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Health Insurance Tax to Cost Thousands of Private-Sector Jobs

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November 9, 2011 | 2,174 views | 2 comments

Small Business to Shoulder 59 Percent of Job Losses

WASHINGTON, D.C., November 9, 2011 --The National Federation of Independent Business Research Foundation today released its study highlighting the private-sector job loss that will result from the Health Insurance Tax (HIT). Relying upon independent cost estimates, the Research Foundation’s BSIM (Business Size Impact Module) highlights how the rise in cost of employer-sponsored insurance stemming from the HIT will result in a reduction in private sector employment by 125,000 to 249,000 jobs in 2021, with 59 percent of those losses falling on small business.

“As NFIB has been working to garner Congressional support to repeal the HIT and protect small business, these BSIM numbers spell out the real-world impact that this tax will have on job creators,” said Will Newton, NFIB/Texas Executive Director. “It really is astounding to think that this one provision in the health-care law will target small business and result in 125,000 to 249,000 jobs lost. It’s imperative that Congress work to pass legislation to repeal this tax to not only protect private-sector job creation, but also to protect American families.”

The BSIM is a dynamic, multi-region forecasting model that analyzes the impact of policy “shocks” on the economy and is unique in ability among models to forecast the economic impact of such policy on U.S. businesses differentiated by size of the firm. For this purpose, the BSIM adhered to the Small Business Administration definition of “small business” as firms with fewer than 500 employees. Additionally, while this is a national study, the NFIB Research Department was also able to break out the impact on a state by state basis with nine sample states. The full study can be read here <> , and the highlights viewed below:

BSIM National Job Loss Projection: 125,000 to 249,000 jobs

Colorado: 2,500 jobs lost by 2021 (1,300 in small business); $1 billion in sales lost for Colorado small business

Illinois: 2,500 jobs lost by 2021 (1,500 in small business); $1.4 billion in sales lost for Illinois small business

Ohio: 2,500 jobs lost by 2021 (1,600 in small business); $1.1 billion is sales lost for Ohio small business

Florida: 4,700 jobs lost by 2021 (2,800 in small business); $1.7 billion in sales lost for Florida small business

New York: 2,000 jobs lost by 2021 (1,600 in small business); $1.9 billion in sales lost for New York small business

Pennsylvania: 2,200 jobs lost by 2021 (1,600 small business); $1 billion in sales lost for Pennsylvania small business

California: 11,500 jobs lost by 2021 (6,800 small business); $7.4 billion in sales lost for California small business

Texas: 6,000 jobs lost by 2021 (3,300 small business); $3.1 billion in sales lost for Texas small business

Wisconsin: 2,300 jobs lost by 2021 (1,500 small business); $830 million in sales lost for Wisconsin small business

The Health Insurance Tax is a provision in the Patient Protection and Affordable Care Act that was levied on insurance companies, but will be passed on to those who buy health coverage in the fully-insured marketplace where nearly all small-business owners and the self-employed purchase coverage.

When the tax officially goes into effect in 2014, it will cost small-business owners, their employees and the self-employed $87 billion in the first ten years and $208 billion in the following ten years; the tax impacts 2 million small businesses, 12 million employees and the self-employed who purchase in the individual market and 26 million employees who are covered by their employer, resulting in a cost of nearly $5,000 per family over a decade.

The NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. Read more at
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Your Opinions and Comments

Glenn Quagmire  
Quahog, Rhode Island  
November 9, 2011 12:58pm
Score another one for Obama. Yes we can!

Elaine K.  
November 9, 2011 12:00pm
New post.

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