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Section A: General News


Eagle Ford: New study predicts job losses in Texas under new health-insurance tax plan




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April 3, 2013 | 2,206 views | Post a comment

AUSTIN -- Texas may lose more than 14,000 jobs as a result of a little-known provision of the new health-care law called the Health Insurance Tax (HIT). A study released by the National Federation of Independent Business Research Foundation showed total employment in Texas will decline by between 7,751 and 14,135 by 2022 because of the increased costs associated with the HIT.

Texas’ overall gross domestic product will also be reduced as a result of the tax. Over the next decade, cumulative lost sales among small businesses will be at least $4.1 billion.

The HIT is a new tax in the Patient Protection and Affordable Care Act, which, beginning in 2014, will impose more than $100 billion in new taxes on the small- business community, their employees, and the self-employed over a decade. The tax targets the fully insured market, where many small businesses purchase their health insurance, and will ultimately be passed on to consumers in the form of higher premiums.

Former Congressional Budget Office Director Douglas Holtz-Eakin estimates the HIT will increase premiums on insurance policies purchased in the fully insured market by $5,000 over the next decade. Eighty-eight percent of small businesses purchase their insurance in the fully insured market.

Bipartisan legislation to repeal the HIT was introduced in February in the House of Representatives by Reps. Charles Boustany, R-La., and Jim Matheson D-Utah, and in the Senate by U.S. Senators John Barrasso, R-Wyo., and Orrin Hatch, R-Utah, in March.

The Business Size Impact Module (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.

The full report is available at http://www.nfib.com/hitcost.
 

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