Small Business Spotlight: Woodinville's the Herbfarm's Healthcare Struggles

With the Supreme Court expected to release its decision on President Obama’s healthcare overhaul late Thursday morning, here is a look at how one small Woodinville business fell through the cracks of the new health laws.

The Herbfarm owners, Ron Zimmerman and Carrie Van Dyck, may run Woodinville's world-class restaurant but that gives them no cache when it comes to buying healthcare for themselves and their staff. In the eyes of large health insurance companies, they are just small business owners with no purchasing power.

When they couple went to renew the restaurants health insurance policy this year, they were told there would be a 30 percent increase in premiums, according to a New York Times article.

Because the Herbfarm have only 10 of their 25 employees that opted to pay the increased rate (even with the owners helping subsidized some of their staff), they were unable to really bargain lower rates with their insurance company, Seattle-based Group Health Cooperative. Van Dyck told the Times they had always had good coverage and in last year’s plan, premiums were $363 a month, but with a high deductible of $7,500.

Under the new plan Group Health offered them this spring, employees could choose from three options: a health savings account with a $1,500 deductible (premiums are $411 a month), a plan with a high deductible ($5,000) but relatively low premiums ($310 a month), and a plan with a relatively low deductible ($1,500) but premiums that reach $450 a month. Van Dyck and Zimmerman chose the latter plan, according to the Times story.

So why didn’t the Affordable Health Care Act help the Herbfarm? Here is what Robb Mandelbaum wrote in his New York Times story:

“Though the Herbfarm Restaurant would seem to be an ideal candidate for the health law’s small-business tax credit, which phases out as the permanent payroll reaches 25 employees and the average wage reaches $50,000, the owners’ accountant told them they could not take advantage of it — the I.R.S. requires filers to calculate the credit in such way that some companies that fall below each threshold are nonetheless still disqualified.”

Despite not benefitting from the act, Van Dyck said she supports the Affordable Health Care Act and hopes the Supreme Court upholds the law. Click here to read the entire New York Times article.

Are you a small business owner? Share your stories of success and struggle with Woodinville Patch, email editor Annie Archer at ann.archer@patch.com