By Mick Bates
Since its introduction, we have been told that health care reform is the right step to ensure all Americans live healthier lives. By improving health care coverage, quality of life should improve and the increasing cost of health care should decline.
This is certainly a theory most of us would support, myself included. After all, I’ve built my career improving people’s health through fitness and rehabilitation in West Virginia. In a way, this is what the new health care law promised to do for small businesses by making it more affordable for them to offer health care coverage.
Unfortunately, in some ways, the opposite is occurring, and nowhere is this more evident than in a new tax known as the HIT, or health insurance tax, included in the health reform law. The HIT will disproportionately increase health insurance costs for small businesses — potentially making it harder for us to continue providing coverage or maintain the quality benefits that we believe our workers and their families deserve.
Many West Virginians are asking the question, “Why is this happening?” The HIT is assessed on health insurance companies that offer coverage in the fully insured marketplace, but it will be almost entirely passed on to small businesses since the vast majority of small businesses — about 88 percent — purchase coverage from this marketplace. As a result, premiums for small businesses will inevitably rise, at an estimated cost of about $500 per year for each full-time employee with a family plan.
What many folks don’t know is that West Virginia’s small businesses are already feeling the squeeze of the HIT. Until the real financial impact of the HIT is known, local businesses are being forced to re-evaluate plans for the future. Instead of hiring new full-time workers, many employers are only hiring part-time because they cannot afford new health insurance costs.
I’ve always tried to balance what is right with what I can afford to stay in business. But the HIT makes this increasingly difficult.
Every year when responsible small business owners renew their health plan, they re-examine what they pay versus what their employees are asked to pay. Businesses try to shield their workers as much as possible from premium increases, but with the HIT we are now at a breaking point.
Most small business owners consider their employees to be family, and to tell a hard-working employee that you cannot afford to provide them with health coverage is heart wrenching. To be forced into business decisions based on a new tax that makes the provision of health care less affordable is something no business owner should have to face.
There may be some good in the health care reform law and I realize that the health insurance tax was not meant to single out small businesses. But as we understand the reality of how reform is being implemented, problems like the HIT must be addressed. Allowing health care costs to go up for the more than 120,000 small businesses in West Virginia — simply because of a tax that was included to help pay for the health reform law — is not fair and it is not sustainable.
— Mick Bates is the owner of BODYWORKS in
Beckley and Pineville.