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The Political Selectivity of Obamacare’s Tax Health Insurance Premiums

The new year is usually reason for optimism, but that sentiment is going to be curbed by a new Obamacare tax starting January 1.  Starting in 2014, Obamacare imposes a new tax on health insurance premiums by an additional 2 to 3 percent.

But don’t worry!  Some will be spared (sub. req’d):

 IRS regulations published in November excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.” Since about four of five employers with more than 500 workers and most union-negotiated health plans are self-insured, they are spared from the tax. So is insurance on behalf of “government entities,” such as original Medicare (but not privately run Medicare Advantage).

This political selectivity means the most gold-plated public, private and labor plans are exempt and the tax burden falls on the saps who work for small businesses, the self-employed and individuals—i.e., the people who can least afford it.

The White House says the increased expenses will be picked up by insurers.  That would be convenient, but the Congressional budget office explains the tax will be “passed through to consumers in the form of higher premiums.”

The Heritage Foundation also explains the tax, which has been dubbed a “fee” by the Administration, will increase by more than $6 billion from 2014 to 2018.

Self-insurers are exempt from the tax, and most large employers are self insured.  That leaves small businesses and individuals to pick up the tab.

This will, in turn, reduce employment.  According to the National Federation of Independent Businesses, the health insurance tax will reduce private-sector employment by 146,000 to 262,000 jobs in 2022!

Which part of Obamacare is “affordable” again?  Those who are not politically favored certainly aren’t experiencing increased affordability.

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  1. Pingback: Some Things You Need to Know Before Renewing Your Group Health Insurance Premiums | San Francisco Group Health Insurance

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