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One more year of group insurance – with a rate 3 times higher

SMALL_BIZ_HEALTH_CARE_01
JOHN D. SIMMONS - jsimmons@charlotteobserver.com
Rick Seifert, owner of The Pest Control Authority, will keep his group insurance plan for another year while the new law unfolds.

Rick Seifert, owner of the Pest Control Authority, has 23 employees, and traditionally, has always provided 100 percent coverage of their health premiums.

Is it expensive? Yes. But worth it, Seifert reasoned, because in an industry with high turnover, his average employee has been with the company for 12 years.

But when the health care law passed, Seifert reconsidered. Fearing his premiums would skyrocket, Seifert decided to have his employees sign up for their own coverage on the exchange, which he’d then subsidize.

But that solution comes with its own problems, says Brian Flynn, president of Group Benefits Solutions in Davidson.

For one, Flynn said, adding that cash subsidy to employees’ paychecks will mean Seifert pays more in payroll taxes and workers’ compensation. And because that cash will be considered as income and be taxed, it’ll push employees farther away from eligibility for federal subsidies through the federal exchange.

According to the new law, to qualify for premium subsidies, you have to be a U.S. citizen or lawful immigrant, and have a household income that’s between 100 and 400 percent of the federal poverty level.

For individuals, that’s a range of $11,490 to $45,960. For a family of four, that’s between $23,550 and $94,200.

Seifert was determined to test out the new system. Then came the daily onslaught of exchange-related grievances. For example, a clerical error led to one employee’s coverage being canceled, he said.

Fatigued and frustrated, Seifert decided to cut his losses and buy group insurance for one more year. He, too, is going to take advantage of early renewal. Otherwise his premiums would be triple the cost, Seifert said.

“I feel like the white knight getting beat to death helping my people,” Seifert said. Caroline McMillan Portillo

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