On behalf of Colorado’s business community, I am writing to encourage you to take a leadership role on the health insurance tax issue. As you are probably aware, the HIT tax directly raises the cost of health insurance. It’s so damaging, Congress suspended it for 2019, which is helping local businesses afford a quality health plan for their employees. Unfortunately, the tax is scheduled to automatically return in 2020.
Congress can protect companies and working families again from this Obamacare tax, but it must happen fast. Without a bill passing by the end of this session, the HIT tax will be “locked in” for 2020.
A new analysis from Oliver Wyman highlights what the HIT tax would mean for Colorado: a total of $205 million in added healthcare premiums in our state. Small employers and their employees would see premiums go up an average of $422 per family covered, and large employers and their workers about $434. Self-employed people and others who purchase their own health insurance will also see a price hike.
Members of the Colorado Business Roundtable concerned about these potential cost increases, which can easily add up to tens of thousands of dollars for a single company’s workforce. It’s important to note that the HIT-specific price increases will fall on top of any other market-driven cost increases that could arrive in 2020.
Local businesses are struggling with unpredictable healthcare costs, and the HIT tax—which is gone one year and back the next—is adding another layer of uncertainty. What’s more, a 2020 HIT tax comeback could be especially painful. Some economists are predicting economic slowdown over the next 18 months, and businesses are taking a more conservative view on costs, expansion, and hiring. We shouldn’t put more downward pressure on the economy starting next year.
The HIT tax isn’t just about employers, either. Working families will be affected by more healthcare cost-sharing in the form of bigger paycheck deductions and higher deductibles and co-pays. Many companies will be forced to offer less generous health plans or cut back on other benefits, bonuses, or wage increases. These aren’t the results Colorado’s middle class wants or needs.
It is a shame the Obamacare HIT tax remains on the books, but the issue will not be resolved in time to help businesses for 2020. That’s why it’s important that Congress pass a HIT moratorium for 2020 before the end of the current session. We need a leader to push a solution forward. I hope you will consider taking up that mantle on behalf of Colorado’s businesses and working families and make a 2020 HIT tax suspension a top priority for your next few weeks in Washington.