Connecticut small businesses are voicing concerns over a proposed tax hike—modeled on a now repealed federal tax—that will drive up healthcare costs for employers and families.

Gov. Ned Lamont's proposed Covered Connecticut Program levies $50 million in annual assessments on health insurance carriers to fund additional premium subsidies on the state-run healthcare exchange.

Costly tax hike: J. Timothy's co-owners Tim Adams and Jim Welch.

The proposed assessments are similar to the Affordable Care Act's costly Health Insurance Tax. Congress repealed the tax in 2019, with the repeal taking effect last month.

HIT drove up healthcare costs for millions of American families and small businesses and was repealed with overwhelming bipartisan support.

“Connecticut wants to get back to work, and job creators in Connecticut are struggling in an already difficult business environment,” said Tim Adams, owner of J. Timothy's Taverne in Plainville.

"The addition of another tax will only make things worse for those trying to recover, especially for small businesses.”


State taxes, fees, and assessments already add $591 annually to the cost of a fully insured healthcare policy, with fears the governor's proposal could add hundreds of dollars more to individual policies.

“The COVID-19 pandemic has already been devastating to working-class families across Connecticut,” said Johnny Garcia, owner of All Seasons Cleaning Service in West Haven.

“The state legislature and Gov. Lamont should not add to their financial strain by increasing the costs of the coverage people desperately need in this public health crisis.”

State taxes, fees, and assessments already add $591 annually to the cost of a fully insured healthcare policy.

The new tax is included in HB 6447, which was approved March 22 by the legislature's Insurance and Real Estate Committee.

CBIA's Wyatt Bosworth told an earlier committee hearing that the business community opposed HB 6447 "due to the financial burden that will be placed on the large group and individual markets by this assessment."

The tax also features in SB 842, which expands state-run healthcare programs. That bill was approved by the committee earlier this month.

For more information, contact CBIA's Wyatt Bosworth (860.244.1155) | @WyattBosworthCT