Impact of PPACA Health Insurance Premium on Small Businesses and Employees – By State

The NFIB Research Foundation studied the impact of PPACA on job loss and lost sales. Below you’ll find more information for specific states from that study.
 

 

CALIFORNIA

Impact of PPACA Health-Insurance Premium Tax on California Small Businesses and Employees

The 2010 healthcare-law contains a tax on the health-insurance policies that most small-business owners purchase. Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, http://www.nfib.org/hitcost.  In generating national-level forecasts, the model also produces forecasts for select states, including the state of California.

The simulation results suggest that, at the state level, such price increases will:

  • Reduce private sector employment in California by at least 11,500 jobs by 2021.  Small business employment in California will be reduced by at least 6,800 jobs –or 60 percent of the private sector jobs forecast to be lost in California as a result of the tax increase.
  • Result in at least $7.4 billion in lost California small business sales through 2021. Counting both small and large businesses, at least $14.6 billion in sales are forecast to be lost through 2021.  Fifty-one (51) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

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COLORADO

Impact of PPACA Health-Insurance Premium Tax on Colorado Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase. Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website www.nfib.com/hitcost. NFIB’s model also produces forecasts for select states, including the state of Colorado.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Colorado by at least 2,500 jobs by 2021. Small business employment in Colorado will be reduced by at least 1,300 jobs. This means that fifty-four (54) percent of the Colorado private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in at least $1 billion in lost Colorado small business sales through 2021.  Counting both small and large businesses, at least $2.3 billion in sales are forecast to be lost through 2021.  Forty-five (45) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health- insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

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FLORIDA

Impact of PPACA Health-Insurance Premium Tax on Florida Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase.  Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, www.nfib.com/hitcost.  NFIB’s model also produces forecasts for select states, including the state of Florida.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Florida by at least 4,700 jobs by 2021.  Small business employment in Florida will be reduced by at least 2,800 jobs.  This means that sixty-one (61) percent of the Florida private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in at least $1.7 billion in lost Florida small business sales through 2021.  Counting both small and large businesses, at least $3.5 billion in sales are forecast to be lost through 2021.  Forty-nine (49) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces roughly two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

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ILLINOIS

Impact of PPACA Health-Insurance Premium Tax on Illinois Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase. Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website www.nfib.com/hitcost. NFIB’s model also produces forecasts for select states, including the state of Illinois.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Illinois by at least 2,500 jobs by 2021. Small business employment in Illinois will be reduced by at least 1,500 jobs. This means that sixty-three (63) percent of the Illinois private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in at least $1.4 billion in lost Illinois small business sales through 2021. Counting both small and large businesses, at least $2.9 billion in sales are forecast to be lost through 2021. Fifty (50) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health- insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

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NEW YORK

Impact of PPACA Health-Insurance Premium Tax on New York Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase.  Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, www.nfib.com/hitcost.  NFIB’s model also produces forecasts for select states, including the state of New York.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in New York by at least 2,000 jobs by 2021. Small business employment in New York will be reduced by at least 1,600 jobs. This means that eighty-one (81) percent of the New York private sector jobs forecast to be lost are jobs that would have been at small businesses.
  •  Result in at least $1.9 billion in lost New York small business sales through 2021. Counting both small and large businesses, at least $4.0 billion in sales are forecast to be lost through 2021. Forty-seven (47) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces roughly two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

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OHIO

Impact of PPACA Health-Insurance Premium Tax on Ohio Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase. Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, www.nfib.com/hitcost.  NFIB’s model also produces forecasts for select states, including the state of Ohio.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Ohio by at least 2,500 jobs by 2021.  Small business employment in Ohio will be reduced by at least 1,600 jobs.  This means that sixty-two (62) percent of the Ohio private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in at least $1.1 billion in lost Ohio small business sales through 2021.  Counting both small and large businesses, at least $2.5 billion in sales are forecast to be lost through 2021.  Forty-eight (48) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

Back to list of states

PENNSYLVANIA

Impact of PPACA Health-Insurance Premium Tax on Pennsylvania Small Businesses and Employees
 

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase.  Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, www.nfib.com/hitcost.  NFIB’s model also produces forecasts for select states, including the state of Pennsylvania.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Pennsylvania by at least 2,200 jobs by 2021.  Small business employment in Pennsylvania will be reduced by at least 1,600 jobs.  This means that seventy-two (72) percent of the Pennsylvania private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in at least $1 billion in lost Pennsylvania small business sales through 2021.  Counting both small and large businesses, at least $2.1 billion in sales are forecast to be lost through 2021.  Fifty-two (52) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces roughly two-thirds of America’s net new jobs. However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

Back to list of states

 

TEXAS

Impact of PPACA Health-Insurance Premium Tax on Texas Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase. Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, www.nfib.com/hitcost.  NFIB’s model also produces forecasts for select states, including the state of Texas.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Texas by at least 6,000 jobs by 2021.  Small business employment in Texas will be reduced by at least 3,300 jobs.  This means that fifty-six (56) percent of the Texas private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in at least $3.1 billion in lost Texas small business sales through 2021.  Counting both small and large businesses, at least $7.1 billion in sales are forecast to be lost through 2021.  Forty-four (44) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces two-thirds of America’s net new jobs.  However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector.  Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

Back to list of states

WISCONSIN

Impact of PPACA Health-Insurance Premium Tax on Wisconsin Small Businesses and Employees

The 2010 health-care law contains a tax on the health-insurance policies that most small-business owners purchase. Although the tax is formally structured as a fee on health insurers, new analysis indicates that virtually all of the tax burden will be passed on to the purchasers of insurance: small employers and their employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family through 2020. The ultimate result for the new tax will be a significant toll on jobs and sales revenue in the private sector.

The NFIB Research Foundation’s BSIM model* was employed to forecast the economic impact this tax will have on small businesses on a national scale. The national-level forecasts as well as the underlying assumptions are contained in the full report available on the NFIB Research Foundation website, www.nfib.com/hitcost.  NFIB’s model also produces forecasts for select states, including the state of Wisconsin.

The simulation results suggest that such price increases will:

  • Reduce private sector employment in Wisconsin by at least 2,300 jobs by 2021.  Small business employment in Wisconsin will be reduced by at least 1,500 jobs.  This means that sixty-six (66) percent of the Wisconsin private sector jobs forecast to be lost are jobs that would have been at small businesses.
  • Result in $830 million in lost Wisconsin small business sales through 2021.  Counting both small and large businesses, at least $1.5 billion in sales are forecast to be lost through 2021.  Fifty-four (54) percent of these lost sales are forecast to come at the expense of small businesses, which will take in less revenue and will have a harder time turning a profit.

According to the Small Business Administration, the small-business sector produces roughly two-thirds of America’s net new jobs.  However, the sector is currently experiencing the worst recovery performance from a recession in recent history. Meaningful job creation depends on a healthy small-business sector. Repealing the health-insurance premium tax would substantially contribute to creating a pro-growth environment that will encourage small firms to grow and hire.

 

Back to list of states

NOTE:
*The BSIM is a dynamic, multi-region model based on the Regional Economic Models, Inc. (REMI) structural economic forecasting and policy analysis model which integrates input-output, computable general equilibrium, econometric, and economic geography methodologies. It has the unique ability to forecast the economic impact of public policy and proposed legislation on different categories of U.S. businesses differentiated by size of firm. Forecast variables include levels of private sector employment and real output. By comparing simulation results for scenarios which include proposed or yet-to-be-implemented policy changes with the model’s baseline forecast, the BSIM is able to obtain estimates of how these policy changes might impact employer firms and their workers. For information on the methodology used to derive model inputs, please refer to the full report.

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