Evaluating Health Coverage, Seeing a New ACA Fee
AmeriMark Direct is an old-fashioned mail order catalog company in Cleveland that's been around since the 1960s. Its kitschy magazines- with products like magnetic fashion bracelets, patio dresses, sexual health aides and religious-themed blankets - arrive on doorsteps nationwide.
In the company's call center, Kathy Miller talks over the phone with a customer: "You get a free gift today it's a pair of knee highs and your total includes the merchandise, postage and handling and the replacement fee so it will come to $37.97 and I completed your order so you're all set. Any other questions or concerns at this time?"
But this year, those same employees - with cheery tones - are facing rising health care costs. And AmeriMark's Human Resources Director Greg Lyons says the Affordable Care Act is at least partly to blame.
"It probably affects our premiums in the neighborhood of 8 percent," Lyons sayd.
To help control costs AmeriMark's president, Louis Giesler, says there will be a full-court press on promoting health and wellness.
"So we're going to be doing a biometric screening program for our associates to give them some feedback and make them aware of some health related challenges that they may not know about. And if those challenges exist we'll try to put tools in their hands or on their computer screens or in their mailboxes to help them better understand their situations and manage it," Giesler says.
AmeriMark will also be asking its employees to share in paying some of the costs of the Affordable Care Act
Here's the way it works: As part of Obamacare, the federal government charges insurance companies a fee. The size of the fee depends on how many people are being insured. To cover that extra fee, insurance companies pass the cost on to employers. And employers, in turn, pass some or all of the cost on to employees.
It's a kind of trickle down fee, says Clare Krusing a spokesperson for a national insurance industry trade group.
"The health insurance tax is essentially a sales tax on health coverage," Krusing says. "So like any sales tax on anything you buy, it does raise the cost of that particular service. So we are seeing that consumers are paying more in the form of higher premiums as the result of this tax."
Larry Levitt, senior vice president at the Kaiser Family Foundation, explains why the fee - or what some call a tax - is needed: The Affordable Care Act included many new expenses for the federal government, including the expansion of Medicaid and providing subsidies for low and middle income people to help them pay for health insurance and Congress needed to find some way to cover these costs.
This year, federal officials plan to collect $8 billion from the fee. That goes up to more than $14 billion in 2018. And the fee has no expiration date.
"The point of this law is to get more people insured and that will mean more revenues and higher profits for insurance companies so that certainly offsets some of the effect of this new tax," Levitt says.
Meanwhile, Amerimark's Giesler is also looking to the future. With the passage of the ACA, the company debated dropping health insurance for its employees and moving them to the public exchange.
"We did a lot of analysis and had a fairly short debate," Giesler says. "It was a financial break even whether we continue providing health insurance to our associates or move them to the exchange.
Giesler says the move would have caused uncertainty in the workforce and he wasn't necessarily happy with the insurance options his workers could choose from on the exchanges.
So, the company decided to keep providing insurance. But that decision may change in the future if costs continue to climb.