GOFFSTOWN — Several New Hampshire business owners say the upcoming Health Insurance Tax will be extremely costly to their companies, and could result in higher prices for their customers.
They are asking Congress to delay the HIT, a federal sales tax on health insurance plans purchased by small business owners and workers who receive their health benefits through an employer.
“This will be close to a $100,000 hit for us,” said Tom Boucher of Great New Hampshire Restaurants.
It is already challenging in the restaurant industry to get health insurers to provide quotes, in part because of the historic turnover rate, according to Boucher.
Last year, his company experienced a 22 percent increase in health insurance costs, and he is now expecting about $1.1 million in premiums. Restaurants already have a small budget margin to work with, he said, explaining a $100,000 increase would have a big impact and likely require the raising of prices.
“That is the reality,” Boucher told a group of business owners gathered for a roundtable discussion Wednesday at the New Hampshire Institute of Politics.
Some business leaders are urging representatives to help lower health insurance premiums by ensuring that the HIT does not go into effect in 2020.
If Congress does not suspend this tax in 2020, some New Hampshire small business owners say they will be hit with higher health insurance premiums as they renew their coverage next year.
“This type of tax is egregious, especially for small businesses,” said Nick Vailas, founder of the Bedford Ambulatory Surgical Center.
There is an uneven playing field for employers, and the situation will get worse as time goes on and the pool of fully insured products shrinks in New Hampshire and makes it more difficult for smaller businesses to be insured, said Vailas.
According to a letter from U.S. Sen. Jeanne Shaheen and three other senators to the U.S. Senate leadership team, the average family employed by a small business will face a nearly $480 premium increase in 2020.
And, over 10 years, the additional premium cost for those families will add up to almost $5,825, states the letter. “It is important for Congress to extend the health insurance tax moratorium once again.
Unless Congress acts, insurance carriers will include re-imposition of the tax for 2020 as they begin the process of setting rates early next year,” wrote Shaheen. “Absent further congressional action, the tax will result in higher health insurance premiums throughout insurance markets.”
U.S. Rep. Annie Kuster has outlined a set of proposals to contain costs and stabilize the health insurance marketplace that she will pursue in the new Congress,” spokesman Nick Brown said.
“Congresswoman Kuster supports a continued moratorium on the Health Insurance Tax to protect small businesses and consumers in New Hampshire from increased health insurance premiums,” he said.
U.S. Sen. Maggie Hassan also plans to address the issue.
“Senator Hassan shares concerns about the health insurance tax and will continue working with members of both parties to address the high cost of health care for Granite Staters and all Americans,” spokesperson Ricki Eshman said. Kevin Smith, the town manager in Londonderry, said his municipality was recently quoted a 17 percent increase in its health insurance costs, which may eventually need to be offset by taxes, layoffs or a decrease in services.
“One way or another you have to absorb that cost, so it does have a trickling effect.” said Smith.
Vailas agreed, saying it would be crippling to throw another tax on businesses, especially nonprofits. New Hampshire already has some of the highest premiums in the country, and this would make it worse, according to Vailas.
At an extra cost of about $500 per employee, Al Letizio said some employees may not get a raise they expected next year.
“Often, these well-intended programs have a negative impact,” said Letizio, of A.J. Letizio Sales and Marketing.