One aspect of ObamaCare — a tax on insurance companies known as the HIT tax — is a proverbial hot potato and is expected to hit small businesses particularly hard. The tax consists of a fee paid by health insurance firms based on the plans they sell to individuals and companies, known as the fully-insured market. (Self-insurers are exempt.)
Small businesses make up the vast majority of participants in the fully-insured market, because, simply put, they are not big enough to set up and manage their own insurance plans.
Putting two and two together means small businesses and individual participants in the fully-insured market can expect to pay higher premiums as the insurance companies pass on the costs of the HIT tax to their customers.
A proposal in Congress to repeal the tax is gaining support. H.R. 763 would eliminate the tax charged health insurance companies based on the plans they sell in the fully-insured market.
Like any other overhead expense, the costs of operating a business must be borne by the revenue generated by the business. If revenue is short, the business must raise prices in order to stay in business.
Unless it’s repealed, the HIT tax is likely to result in higher insurance premiums for small businesses in the fully-insured market, higher prices passed along to consumers in turn, and fewer options for everyone because some businesses will be unable to compensate for the additional overhead and close the doors for good.
Operating a business in today’s legal environment requires savvy entrepreneurship and trustworthy advice. For answers to your legal business questions in Pennsylvania, seek the help of a professional business law attorney. The attorneys at the Scolieri Law Group, P.C. can advise you regarding existing laws and regulations and help you develop a strategy to meet your business goals. Contact us today at (412)765-0546 or email@example.com.