Obamacare A Major Concern for Small Business this Tax Season
Obamacare was originally sold to business owners as a way to reduce the rising cost of providing health insurance to employees. Six years later, we continue to find out this wasn’t true. Health insurance premiums are rising at a faster rate under Obamacare and harming the ability of businesses to grow and hire more workers.
One provision within Obamacare – the health insurance tax (HIT) – is particularly alarming for small businesses. This new health insurance tax is roughly a 2.5% excise tax on health insurance premiums which gets passed along to businesses and their employees in the form of higher premiums. Small businesses, their employees, and the self-employed are exclusively harmed by the HIT since employers that self-insure, a.k.a. large businesses, are exempt from paying the tax.
This tax season, the cost of the HIT exceeded $11 billion, but of 2024, it will cost $18 billion. The National Federal of Independent Businesses (NFIB) expects the HIT to reduce private sector employment by 146,000 to 262,000 jobs by 2022 as small businesses are forced to lay off employees or reduce hiring as a result of the additional cost.
Other harmful taxes to businesses and their employees contained within Obamacare include the employer mandate, individual mandate, Cadillac tax, medical device tax, and more. Obamacare should be fully repealed in order to slow the rising cost of health insurance and prevent further job loss.