Since the Affordable Care Act (ACA) was passed into law in 2010, employers who offer employee health benefits have absorbed additional costs to provide quality health-care coverage to their employees.

These costs have taken the form of expanded eligibility for adult dependents, routine and preventive services covered at no member cost share for non-grandfathered plans, and removal of lifetime and annual limits on essential benefits. In addition to increased employer-plan costs associated with expanded benefits, ACA also imposed three significant taxes and fees on employer-sponsored health care to further the goals of the health-care reform law.

Employers offering health coverage are subject to the fees annually, but the rates are variable and are determined by eligible membership, among other factors. For 2015, employers will need to be prepared for remitting payment for the Patient Centered Outcomes Research Institute (PCORI) fee, the Transitional Reinsurance Fee, and fully insured plans will continue to feel the impact of the health-insurance tax.

In 2014, ACA’s health-insurance tax went into effect for fully insured health plans. Self-funded group health plans are not subject to the tax, nor are voluntary employee beneficiary associations. Unlike the PCORI and Transitional Reinsurance fees that impose a fixed amount per covered member, the health-insurance tax is defined as a fixed amount of revenue to be collected annually on the entire health-insurance industry.

In 2014, the tax will raise $8 billion. That amount will increase to $14.3 billion in 2018. The total annual amount will be allocated across all insurance carriers in proportion to their market share as measured by total premiums.

While insurance-carrier profits are expected to increase because of increased health-plan enrollment under ACA, the funds needed to pay these annual fees will be incurred through increased costs passed on to policyholders, whether in the form of higher premiums, or possibly higher out-of-pocket costs or reduced benefits. It is projected that in order to accommodate the tax, the average premiums for employees in fully insured, employer-sponsored plans in 2014 have increased by $77 for single coverage and $266 for family coverage. These amounts are expected to increase by 2018 to almost an additional $200 for single coverage and an additional $500 for family coverage. The tax is not deductible relative to federal income.

The Transitional Reinsurance Fee was established under ACA to help fund the high-risk pool that was expected to enroll in ACA’s marketplace exchanges. The fees have been scheduled to be levied on both fully insured and self-funded plans for the 2014, 2015, and 2016 plan years. The fees for 2015 will be reduced to $44 per covered life, from the $63 per-covered-life fee that was implemented in 2014. Under the proposed regulations, about $8.025 billion will be collected for benefit-year 2015.

The final regulations issued by HHS confirm that the fee will be collected in two parts each year. For the 2014 fee of $63 per covered life, the first installment of $52.50 per covered life will be due in January 2015 and the second installment of $10.50 per covered life will be due later in 2015. The first installment will be used to fund reinsurance payments and administrative expenses, while the second installment will be used to fund the Treasury Department’s administrative costs associated with the Early Retiree Reinsurance Program (ERRP) which was established in 2010 and terminated in 2012 when available reimbursement dollars for employers were exhausted.

Insurance carriers will remit payment on behalf of fully insured plans. To accommodate the fee, carriers have factored in the additional cost to their annual premium increases. Self-funded group health plans are responsible for payment of the transitional reinsurance fee; however a third-party administrator (TPA) may remit payment of the plan’s behalf. To issue payment, self-funded plans and insurers should report to HHS the number of covered lives enrolled in major medical coverage by Nov. 15. HHS will then notify self-funded plans and insurers of the final fee amounts due, which must be remitted within 30 days.

ACA has granted an exception to the mandate for 2015 and 2016 for self-insured, self-administered group health plans that do not utilize a TPA for processing medical claims. While only a small number of employers manage a self-funded, self-administered plan, some of those groups eligible for the exception are likely to include collectively bargained multiemployer plans.

PCORI tax
The Patient Centered Outcomes Research Institute was created under ACA in order to research, evaluate, and compare health outcomes, and the clinical effectiveness, risks, and benefits of two or more medical treatments and/or services. Employers have been subject to the tax for the past two benefit-plan years, beginning with the 2012 benefit-plan year, and will continue paying for seven years through the 2019 benefit plan year. In the first year of the mandate, employers were subject to a tax of $1 per covered individual. That fee increased to $2 for the 2013 plan year and is expected to increase by a rate of medical inflation beyond the 2013 plan year.

In compliance with IRS guidelines, insurance carriers are responsible for remitting payment of the fee for fully insured plans, and the employer is responsible for remitting payment of the fee for self-funded plans. For fully insured plans, the cost of the PCORI fee has been factored in to the carrier’s annual premium-equivalent rates. The fee is treated like an excise tax by the IRS, in that it is to be incorporated into the overall cost of offering employee health coverage. To pay the fee, employers or insurance carriers must remit payment by filing IRS form 720 by July 31 of the calendar year immediately following the last day of the plan year.

It is projected that 52.4 percent of ACA’s total financing will come in the form of taxes and fees (including those levied per the employer-mandate provision), 6.5 percent of which is levied on employers. While the short- and long-term impact from an individual employer perspective will vary, it is important for employers to work with their TPA or insurance carrier now to project the long-term budgetary impact of these provisions on their plans, so that proper cost-control measures can be put into place sooner rather than later to offset potentially significant plan cost increases.

Vanessa Flynn is vice president, client services at POMCO Group 

Of course, most of us have probably heard the legendary song “(I can’t get no) Satisfaction” by The Rolling Stones many times. Unfortunately, the words are also a feeling shared by many people these days. All you have to do is check your Facebook newsfeed or Twitter account to find people who “can’t get no satisfaction.” If that feeling spreads into the workplace, it can become costly and problematic. A recent statistic published by the Harvard Business Review pointed out that lost productivity due to employee disengagement costs more than $300 billion in the U.S. annually. So how do you find out if your employees are truly engaged and satisfied with their job? One way is to ask them.

Employee-satisfaction surveys measure how content or satisfied employees are with their jobs. Businesses have several reasons why they would want to perform a satisfaction survey, including:

• To prevent loss of productivity
• When there is a merger or affiliation with a new organization
• When hiring a new HR manager who must establish workplace-satisfaction measurements   
• While creating a bonus structure that is based on employee-satisfaction scores
• When required in the industry
• During major growth in the organization
• As a component of strategic planning
• During succession planning
• Amid a decrease in sales or customer satisfaction

The process to conduct an employee-satisfaction survey is fairly straightforward and simple. Employee-satisfaction surveys can be structured to identify and evaluate all the different components of the employee experience including:

• Company culture
• Training
• Understanding of roles
• Teamwork and cooperation
• Management-related issues
• Safety concerns
• Loyalty
• Compensation and benefits
• Performance reviews
• Workload
• Perceptions of management
• Flexibility
• Resources

A team of employees can help determine the topics covered in the survey. The questions in the survey should relate to the perceived likes, dislikes, and challenges employees might experience in the organization. Questions should be evaluated to make sure they are not leading to a desired response, vague, or open to interpretation, depending on the employee reading the question.

Whether you decide to manage the survey in-house or outsource it, the results can provide many insights beyond just the data returned. The results can help to establish new benchmarks for departmental measurements and can uncover areas in need of improvement that are not readily apparent. Typically, employees will provide more honest feedback in an anonymous survey than they would normally tell their managers or even fellow co-workers.

For accurate and reliable results however, employee-satisfaction surveys should be developed by professionals who understand how to put questions together to obtain unbiased information. They should also be administered appropriately with care and consideration for the organization’s culture and communication. The main value of such research is to receive honest feedback from employees. Many people will be hesitant to give a “tell all” assessment of the company or to even participate in the employee survey if they do not have the trust of anonymity. A third-party vendor can provide that anonymity as well as objectivity in analyzing potentially sensitive findings.

The results should also be communicated effectively and acted upon quickly in an effort to maintain a relationship of honesty, integrity, and trust among organization employees. The employer must be committed to report the results to employees and dedicated to make changes to the work environment. Transparent communication about the changes, their impact, and future plans are all part of a positive satisfaction-survey process. Without transparent communication, results reporting, and employee updates, employees will not trust the employer’s motives in collecting survey data. Over time, employees will cease to respond or respond only with answers that they believe the employer wants to hear. This makes the data collected on the survey useless.

Improving employee satisfaction can be a lengthy process, but taking the time and effort to do it properly can pay off in the end in terms of productivity, stability, and ensuring a positive customer experience. Employee-satisfaction surveying can be an important first step in the path towards organizational excellence. 

Lori Lichorobiec is the communications coordinator for Research & Marketing Strategies, Inc., or RMS, a full-service marketing and market-research firm based in Baldwinsville. Contact her at loril@rmsresults.com