Bill to Impose a new 2.75% Tax on Health Insurance Premiums
The Chamber of Commerce Southern New Jersey (CCSNJ) would like to voice our opposition to S-2676 (Vitale), which requires certain entities that are authorized to issue health benefits plans to pay annual assessments based on the entity’s net written premiums. This bill would require entities that are authorized to issue health benefits plans to pay an annual assessment of 2.75 percent of the entity’s net written premiums and establishes a nonlapsing revolving fund to be known as the “Health Insurance Affordability Fund,” which would act as a repository for all monies collected pursuant to the bill.
The intended purpose of S-2676 (Vitale) is to provide more affordable access to health care in New Jersey, a concept that the CCSNJ undeniably supports. However, this proposal will inevitably lead to higher health insurance premiums for employers that already struggle to afford health insurance coverage for their employees. Should the tax increase proposed in this bill go into effect, higher premiums will trickle down increasing the cost of insurance for employees at a time when families can ill-afford it. Some estimates state that health insurance premiums could rise by at least $600 every year for New Jersey residents covered by a typical family health insurance plan, should S-2676 (Vitale) become law.
CCSNJ members that are coping with the challenges presented from COVID-19 continue to struggle with operating in an extraordinarily high-cost, high tax and heavily regulated state. Our Chamber has consistently stated that tax increases stifle a business’ ability to invest in its employees, equipment, research, products and hinders competitiveness. Ultimately, the result of this effort will mean the cost of doing business in New Jersey will increase as health coverage becomes less affordable for both employers and their employees across our state.
With businesses looking towards how they will recover from the impact of COVID-19, now is not the time to increase costs on both consumers and employers. For these reasons, we respectfully urge you to oppose, S-2676 (Vitale).