1.7 million small businesses will soon have to face their biggest concern in today’s market: skyrocketing health insurance expenses.

Through Obamacare or the Patient Protection and Affordable Care Act (PPACA), the new Health Insurance Tax (HIT) taxes health insurance companies $68 billion in assessments between 2014 and 2019. To bear the burden of the HIT health insurance companies are forced to raise premiums.

What They’re Saying: Experts and Analysts Agree

Experts, advocates and analysts agree: a health insurance tax will drive up business expenses and hurt the bottom-line budgets of small-business owners and the self-employed:

The obvious reality is that the companies would pass these higher tax levies onto their customers (i.e., those purchasing health insurance) in the form of higher premiums. If Congress raised the federal gas tax, the price of gas at the pump would jump. If Congress imposes a special levy on health insurance companies, the price of insurance jumps. It is that simple.
J.D. Foster, Ph.D.
For the small business community, controlling the increasing costs of health insurance premiums has been the top concern for decades. This new tax will be almost entirely passed from insurers to small businesses and their employees, raising health care costs and increasing economic uncertainty for this vital sector of our economy.
Dan Danner
President and CEO of the National Federation of Independent Businesses
The only… place to shift the tax cost is onto customers – i.e., families and small businesses… The health insurance fee will likely quickly and nearly completely be incorporated into higher insurance premiums. The premium tax alone means that American families will pay as much as $135 billion more in insurance premiums over the next 10 years.
Douglas Holtz-Eakin
Former Director of CBO
We expect a very large portion of the insurance industry fee to be passed forward to purchasers of insurance in the form of higher premiums… We estimate that the premiums would be between 2.0 to 2.5 percent greater than they otherwise would be… Eliminating this fee could decrease the average family premium in 2016 by $350 to $400.
Thomas Barthold
Chief of Staff of the Joint Committee on Taxation
Instead, what we have heard repeatedly are the voices of job creators who have said that they will not create jobs because the health care law is financed through destructive job-killing policies including: New taxes on small business health insurance plans.
Letter to Congress
The Senate bill’s health insurance excise tax is terrible public policy. Although the insurance companies would technically make the tax payment, they would undoubtedly pass this cost along to employers purchasing the plans for their workers in the form of higher premiums.
The Heritage Foundation
The legislation would impose several new fees on firms in the health sector. New fees would be imposed on providers of health insurance … those fees would be largely passed through to consumers in the form of higher premiums for private coverage. Self-insured plans would be mostly exempt from the fee on health insurance providers, and since large firms are more likely to self-insure, that fee would result in smaller percentage increases in average premiums for large firms than it would for small firms and for nongroup coverage.
Senator Evan Bayh
CBO Letter on House bill – HR 3962
The health reform legislation, as enacted, imposes collective annual fees …on health insurance plans... We anticipate that these fees and the excise tax would generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums, with an associated increase in overall national health expenditures ranging from $2.1 billion in 2011 to $18.2 billion in 2018 and $17.8 billion in 2019.
CMS Actuary Memo
Estimated Financial effects of the “Patient Protection and Affordable Care Act,” as Amended
Employers already struggling to keep their doors open now must choose between higher health care costs or costly penalties. To suggest this doesn’t undermine job creation is to deny reality.
John Kline (R-MN)
Education and Workforce Committee Chairman
It will hit 50 million Americans every year. The ripple effects will very likely increase premiums by billions of dollars a year for families and small businesses across the country...That tax will be particularly hard on the poor and middle class — the very people that were supposed to benefit from the law.
Representative Marsha Blackburn (TN-7)
VIce chairwoman, Subcommittee on Commerce, Manufacturing and Trade of the House Energy and Commerce Committee

In Your State…
Click on the map to learn about the HIT in your state.