PPACA: Business Groups Unite Against Health Insurance Tax

May 23, 2011 at 08:00 PM
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Major U.S. employer groups are uniting to fight a new federal tax on health insurance that is supposed to generate $8 billion in revenue in 2014.

The groups -including the National Federation of Independent Business (NFIB), Nashville, Tenn., and the U.S. Chamber of Commerce, Washington – have formed the Stop the HIT Coalition, Washington, to lobby against implementation of the new health insurance tax, which is set to be created by a provision in the Patient Protection and Affordable Care Act of 2010 (PPACA).

Opponents of PPACA are trying to block implementation of part or all of the act.

If the act takes effect as written and works as drafters expect, the tax is supposed to flatten out at about $14 billion in 2018 and generate about $87 billion in revenue over 10 years.

When members of Congress were debating PPACA, bill supporters justified the tax by noting that PPACA should lead to an increase in health insurers' overall revenue, by including provisions that will require most individuals with incomes over a minimum level to own health coverage or else pay a tax.

The Stop the HIT Coalition is arguing that, in reality, health insurers will pass the cost of the tax onto customers.

The tax could increase the overall cost of coverage for a worker with a typical family plan by about $500 per year over a 10-year period, the coalition says.

The coalition is supporting S. 1049, a health insurance tax repeal bill that was introduced Monday by Sen. Jon Kyl, R-Ariz.

"We need to lower premiums, not cause them to go up," Kyl says in a statement about the bill.

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