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Local shipyard concerned about effects of new health insurance tax

Last Modified: Tuesday, June 11, 2013 6:40 PM

By Doris Maricle / American Press

JENNINGS — Managers at a local shipyard said Tuesday they are concerned about the effect of a new health insurance tax included in the Patient Protection and Affordable Care Act, also known as Obamacare.

“It is going to have a huge financial impact on guys like us who have been providing health care to their employees,” said Christian Vaccari, Leevac president.

The shipyard just a year ago had 100 employees, but it plans to employ 600 people by 2014, he said. It is one of the top five employers in Jeff Davis Parish.

The increase will affect companies’ abilities to give pay raises or hire additional employees, which would have a ripple effect on the local economy, Vaccari said.

“We have to consider the impact on our employees because that is who is going to bear the burden,” Human Resource Manager Charlie Butler said.

Many employers are considering increasing insurance deductibles and out-of-pocket expenses, which would reduce take-home pay for many employees, he said.

Beginning next year, the federal government will charge a new fee on health insurance firms based on the plans they sell to individuals and companies to help fund health care for the uninsured or underinsured.

Butler said Leevac could pay $250,000 to $850,000 in additional health insurance premiums annually based on 500 employees at its Jennings location.

“As we go into next year there is a lot of concern about what to negotiate to and what the cost is going to be,” he said. “We have got to start planning ahead.”

About 70 percent of the employers are looking at increasing deductibles and out-of-pocket expenses, he said.

On Tuesday, Butler and other company officials hosted a small-business tour with members of the local media and Mark Herbert, a representative of U.S. Sen. Mary Landrieu’s office, to discuss the pending changes in health care. A representative of U.S. Rep. Charles Boustany’s office was invited, but did not attend.

The meeting was the first in a series of events planned by the Stop the Hit Coalition, according to representative Mellissa Landry. The group will make stops across south Louisiana this summer highlighting small businesses and entrepreneurs who will be negatively affected by the tax.

An average employee with a family plan could see a $500-a-year increase under the proposal, Landry said. Individuals could see a $200-$300 increase.

The coalition website refers to the measure as “a hidden tax on small business” and says it “assesses a tax on all health insurance companies based on their ‘net premiums.’ ”

“The amount of the HIT that the insurance company is responsible for is roughly equal to the percent of the market subject to the tax that the insurance company covers,” reads the site. “The larger the insurance company’s market-share, the higher their annual HIT.”

Large corporations and unions were exempted from paying the fee.


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