It's Time to Stop the H.I.T.

Congress is taking on the important work of improving our nation’s health care system. All indications out of Washington are that the process or replacing or repairing the Affordable Care Act (ACA) will take several months. Regardless of the time it takes to put a new or revised law together, it’s crucial that our elected representatives look at what reforms can be done now to support local businesses, workers, and their families.

One issue that needs quick attention is the health insurance tax, known as the “HIT.” This misguided tax took effect as part of the ACA – and it’s had the unintended consequence of driving up health care costs, particularly for small businesses and middle class families.

Eliminating this burdensome “HIT” tax would benefit the thousands of North Dakota small businesses and their employees. That’s because, for independent business owners who purchase for their families as well as for those who offer health care benefits to employees, the HIT has substantially increased costs. Simply put, this tax makes it harder for people to find affordable coverage or purchase the plan they need at a cost that doesn’t break the bank. 

Recognizing the harm this tax caused, Republicans and Democrats came together more than a year ago and passed a temporary suspension of the HIT. This short HIT moratorium gave small businesses some breathing room and bought Congress time to formulate a long-term solution.

Now we’ve reached the point where the rubber meets the road for Congress to come up with permanent relief from the HIT.

Although the suspension of this tax officially extends until the end of 2017, the effects of its return are being felt right now as many employers are renewing their health insurance policies. As they compare prices and pay the 2018 premiums, they are once again seeing the unaffordable costs of the HIT rolled in.

Making the situation worse, this is happening against a backdrop of extreme uncertainty. Health care costs have become unpredictable, and small businesses are struggling to cope.

Their natural impulse is to tighten the belt. With a large cost on the horizon, like the HIT tax, businesses are likely to cut back on hiring, raises, bonuses, and other expenses. Such decisions have ripple effects that reach all North Dakota communities: Jobs that should be created aren’t. Business investments that should get made don’t. And economic growth that should happen can’t.

For North Dakota’s families, this translates into greater hardship. Job seekers find fewer opportunities. And employees share too much of the cost burden for healthcare, whether in paycheck deductions or more expensive co-pays. When family budget concerns come between hard-working people and the medical care they need, America is headed in the wrong direction.

That much was clear some time ago—and it’s why voters pulled up on the reins and demanded a sharp turn toward middle class prosperity.

Some changes will take time. A complete healthcare fix, comprehensive tax reform, and other visionary initiatives are huge projects requiring extensive negotiation.

Eliminating the HIT tax, however, can be achieved in the short run. What’s more, it would give an immediate boost to local entrepreneurship, job creation, and small business expansion—enough to advance the economy and help families while we await progress on other important fronts.

Fortunately, there is a bipartisan bill in the U.S. House to repeal the HIT. Now we need an equally forceful move in the Senate.

North Dakota’s Senators Heidi Heitkamp and John Hoeven have always been strong advocates for working families and small businesses in our state. We encourage them to take on the bipartisan cause of repealing the HIT tax. North Dakota will be better off if they do.