NFIB Research Foundation Study:
Health Insurance Tax to Cost 125,000 to 249,000 Private-Sector Jobs
November 9, 2011 — NFIB's Research Foundation studied 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% of those losses falling on small business.
Highlights from the Study:
- Nationally: 125,000 to 249,000 jobs lost and $18 to $30 billion in lost sales
- 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 smallbusiness
- 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
Download the Study Read Press Release
The 2010 Patient Protection and Affordable Care Act contains a tax on the health insurance policies that most small businesses purchase. Formally structured as a fee on health insurers, virtually all of the Health Insurance Tax (HIT) is expected to be passed on to consumers. Targeted at the fully-insured market, the HIT will raise the cost of insurance for small businesses and their employees.
This NFIB study aims to forecast the economic consequences this tax would have on US small businesses by firm-size category. The primary input in this study is the increase in employer costs resulting from the HIT which, according to independent estimates, will raise employer-sponsored health insurance costs by 2% - 3%. The study suggest that HIT could reduce private sector employment by 125,000 - 249,000 jobs in 2021, with 59% of those job losses falling on small business.