Rising health care costs remain challenging and frustrating for manufacturers. There are many causes for these increasing costs, but a major driver is the range of taxes in Obamacare (i.e., the Affordable Care Act, or ACA): for instance, the medical device tax, the so-called “Cadillac” tax, and the health insurance tax (or “HIT”).
The HIT is a needless tax that adds costs for a range of health insurance beneficiaries who work for small businesses, buy individual plans through a broker or have retiree Medicare Advantage plans, as just a few examples of the millions of Americans who are impacted. Accordingly, a new Oliver Wyman study shows the real savings that can be incurred for individuals and families if Congress acts to take away this tax on premiums.
According to the report, congressional action to delay the tax could prevent HIT-imposed premium increases of around $458 for employees’ families receiving health benefits from fully insured larger employers, and it could prevent an additional $479 for family coverage that small business owners and their employees would otherwise shoulder as a result of the HIT.
Congress already provided one-year HIT relief earlier this year for 2019, but to prevent the premium increases noted in the report, the tax needs to be delayed at least into 2020 and 2021.
The good news is the House already passed legislation in July that would do so; now it’s time for the Senate to do its part to delay the tax beyond 2019. The Health Insurance Tax Relief Act of 2018 (S. 3063), introduced by Sen. John Barrasso (R-WY), would do just that. Manufacturers believe this commonsense approach should not be missed when the Senate plans its work for the remainder of the year. It’s another form of tax relief that puts money back in the pockets of families, businesses and individuals.
The manufacturing industry has a history of leading the business community in providing health benefits to employees—98 percent of NAM members provide health insurance to employees. For that tradition to continue, Congress must continue to prevent the job-killing ACA-related taxes from going into effect in future years. That means taking quick and decisive action and not letting these opportunities languish.
Manufacturers appreciate the ongoing commitment to addressing health care costs and urge the Senate to consider advancing bipartisan, high-priority health care reforms that manufacturers support.
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