Employers and consumers are set to face higher health costs due to the Affordable Care Act’s tax on health insurance plans, according a recent analysis by Milliman. Contrary to the stated goals of the law to reduce health care costs, the tax alone will cause premiums to increase by as much as 2.4 percent in 2014, reaching as high as 2.9% in later years. According to the study authors, the effective result is a tax on both consumers and employers.

Not only will the health insurance tax cause employers’ and consumers’ health care costs to rise, it will also stifle job creation. The National Federation of Independent Business projects that the increased cost of employer-sponsored health insurance from the will reduce private sector employment by as much as 249,000 jobs by 2021, and reduce real GDP by up to $36 billion. Small businesses are projected to incur nearly 59% of the job losses directly associated with the tax.

Manufacturers support efforts in Congress to repeal provisions of the Affordable Care Act, such as the health insurance tax, to help make health coverage more affordable. In this case, doing so would have the added benefit of preventing job losses in an already difficult economic environment.

Dorothy Coleman is vice president of tax and domestic economic policy, National Association of Manufacturers.

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