Delay the HIT!
Efforts are underway to delay the Health Insurance Tax (HIT), imposed by the ACA, from affecting health insurance premiums in 2020 and beyond. Bipartisan legislation, S. 3063, by Senators Barrasso (R-WY) and Heitkamp (D-ND) would give lawmakers additional time to create funding, or reduced spending, alternatives to this tax.
The Affordable Care Act created the HIT as a mechanism to fund the mandates of the ACA. HIT would assess a fee on all health insurance companies selling insured plans based on their “Net Premiums.” While called a “fee” on health insurers or carriers, it is essentially a tax that is passed along to those paying insurance premiums. HIT is estimated to increase premium costs for the average American family by $500 per year, and continue to increase those costs annually.
In the original ACA law, HIT was slated to go into effect in 2014 and expected to raise $8 billion the first year of implemntation. It was postponed through 2017, and then again through 2018.
The Senate’s bill joins the House’s Bill, H.R. 5963, sponsored by Representatives Noem (R-SD) and Sinema (D-AZ). The HIT is not popular among any group of politicians (or anyone else, for that matter), so it’s expected both Bills will pass their respective houses and earn Presidential approval.
KBM Management, along with our industry lobbyist, the National Association of Health Underwriters (NAHU) and America’s Health Insurance Plans (AHIP), feel strongly these bills should be passed in an effort to reduce anticipated health insurance premium increases.