Given the lagging economy and the difficulties many small businesses have faced trying to recover, economic uncertainty has been their primary concern. According to a study released this month by the U.S. Chamber of Commerce, this is no longer true. The impending implementation of the Patient Protection and Affordable Care Act (PPACA) has surpassed economy uncertainty as the number one concern of small business. In just two years, anxiety about the requirements of the law has increased 10 points. This concern is adversely affecting economic growth. Now, only one in five small business owners believe they will add employees in the next two years, and 61 percent do not have plans to hire in the next year.
The health insurance tax (HIT) exemplifies how the PPACA will disproportionately affect small businesses. As one of the largest tax increases included in the health care legislation, the HIT is assessed on health insurance companies operating in the fully-insured marketplace, but the tax will ultimately be passed on to small businesses and employees. With 88 percent of small businesses purchasing coverage from this market, they will see a significant increase in their health care costs.
In less than six months, this added cost becomes a reality. Now is the time to take action. Fortunately, members of Congress are increasingly recognizing the need to repeal the HIT. Sens. John Barrasso (R-WY) and Orrin Hatch (R-UT) joined Reps. Charles Boustany (R-LA) and Jim Matheson (D-LA) earlier this month to discuss the impact of the HIT, and just in the past week, Rep. Eric Cantor (R-VA) mentioned the HIT at an event in Richmond and Rep. Fred Upton (R-MI) met with small business owners in his home state to discuss the impact of the tax. But more needs to be done. Let your Member of Congress know how important it is to protect small business by repealing the health insurance tax today.