Yesterday in Washington, D.C., New York Farm Bureau President Dean Norton urged members of the House Small Business Subcommittee on Health and Technology to support the repeal of Affordable Care Act's Health Insurance Tax (HIT Tax. He said the Affordable Care Act's annual fee placed on health care company premiums in the fully-insured market will likely be passed on to consumers when implemented next year.
That would make it more costly for his family's Oak Orchard dairy farm and trucking company at Elba, N.Y. "The HIT tax will hurt the very people this was intended to help. It means that it will be harder for farmers to afford health care for our families and our employees," said Norton.
A $102-billion hit
The HIT tax, which will be levied on a health insurance company's net premiums, is expected to raise $102 billion over the first 10 years. During 2014, the first year that the HIT Tax takes effect, $8 billion will be collected.
A recent Congressional Budget Office report confirmed that the HIT Tax would be largely passed
through to consumers in the form of higher premiums for private coverage. It's already happening, reported Norton. "Small employers like my family purchase health insurance on the fully insured market. Because the smallest employers almost never self-insure, we will end up bearing the brunt of the HIT tax."
According to the Joint Committee on Taxation, the HIT tax will further increase family premiums by $400 or 2.5% in the year 2016. "That's a hit on farmers, other small businesses, and hardworking Americans cannot afford, he added.
Norton testified that because of already rising health insurance costs, it was necessary for his farm to significantly change the cost structure from covering about 90% of the insurance cost to approximately 50% through a high-deductible plan.
"Unfortunately, the people who are really hurt by this change are the employees. They now have to contribute a larger portion of the expense when they seek medical attention. That can be a disincentive for workers to seek care in some instances," added Norton.
Being able to offer health insurance is important as farmers strive to offer benefits that attract high quality workers, pointed out the dairyman. Dairying is already a volatile enough business. Higher health insurance premiums would easily cost his farm thousands of more dollars.
That's why he made the trip to Washington and sought repeal of the HIT tax. "It's very important we are able to offer reasonable health insurance if we're to obtain the workers we need to stay in business.
For another "take" on the impact of the Affordable Care Act's impact on farmers, be sure to read the "Profit Planner" column in the upcoming June American Agriculturist issue.