The federal government is about to raise your taxes and increase your cost of health insurance. Beginning in 2018, farmers and small businesses will have to start paying the Health Insurance Tax. The tax was created by the Affordable Care Act to help pay for the legislation. Congress voted last year to impose a one-year delay of the tax until 2018. AFBF tax specialist Pat Wolff says the tax would increase the cost of insurance for farmers and ranchers, “Farmers have two issues with health insurance: one is how much it costs, and the other is, is it available in rural areas? The HIT tax comes straight to how much does insurance cost. It raises the cost of health insurance and it makes it harder for people who have to buy their own insurance to pay for insurance or to upgrade and get higher quality coverage.”
Wolff says the tax is imposed on insurance companies based on the premiums they collect, but the companies pass the cost along to their customers, “The insurance companies just pass this along to people who have to buy their own health insurance to the tune of about $500 per family per year, and that’s a lot of money for farmers and ranchers.”
Wolff says small business owners, along with farmers and ranchers, need tax certainty and security of additional relief from the tax, “You shouldn’t collect in 2017, you shouldn’t collect it in 2018, or 2019, or ever. There’s a wide range of small business groups who are pushing for repeal of the HIT, and they’ve called on Congress to act when they get back after the election to make sure that there isn’t just a one year moratorium, that the repeal of the HIT goes on for more than one year.”