Small businesses can’t afford another health tax

Part of the website features information about the marketplace for small businesses.
Part of the website features information about the marketplace for small businesses. Associated Press file

Congress may move on from health care reform, but lawmakers should do one thing first – stop the Health Insurance Tax from raising premiums for 100 million Americans.


Businesses of all sizes are already straining under the skyrocketing cost of employee health insurance, but California’s small, independent enterprises have the least room to accommodate new taxes that will drive those costs even higher. If Congress doesn’t act soon, they’ll face a premium hike of as much as $500 per employee starting Jan. 1.

Few of the 800,000 businesses represented by the California Hispanic Chamber of Commerce can afford to pay more for health coverage without taking from other pressing needs – whether they plan to hire more staff, give bonuses, upgrade their technology systems or make other investments.

This is not a special interest issue. California’s 1.6 million minority-owned companies make up nearly half of the state’s small business community, our most productive job creator. We need to keep these companies thriving so they can continue to bolster the economy and contribute to their communities.

With a $156 billion drag on the private sector from the health tax over 10 years, however, it will be much harder for small businesses to grow.

Even employees who keep their positions may be hit with lower wages because of the tax, or receive less generous insurance with higher out-of-pocket costs, which will drain family budgets. Some workers may lose employer-based health insurance altogether.

Four hundred lawmakers – Republicans and Democrats – came together less than two years ago to put off the tax for 2017. They can do so again. California’s congressional delegation should push for legislation to be crafted right away, so the problem can be solved soon after they return to Washington next month.

If they don’t, the tax will be priced into health insurance for 2018. From there, it will become even more difficult to turn back. That’s not a result California’s small businesses and their employees can afford.

Julian Canete is president/CEO of the California Hispanic Chamber of Commerce. He can be contacted at