CLEVELAND - AmeriMark Direct started its mail order catalog business here in the 1960s, and for decades, everyone assumed that health insurance came with the job.
These days, the 700-employee company doesn’t assume anything.
The old-fashioned mail-order catalog company specializes in kitsch, selling products like magnetic fashion bracelets, patio dresses, “sexual health aides” and religious-themed blankets.
The business model depends on folks like associate Kathy Miller closing a sale, without taking a breath, from the company’s call center: "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."
Rising health care costs could put a damper on her cheery, Midwest tone. AmeriMark's HR Director Greg Lyons believes the Affordable Care Act is adding to the company's costs. “It probably affects our premiums in the neighborhood of 8 percent,” he says.
Among the things that go into that 8 percent are a handful of fees and taxes that help pay for the health law. In exchange, consumers gain benefits like certain guaranteed benefits and improved coverage.
AmeriMark, like most businesses, has been coping with rising health insurance premiums for years. This year, the company’s initial estimate from a broker was a 30 percent increase in premium prices if they stayed with the same insurance provider. Lyons said they shopped around, chose a new company and altered benefits, including increasing the deductibles and co-pays. Such changes in plans have become increasingly common nationally as annual increases in health care premiums have become normal.
For many medium-sized companies, like AmeriMark, the new costs of the Affordable Care Act are an added burden on top of the health insurance premiums that have been rising for years. The largest of the new Obamacare costs, is the health insurance provider tax (HIT). It’s a tax that the federal government charges insurance companies and the size of the fee depends on how many people are being covered.
Then, insurers 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 sales tax, according to Clare Krusing, a spokesperson for America’s Health Insurance Plans, an industry trade group. “So like any sales tax on anything you buy it does raise the cost of that particular service,” she says. “So we are seeing that consumers are paying more in the form of higher premiums as the result of this tax.”
And as part of the Affordable Care Act, the fees help cover others.
“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,” according to Larry Levitt Senior V.P. of the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
Hoping to control costs, AmeriMark's president Louis Giesler, says there will be a full-court press on promoting health and wellness. Employees will have their blood pressure, weight and cholesterol checked annually, and they’ll be doing “biometric screenings” for their workers to “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.”
For example, some employees may have not seen a doctor recently for a wellness check. So, some workers may not realize their blood pressure is high. If a biometric screening reveals that, then Giesler the employee will take action, visiting a doctor and getting educated about the condition.
Amerimark’s workers will also be offered programs to help them quit smoking and incentives to lose weight. And, finally, AmeriMark will be asking its employees to share in paying some of these new costs.
Giesler says the company debated dropping health insurance for its employees, which would likely result in an expensive penalty, starting in 2015.
In the end, the company decided to keep providing insurance. But that may change in the future, if costs continue to climb.
This story is part of a reporting partnership with NPR, WCPN/Ideastream and Kaiser Health News.