIT has been hiding in the shadows during much of the new health care law debate, that is beginning to change. There is evidence that greater awareness about the HIT and the health care law in sum is leading to increased concerns among the small business community. The latest NFIB monthly index showed a significant increase in the number of small businesses concerned about the cost of health insurance, and NFIB chief economist Bill Dunkelberg summed up these concerns:

“Small-business owners who provide health insurance may soon find that their plans ‘unacceptable’ to Obamacare and be obliged to either pay more for the coverage or abandon it and pay the benefit in cash. This will be a major source of angst and uncertainty in 2014.”

Fortunately, there is an effort underway to spare the million of Americans who would be subject to the HIT. Bipartisan legislation introduced by Representatives Ami Bera (D-Calif.) and Charles Boustany (R-La.) would provide immediate relief from the HIT for two years. The Bera-Boustany bill is in addition to a bipartisan bill introduced earlier this year that would completely repeal the HIT. We encourage you to contact your Member of Congress to share your concerns about the HIT and follow our efforts to repeal it on Facebook and Twitter.