New NFIB Study Predicts Job Loss in Texas Under New Health Insurance Tax
Austin (March 28, 2013) –Texas may lose over 14,000 jobs as a result of a little known provision of the new healthcare law called the Health Insurance Tax (HIT). A study released today by the National Federation of Independent Business (NFIB) 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.
“Businesses in Texas are struggling under unprecedented costs from taxes and regulations. We need to do all that we can to increase jobs, not reduce them,” said Will Newton, NFIB Texas director. “This destructive tax simply must go, if we are ever to return to the thriving culture of growth and entrepreneurship that Texans are accustomed to.”
The HIT is a new tax in the Patient Protection and Affordable Care Act (PPACA), which, beginning in 2014, will impose over $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 this month in the Senate by U.S. Senators John Barrasso (R-Wyo.) and Orrin Hatch (R-Utah).
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.
The full report is available here: http://www.nfib.com/hitcost.
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. More information is available online at www.NFIB.com/newsroom