The Billings Gazette: Daines Huddles with Business Owners on Health Insurance Tax

Montana businesses are turning to U.S. Sen. Steve Daines, R-Mont., to repeal, or at least delay, a federal tax on health insurance.

Daines met with representatives of the Montana Auto Dealers Association and local Billings businesses in Billings on Wednesday. Insurance premiums are going up, Daines said. But on the horizon is a tax on top of those premiums that is going to work against employees.

“The discussion we’re seeing nationally today is primarily focused on premium increases, deductible increases,” Daines said. “We’re here today to talk about a tax increase on top of all this, which will flow through as higher expense for employees and employers.”

The Health Insurance Tax was created to help fund the Affordable Care Act by charging health insurance providers an annual fee based on a total amount needing to be collected. The tax was to raise $8 billion nationally in 2014 and then increase annually until reaching $14.3 billion in 2018.

Thus far, federal lawmakers have managed to suspend the tax one year at a time. This delay has repeatedly been stuck in a year-end omnibus bill that Congress, for lack of normal budgeting, has repeatedly used to fund the government for a single year while also continuing tax breaks.

The tax, on top of premium increases, would make it difficult for businesses that want to provide insurance as a benefit to keep doing so, said Vu Pham, of Weave Management.

“It’s a constant struggle to do the right thing, providing insurance, not making our employees go onto the private market because we know it costs a lot more,” Pham said.

Weave is a trucking and quarry services company with 170 workers. Its premiums are increasing 10 percent this year, Pham said.

Many businesses that will end up paying the tax don’t yet realize it, said Greg Roadifer, president of Associated Employers. That unawareness stems from confusion about multiple employer welfare arrangements, or MEWAs, which involve multiple employers joining together to form an insurance group.

Businesses assume that MEWAs are like individual self-funded insurance plans by single businesses, except with a strength-in-numbers twist that lowers overall claims risk.