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Own a small business? Brace for Obamacare pain

Local business owners might be hoping the Affordable Care Act’s insurance mandates cover sticker shock.

The law’s employer coverage mandate doesn’t take effect until 2015, but early plan renewals are starting to roll in. And for some businesses, the premium jumps are positively painful.

Local insurance brokers are reporting spikes ranging from 35 percent to 120 percent on policies that renew from July to December. The increases are especially acute among employers with workforces made up of younger, healthier men. That’s because Obamacare prohibits offering lower rates to healthier groups. It also narrows the allowed premium gap between older and younger enrollees.

“It’s like if there were no more safe-driver discounts with State Farm,” said local insurance broker Frank Nolimal of Assurance Ltd. “Everybody has the same rate, whether you have three DUIs, or you’re a (nondrinking) churchgoing Mormon.”

The changes put as many as 90,000 policies across Nevada at risk of cancellation or nonrenewal this fall, said Las Vegas insurance broker William Wright, president of Chamber Insurance and Benefits. That’s more than three times the 25,000 enrollees affected in October, when Obamacare-compliant plans first hit the market.

Some workers are at higher risk than others of losing company-sponsored coverage. Professional, white-collar companies such as law or engineering firms will bite the bullet and renew at higher prices because they need to compete for scarce skilled labor, Nolimal said.

But moderately skilled or low-skilled people making $8 to $14 an hour working for landscaping businesses, fire-prevention firms or fencing companies could lose work-based coverage because the plans cost so much relative to salaries.

Employees who keep their coverage might see leaner take-home pay, which could hurt the economy.

Nolimal said one business client whose monthly premiums will rise from $160 to $340 in June plans to shift most of the increase onto his employees.

“Just like when you see gasoline prices going up an extra dime a gallon, it takes money out of the economy for things like buying a new stereo or having dinner out on the town,” Nolimal said.

The premium hikes could have political implications, as well. Nolimal estimated that as many as 85 percent of small-group plans will renew in November and December. Because new premiums go out 60 days before coverage takes effect, those price hikes will hit mailboxes in September and October — just before November’s elections.

That may be why Wright said Nevada lawmakers seemed keenly interested in hearing what he and other brokers had to say during a recent visit to Washington.

He said lawmakers were “very receptive” to the idea that Nevada officials should embrace a federally established transition period that would let businesses keep their existing plans for at least one more year to blunt the effect of today’s higher costs.

Nevada Insurance Commissioner Scott Kipper said March 25 that he doesn’t have the discretion to allow noncompliant plans to stay in place, based on advice from Nevada Attorney General Catherine Cortez Masto. That decision mirrored a fall conclusion that it would be illegal to reinstate the first wave of canceled plans.

But Wright said he has an opinion from a national law firm that says the small-group situation is different, because it involves policies not yet canceled. He said he and other brokers will work over the next few weeks to sway the commissioner.

■ Nevada Health Link exchange enrollee James Kurien wrote us after reading about locals getting billed by the system for coverage they didn’t have. We urged readers to consider sending in payments to ensure their plan stayed in place, with the idea that billing snafus would get worked out eventually.

Kurien wasn’t so sure about that: “My experience to date is I can’t get an email or call returned. Thus I’m loath to send them $1,000 I don’t owe them on the basis that at some point they’ll acknowledge and refund the overpayment.”

We forwarded Kurien’s email to local broker Tamar Burch, who has more than 20 clients with billing and effective-date issues. Kurien circled back to us to let us know Burch and the exchange still are working on his case, but he had fresh advice for others in his position.

He decided to call his carrier, Nevada Health CO-OP, to ask a few questions. The customer-service rep he spoke to corrected “a lot of misinformation” Kurien said he had received before. And that allowed him to go see a doctor for the first time since he submitted his application in December.

“My experience would suggest calling the carrier more than once with the same question to try to get a correct and consistent answer, rather than feel like the first (potentially misinformed) answer you get is final and that you’re stuck,” Kurien wrote.

Kurien said he also might join a lawsuit filed April 1 on behalf of plaintiffs who paid for coverage they didn’t get.

“I’m interested in some small way for that signal to reach Xerox and the folks who crafted the (Nevada Health Link) system in the hope it doesn’t become business as usual again,” he wrote.