By Webb Brown, president/CEO of the Montana Chamber of Commerce
Many Montana businesses, including the Montana Chamber of Commerce, have been hit hard in the last couple of years by rapidly-rising health insurance premiums. This puts a strain on our ability to add jobs, increase wages, or invest in growing our businesses. But on top of the hit we’ve already taken with rising insurance premiums, next year, most Montanans could face an additional challenge in the form of a new tax on our health insurance.
The Health Insurance Tax (HIT) is a component of the Affordable Care Act that levies a federal tax on health insurance plans purchased by many small business owners and their employees. The insurance plans of most Montanans would be affected by the HIT, including family businesses, farmers and ranchers, and others who purchases their own coverage or get their insurance from their employer.
Although it was set to take effect this year, Congress suspended the HIT for 2017, providing some financial relief. Unless Congress acts soon to suspend or eliminate the HIT for 2018, however, Montanans will be hit with that tax increase on their health insurance.
The HIT is projected to increase the price we pay for insurance by about 2.6 percent in 2018. To put that in perspective, in Montana, that could add $400 or more in higher premium costs for any family who receives their coverage from a small business.
This is a significant financial impact. For most Montana families, absorbing more than $400 in new taxes puts a pinch in their budgets. For employers, thousands of dollars annually to pay this tax could translate into fewer jobs and lower wages.
The Montana Chamber identified controlling healthcare costs as one of the top objectives in our 10-year strategic plan, Envision 2026. We’re asking Congress again to help control healthcare costs and provide more certainty to Montanans. Delaying or stopping the HIT from taking effect in 2018 should be a top priority.
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