Clarifying Insurance Facts
Just a quick note to clarify a few things about the re-employment insurance bill, passed by the N.C. Legislature this year. This is a very complex issue involving a federal tax, a state tax, and in this instance a state surcharge.
The Pilot’s editorial “This ‘Sequester’ Is Unnecessary” (Feb. 27) said the state needs to do something to begin paying back the $2.5 billion it owes the federal government. The reality is we already have begun paying back the debt: All North Carolina businesses saw their unemployment insurance increase January 1 this year by $21 per employee.
There will be an additional $21 per employee increase in 2014, then another in 2015, which means Moore County businesses will be paying $63 per employee more in 2015 than they are paying now.
Further, with the passage of the re-employment bill, many organizations that have been exempt from paying federal unemployment insurance will now be required to pay.
The editorial said the priority is “to shift the burden of suffering to everyday people while saving business from having to pay the unemployment tax surcharge.” That statement is not accurate. All businesses are already paying more in unemployment insurance today than they were last year, and that amount will continue to escalate for the next two years.
The escalation is a result of an increase in the federal tax, the state tax, plus a 20 percent surcharge implemented to build up the state’s unemployment trust fund. Once the trust fund balance reaches $1 billion, the surcharge will be removed; however, it will be automatically reinstated if the trust fund ever dips below the $1 billion threshold.
President and CEO
Moore County Chamber of Commerce
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