STEVE INSKEEP, HOST:
When businesses are feeling the Affordable Care Act, size matters. The new health care law says companies with over 50 employees must offer insurance by next year. Most companies already do, including AmeriMark Direct, which employs about 700 people.
But that comes at a price, says Sarah Jane Tribble of WCPN in Cleveland reports.
SARAH JANE TRIBBLE, BYLINE: 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. The business model depends on employees like Kathy Miller chatting up customers.
(SOUNDBITE OF CHATTER)
KATHY MILLER: You get a free gift today it's a pair of knee highs and your total includes the merchandise, postage and handling, so it will come to $37.97. You're all set.
TRIBBLE: Rising health care costs could put a damper on that cheery tone. AmeriMark's HR director Greg Lyons says the Affordable Care Act will add to the company's costs.
GREG LYONS: It probably affects our premiums in the neighborhood of eight percent.
TRIBBLE: Among the things that go into that eight percent are a handful of fees and taxes that help pay for the implementation of federal reform. In exchange, consumers gain benefits like guaranteed and improved coverage.
The largest of these fees for many medium-sized companies, like AmeriMark, is the health insurance provider tax - or hit. This is a tax that the federal government charges insurance companies. 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, as Clare Krusing explains. She's a spokesperson for America's Health Insurance Plans, an insurance industry trade group.
CLARE KRUSING: The health insurance tax is essentially a sales tax on health coverage. 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.
TRIBBLE: And the Affordable Care Act includes a lot of new expenses for the federal government, says Larry Levitt, of the Kaiser Family Foundation.
LARRY LEVITT: The expansion of Medicaid and providing subsidies to low and middle income people to help them pay for health insurance and Congress needed to find some way to cover these costs.
TRIBBLE: This year, federal officials plan to collect $8 billion from the fee. The Congressional Budget Office estimates that will rise to more than $14 billion in 2018. And the amount is predicted to increase as more people are insured.
LOUIS GIESLER: 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.
TRIBBLE: To help 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.
GIESLER: So we're going to be doing a biometric screening program for our associates to give them some feedback and make them aware of 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.
TRIBBLE: AmeriMark's workers will also be offered incentives to help them quit smoking and to lose weight. And, finally, AmeriMark will be asking its employees to share in paying some of the costs of the Affordable Care Act.
Giesler says the company debated dropping health insurance for its employees and moving them to the federal exchange, and take the penalty that would then come with that.
It was a short debate this year. The company decided to keep providing insurance. But that decision may change if costs continue to climb.
For NPR News, I'm Sarah Jane Tribble in Cleveland.
INSKEEP: This story is part of a reporting partnership between NPR, WCPN and Kaiser Health News.
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