[oofabz]

I wish employers did not provide health insurance, even though I have a chronic medical condition. The choices of plans offered by companies is far, far smaller than the choices available to me on the open market. I don't want to have to find new health insurance if my employment situation changes, possibly leaving me with a gap in coverage. The expectation that employer-provided benefits are at no cost to the employee is a fallacy - if companies did not offer health care as a perk, they would be able to offer higher salaries instead.

The only reason American employers are in the business of offering health insurance is because they get a federal tax break. This makes health insurance cheaper to the employer than to individuals. Given this, if my employer stopped offering insurance, they couldn't increase my salary enough for me to purchase the same plan myself. I think this is unfair - I would like to get the same tax break myself, or at least eliminate the tax break altogether so I am on an even playing field with businesses. This would allow me to purchase my own health insurance at rates comparable to what I'm offered at work.

Considering the tax situation, it's curious that Intuit would not choose to take this tax break. It seems like a short term move that allows them to cut costs while exploiting the economic stickiness of employment. This move makes them less competitive for employees in the labor market, but that only affects them in the long term. In the short term, the employees they have will be hesistant and slow to find new jobs.

[heavyset_go]

> if companies did not offer health care as a perk, they would be able to offer higher salaries instead.

Prices, including labor prices, are not determined by costs. There is no indication at all that companies would compensate employees more if they didn't have to pay for their health insurance. What is most likely to happen is that companies will pocket the difference, in the same way they've been pocketing the difference from increased productivity while letting wages become stagnant.

[mywittyname]

They probably would. I've had a lot of jobs that heavily emphasize how much is paid for benefits, and often it's used as justification for why raises weren't offered that year. These places would probably be happy to give everyone a raise and do away with the frustration with medical benefits, especially plans whose cost go up like 20% a year.

There are a lot of jobs which do not offer benefits, or benefits are offered with no part paid by the employer. These places would not offer raises, but these people would end up with better choices of private plans.

Benefits are a huge burden for companies, especially smaller ones. Coordinating benefits is a seasonal full-time job that someone has to do. I've known of a few smaller family businesses that gave everyone a raise, and told them to get their own health care coverage on healthcare.gov.

[heavyset_go]

> They probably would. I've had a lot of jobs that heavily emphasize how much is paid for benefits, and often it's used as justification for why raises weren't offered that year.

Sounds like an excuse to me, and if they're this bitter about paying for benefits, something tells me they'd be just as bitter towards giving substantial raises across the board for, essentially, no reason.

[brightball]

Comments like this give the impression that there’s an assumption that business owners are all just swimming in money and not one or two bad months away from bankruptcy. Most businesses do not survive more than 5 years for a reason.

[bduerst]

Businesses that cannot afford to retain talent and remain competitive deserve to not survive, in order to make room for more efficient organizations. This is a principle of the free market.

Also as a principle, regulating said free markets for QoL improvements (e.g. min wage, HI, disability, comp, soc sec, etc.) affect all participants - both efficient and destined-to-die businesses alike. If you can't exist through playing by the rules that everyone has set, why are you still in business?

[brightball]

Should they? Every business doesn’t have millions of dollars in cash to burn trying to find product market fit. Most start from nothing or personal savings, perhaps partially from the salary of a spouse.

When you start a business there’s an expectation that you’re probably not taking a paycheck from it for a few years while you try to attract customers to provide steady cash flow.

While doing this, you somehow have to find a way to hire people to help you grow.

If it doesn’t work out, the business owner loses everything most likely and will probably be on the hook for the space they were leasing.

Now if you survive and make it past all that, hopefully everything stabilizes and you’re able to run a successful business that can return more to you than you put in…but it’s hard. Very very hard.

This “should that business even exist” stuff comes from not having any idea how hard it really is and how much is really on the line or the ups and downs along the way (which are even harder when you’re trying to make payroll).

If it was easy, everybody would do it.

[gruez]

> Businesses that cannot afford to retain talent and remain competitive deserve to not survive, in order to make room for more efficient organizations. This is a principle of the free market.

This assumes that such "more efficient organizations" can even exist. If they are possible, why aren't they already around? Are those "Businesses that cannot afford to retain talent and remain competitive" that you speak of somehow preventing them from existing?

[FpUser]

>"Businesses that cannot afford to retain talent and remain competitive deserve to not survive, in order to make room for more efficient organizations. "

Reads like maximalist statement with zero clues about the subject.

[MomoXenosaga]

And why does that matter? Should we all work for free then in order to help out our employers?

[compiler-guy]

It matters in the present context because we are talking about how employers would respond if employees didn’t expect health insurance as part of their job. If employers stopped paying health insurance, then it is extremely likely that they would not pass the savings on to employees, but to use it to maintain the business.

[mywittyname]

It's not out of bitterness. People don't necessarily realize that benefits are as expensive as they are, or that they had been increasing in cost so dramatically. It's more like, "sorry we aren't giving raises this year, but we are covering an added $400/mo in insurance costs for everyone."

[lowercased]

A few years ago I sat in with a client on an 'employee meeting' where they discussed raises/insurance. No one had ANY clue what health insurance premiums were. The owner asked people what they thought it was per month. "$75? $99?" They went around the room. I said "$600". The whole room looked at me like I was nuts. The owner said "$560". Audible gasps around the room. People had literally no idea how much this stuff costs (this was... 5 years ago, IIRC).

[tshaddox]

I’m not really sure what that proves though. Each employee almost certainly saw the amount the employer was contributing when they selected their insurance plan. If they forgot that amount and later guessed a much lower amount, what does that demonstrate?

[munk-a]

I mean - that sucks and all... but cost of living is constantly going up. If a company can't afford to continue operating with the costs of wages that company should shutter its doors - that's brutal but it's also how markets are supposed to respond.

In Australia minimum wage laws means that Starbucks locations rarely have more than two people on staff - that's just economic forces causing a rational business response.

[bruce511]

Yours is a common belief, and I don't think you should be down voted for it, but you are wrong.

Firstly companies don't shutter, they downsize. The most vulnerable employees are the first to go, the higher paid ones are typically the most valuable, remain. Owners go last.

Secondly, in my experience, all employees would rather forgoe a raise and keep everyone employed that insist on a raise. We saw this first-hand in 2020. Lockdown brought extreme uncertainty but employees agreed to 50% [1] pay instead of massive job cuts.

Yes it helps that we pay staff well. Yes it helps that they get a bonus in the good years. Yes it helps that we have their interests at heart. Yes it helps that they are skilled and we don't want to lose them.

Yes, over the years some people have become redundant, but there are swings between good times and bad times, and no we don't shutter just because there's a bad time. That's explicitly _not_ how it is supposed to work.

[1] we had a min threshold for 50%, those under got 100%. Also thanks to govt assistance, and our ability to back-pay later, they all ended up "whole".

[2] ps - I agree on the need for a minimum wage. In almost all cases it is too low by a lot. And I agree that if you can't pay minimum wage, then you can't afford an employee.

[WalterBright]

Benefit costs normally add 40-50% to the salary costs of an employee.

[Redimo]

I'm sorry, but my experience in work in many different segments shows the exact opposite to be true. Theres barely any company that takes "You can rise quickly thorough pay bands if you put in the effort", or "we would pay you more without benefits" seriously and is even being truthfully with you. I've had one company, the one where I'm at now, where I earn good money, get bonus and that bonus is determined by the companies performance. We had bonus when CEO etc. didnt get any because they messed up. We have great benefits (2 additional paid weeks of paternal leave, i.e.), but it's the exception to the rule.

[siscia]

What company is that?

[Aeolun]

Problem with raises is that you pay taxes over them before getting around to paying for healthcare, right?

If the company is paying it it’s just a business expense they can deduct from their income.

[benglish11]

Presumably in the idealized scenario ( where individuals purchased health plans themselves and not through their employer) the individual would get a tax break for the cost of their health insurance.

[tshaddox]

Also, group insurance rates are often lower than the rates an individual could purchase themselves.

[lostcolony]

Man, it's almost like we just need some sort of mandatory group that everyone falls into, and then has to pay into. But, we could also provide some tax break, refund, or otherwise just not collect the fee, from, those who couldn't afford it.

If only someone had some sort of working template on how this could be done in a cost effective way. I'm sure everyone, regardless of where they fall on the political spectrum, would rally round such an obvious net good in that case.

(I know that bit of sarcasm is a bit of a tangent, it just feels like this whole subthread is missing the obvious)

[Aeolun]

> it just feels like this whole subthread is missing the obvious

I think we just skipped over the part that we already know is never going to happen, however much that might be the ideal solution.

[RyanGoosling]

The purpose of a business is to generate profit. Giving out goodwill raises goes against this fundamental purpose unless you need to retain SF tech talent to maintain the business. Businesses would continue to minimize their expenses, the largest of which is generally Human Resources. I disagree with your perspective.

[JamesBarney]

This argument relies on a really weird assumption that companies aren't already compensating employees as little as they can get away with. That companies could compensate employees less by not offering benefits but choose not to out of the goodness of their heart.

If employers are already compensating employees as little as they can get away with then if they stopped compensating via insurance, they'd be required to compensate via salary.

[WalterBright]

> This argument relies on a really weird assumption that companies aren't already compensating employees as little as they can get away with.

Of course. And the employee negotiates for as much as he can extract from the company. That's how markets work.

[usefulcat]

Imagine a scenario where overnight, all US companies stop offering health insurance. In this scenario, all those employees who used to have health care would now have to pay for it themselves (or do without it). So they're all going to be expecting an immediate raise to compensate for this increased expense, and if not they'll almost certainly be looking for a new job that pays a lot more (after all, it's not like they need their old job for the insurance any more..)

If you're a company, unless you were already planning to do some mass layoffs, you're going to give most of them that raise because the alternative is having a bunch of people quit. And if you don't increase your offers for new hires, you probably won't be hiring anyone either.

[paulmd]

> If you're a company, unless you were already planning to do some mass layoffs, you're going to give most of them that raise because the alternative is having a bunch of people quit. And if you don't increase your offers for new hires, you probably won't be hiring anyone either.

And yet price stickiness is a thing that exists!

https://www.investopedia.com/terms/p/price_stickiness.asp

This is the problem with a lot of "econ 101" stuff, it makes these big sweeping assumptions like "markets are price-efficient and operate at market-clearance prices" and after spending econ 101 building it all up, econ 102 and 200 and etc etc will spend semesters telling you why it's all crap.

Markets are not price-efficient, real-world prices are very sticky, and that includes the price of labor (actually labor tends to be far stickier than most other products). For example, vanishingly few real-world employers are going to offer automatic raises to cover cost-of-inflation, which is the same mechanism that you would be relying on to increase wages after removing health-care benefits.

A lot of people in retail/food are still making the same $11 or $12 they were hired on at, despite much higher salaries often being paid to new hires (guess the efficient market hypothesis says their on-the-job experience has... negative value?).

Tech is its own little thing, competition for tech labor is much much tighter, of course, but that much is obvious. In the real world, you can already see that labor prices are very very sticky and owners will almost never choose to pass these savings along.

[KerrAvon]

The catalyst for that scenario is likely some form of effective universal healthcare, which you will pay for indirectly via taxes.

[axlee]

It will have to be paid for, as is everything, but it will cost much less both in aggregate and at a personal level. Source: any other country.

[lostcolony]

It also, to the grandparent's point, would not really necessitate anyone spending anything differently. The amount employers pay to private healthcare plans instead becomes a corporate tax; the amount individuals pay to private healthcare plans instead becomes an individual tax. But just by dint of it all going to the same pool, which now covers everyone, gives such massive pricing power that all those "$64 for an aspirin" BS charges will be cut to be in line with, yeah, any other country.

[maccolgan]

Universal healthcare funded via taxes is the exact opposite of insurance. Insurance premiums are decided upon your medical profile and risk. Taxes are based upon income, which has nothing to do with health.

[lowercased]

Perhaps insurance companies would have to start competing for the business of individuals and families, and... perhaps that competition should drive down the price some, so they could get our business? (ha ha ha, of course, not going to happen).

[wankerrific]

Sure. Just like “competition” in broadband has driven prices down across America.

[butlerm]

The reason why that won't happen spontaneously is that the employer purchased health insurance subsidy amounts to something like $273 billion per year (as of 2019). Employees would have to pay a comparable amount in additional income taxes to purchase comparable health insurance for themselves.

[axlee]

> Employees would have to pay a comparable amount in additional income taxes to purchase comparable health insurance for themselves.

This is false: they would pay a lost less in additional income taxes. Americans overpay for the same services as every other developed country. They are being fleeced.

[throwaway2037]

Another idea: Cut military spending by $273 billion.

[bb88]

Labor price is salary + benefit packages. Reducing the cost of benefits from the equation would mean the company has extra resources.

The company could:

* immediately raise people's salaries

* or hire in more people (which increases demand)

* they could take the extra profit and distribute that to shareholders

* or drop the price of their products and services and pass the savings on to the customer

* or they could make capital investments.

In most cases, I would expect salary prices to increase for labor (even if not immediately) or make people's current salaries more effective in purchasing power.

[AceJohnny2]

Most of what you've described is "trickle-down economics", and, well...

Also, you forgot the popular option:

* give (bigger) bonuses to their execs

[JamesBarney]

If corporations could stop offering health insurance in order to increase profits, why don't they do it?

[heavyset_go]

They're legally required to offer health insurance plans for full-time employees.

[butlerm]

Most employers did it for decades before they were legally required to. The tax benefit to having your employer purchase your healthcare has been substantial since about World War II and such plans have been commonplace ever since, outside of unusually small employers or employees who are marginally paid.

[JamesBarney]

Most employers provide far more than the minimum required health insurance.

Also the penalty for large employers is much smaller than the cost of health insurance (50% to 18% depending on individual vs group coverage), assuming that if companies didn't provide health insurance they'd pocket the difference means companies should still pay the fine.

[austhrow743]

Ok. Why do they offer health insurance plans beyond the minimum? Why do they pay above minimum wage? Why do they offer beyond minimum PTO? Equity options?

[bb88]

I'm not disagreeing, but this is the way corporations work in 2022.

[nitwit005]

You're worrying overmuch about "the market". The US health care system is pretend free market. The government is paying for much of US health costs, and regulating various aspects of it.

What really matters is how the government policies would change when it's moved from employers to people. The government is likely to pay the costs for low income people, which will also mean their wages are likely not to rise.

[mbostleman]

Companies would "pocket" the difference? What pocket would that be exactly? Companies are in competition. While company A, might "pocket" the savings, company B will use it to their advantage in potentially any number of ways - paying employees more, reducing prices to customers, investing in new equipment. You refer to the 8 million companies in the US as if they're one entity that conspires in lockstep. That's not how it works.

[heavyset_go]

This would suggest that things like this[1] could never happen because of competition, but they have.

[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

[nostrebored]

The philosophy of minimizing benefits to maximize salary is the one espoused by Amazon. It isn’t a hypothetical, it’s used by one of the most successful businesses on the face of the earth.

[mbostleman]

Collusion is the antithesis of competition. And it's illegal, hence the litigation. I am referring to the behavior of a free market, not an illegally fixed one.

[Calavar]

A 100% competitive free market is the analogue to a frictionless vacuum in physics. It's a convenient model for academic purposes, but it's not something that really exists.

[Daishiman]

There is no such thing as a free market. A free market is a spherical cow in a vacuum. Corporations are generally far more informed of the nature of labor markets than labor itself a don't risk an equivalent of getting a life-threatening condition while having no health care. Corporations also collude, whether directly or indirectly, in many fronts.

[fennecfoxen]

And yet the theories of the free market, like many physical models, retain significant predictive power!

[JaimeThompson]

Does a free market exist anywhere on Earth?

[WalterBright]

> There is no indication at all that companies would compensate employees more if they didn't have to pay for their health insurance.

Employers use a figure called "total compensation" for what it costs them to employ someone. This includes salary and the cost of all the benefits, including all the so-called "employer paid" taxes and benefits. The WSJ ran an article long ago that showed employee productivity matched total compensation, not salary compensation.

Employers certainly do care about the cost. They don't care what percentage of those costs go to employee takehome pay. But offering pre-tax health insurance means the employer can offer less total compensation.

Any economic article that talks about salary instead of total compensation is either ignorant of accounting reality or is trying to mislead.

[closeparen]

Companies are paying the increase in productivity to the professional-managerial employees who are actually more productive because of technology, scale, etc. and not to the masses whose productivity is the same as ever.

Even when we talk about redistributing this increase, we mostly talk about redistributing it from the professional-managerial employees, who populate the higher personal income tax brackets, not from the companies themselves (corporate tax) or their owners (wealth tax). If you are right that companies and their owners are pocketing it, then we are looking for it in the wrong places. But it seems like it really is largely going to the PMC.

[maxerickson]

That's fine, the idea isn't to get rid of employer provided healthcare to make salaries go up, the idea is to get rid of employer provided healthcare because of the problems that come with it.

[heavyset_go]

Take a look at the individual market and what is offered on it. If you want a comparable plan to an employer's group policy, you will be paying close to a grand a month in premiums for just yourself alone, and you will have yearly deductibles to the tune of thousands (sometimes tens of thousands for a family) dollars.

Without increases in compensation, workers will suddenly have thousands of dollars in new yearly expenses just to maintain coverage, and many will be forced to go without coverage at all.

This wouldn't be a problem, though, if employer-provided healthcare was replaced with a universal healthcare system that most first world nations have had for ages.

[maxerickson]

So do you think replacing the insurance market is more or less likely when people think the 25% of their premiums that they pay are what their insurance costs?

I have pretty good insurance, when I started, a few weeks before the end of a year, some of the folks I was working with were bitching about how it didn't cover anything and was expensive (the employee premiums were tiny at the time and are still low).

[tiahura]

Prices, including labor prices, are not determined by costs.

That’s very much not the case for 99.9% of goods and services.

Prices for labor, i.e. wages, are set by the demand for labor, and workers’ opportunity costs.

[deelowe]

I think they would, at least in the short term. Most companies already include benefits their offer package.

[bduerst]

Health insurance is a budgeted overhead variable cost assigned to employee expenses. It's true that should HI disappear, not all of the HI cost will be transferred to employee salaries, but it's definitely a non-zero amount.

[munk-a]

And, I think, over time we'd see more and more of that HI cost be transferred to employee salaries. Supply and demand is often taught in classes as "If this bar shifts here the economically efficient price point shifts over to here" - the portion that ends up frequently omitted is that that shift takes time. It's why some taxes are leveraged on employers and some on employees - in the end the net result is the same, but we can end up enjoying decades of beneficial inefficiencies while the market works to respond to the shift.

[bduerst]

Yes, if HI becomes universal healthcare in the U.S., like most developed nations, then funding will be through a variety of means, inevitably involving income tax.

That said, depending on the splits, it's much more probable that the cost to "employee salaries" will be less than their typical OOP expenses anyways.

[kukx]

The companies compete for workers, especially highly skilled ones. One company rising wages would push others to react in a similar way assuming they compete for the same talent.

[photochemsyn]

Not so sure about that. Anti-poaching agreements are supposed to be illegal but I imagine this kind of thing continues today in secret:

https://www.cnet.com/tech/tech-industry/apple-google-others-...

[heavyset_go]

And yet wages for highly skilled workers haven't kept up with productivity increases, cost of living increases and inflation in many parts of the country, including areas like SF or NYC where you find some of the highest paid workers.

[bb88]

Productivity increases create less demand for labor, so you would expect the demand for labor to drop. If two workers now can do the job of four people five years ago, it doesn't mean the two workers get paid double.

[munk-a]

Somewhat and I think highly skilled workers actually "suffer" from the worst relative compensation. Most legitimate 10x-ish developers don't make 10x what their coworkers are making, they end up producing significantly more value for the company then they're costing with the excess value going to profits and subsidizing other employees.

I personally think a model like this is pretty fair, if somebody is making 50k a year then pulling in 1M annual is pretty silly - but it makes sense to account for that difference with taxation rather than the arbitrary choices of private employers.

[jwilber]

Yes. As someone with a chronic health condition living in America, I agree completely.

Leaders of this country really do not care about the healthcare of its citizens (just look how long people with diabetes have been screwed, how long people have been able to lose literally everything over medical debt, etc.), I can’t imagine leaving things to the individual would be helpful in any manner whatsoever.

[zaroth]

Budgets are set by costs. When you run a business, you care about the “fully burdened” cost of each employee, and you hire as many as you can within your budget. One of the line items in that is my half of the payroll tax. Another line item is health insurance. Another may be an offset for office space and equipment.

Whether my fully burdened cost budget has a line item for health insurance being paid to a 3rd party or to the employee is totally irrelevant. Tax law currently happens to make it much more efficient for me to pay that money to a 3rd party, so that’s where it goes.

The reason I have that line item is due to a combination of market forces and regulation. By no means do I get to choose just not to pay it, if I expect employees to keep working for me, or the government not to shut me down.

[aYsY4dDQ2NrcNzA]

> When you run a business [...] you hire as many as you can within your budget.

It sounds like you’re saying that employers are always trying to hire as many people as possible.

Which would be nonsense, of course.

[zaroth]

That’s not what I wrote. In fact, not even what you quoted me as writing.

A bizarrely uncharitable non-takedown, and completely besides the point as well?

[aYsY4dDQ2NrcNzA]

I’m sorry for the misunderstanding, but I believe I have quoted you accurately.

[chrisseaton]

> and you hire as many as you can within your budget

If you believe this then what's your explanation for why Google hires a smaller number of expensive engineers, rather than a larger number of cheaper engineers? They could hire 10x if they went for only lower-tier college new-grads!

[zaroth]

Sorry if I missed the word “qualified” - I felt it was presumed by the word “hired”.

Obviously a business would not be particularly successful hiring janitors to write code simply because they could pay them less.

[lbotos]

Google is budgeting for more expensive engineers, so they end up hiring less.

[morpheuskafka]

> The choices of plans offered by companies is far, far smaller than the choices available to me on the open market.

Maybe I wasn't searching correctly, but I was recently discussing healthcare and taxes with someone and briefly searched on the Healthcare.gov exchange to look at prices. There were only three PPO plans (where you can freely go to any doctor in network), and all three were HDHPs, all from the same company. There were many HMO plans, some HDHP and others with low deductibles, but often extremely small local networks and limited choice of both PCPs and specialists.

> This makes health insurance cheaper to the employer than to individuals.

One other thing to note in your analysis is that most large employers are not buying any insurance, but actually self-insuring (funding the claims out of their own pool of money). So the employers are actually acting as insurance companies for their workers, rather than simply buying and reselling commercial insurance.

There would be additional considerations beyond taxes in analyzing whether this type of insurance is more economically optimal, for example, the fact that each company has a distinct risk pool which may not be similar to the general population, depending on the company.

[heavyset_go]

This was my experience, as well, with the individual market. It is virtually impossible to replicate an employer-provided plan at all with market plans. You, as an individual, do not have the leverage to buy what most would consider good health insurance plans on your own.

[Rebelgecko]

Are you in a state that has pushed back against ACA? Or maybe you're only looking at the "bronze" tier, which will be skewed towards low cost HMOs and HDHPs?

FWIW, in California I see like 5 different options for HMO across all of the tiers, a couple are local ones I've never heard of, but there's also some like Kaiser that are fairly large networks.

[heavyset_go]

I'm in a state that championed the ACA, and there are dozens of plans available on the individual market, but none of them are very good. There are plans from large insurers for large networks, but those plans are much worse than any group policy plans employers can buy from the same exact insurers. And it gets even worse if you want to buy a market plan that covers your family.

[morpheuskafka]

This is for Orange County, NC, which has not expanded Medicaid but is using the regular federal ACA marketplace. There are definitely a lot of low cost/quality HMOs at the Bronze level, but across all tiers there are 63 HMOs, 3 PPOs, and 10 Point of Service (POS), a term I hadn't heard previously.

For comparison, I am on my mom's insurance from Belk Stores which is self-insured, offering three different HDHP PPO plans with a pretty good network and a range of deductibles within the HDHP window. Premiums are pretty bad. My dad worked for a SP500 semiconductor company before retiring, about five years ago they switched to HDHP-only, which just two options both at the higher end of the HDHP range. Premiums were better, but actual coverage not much better.

[DamnYuppie]

What plans are available to you will depend on which state you are in.

[lowercased]

> The only reason American employers are in the business of offering health insurance is because they get a federal tax break

The cost of paying me is also tax deductible, so they get a 'tax break' by paying me more money.

> This makes health insurance cheaper to the employer than to individuals.

I don't think that's the root. Large insurance companies seem to want to sell to larger companies - groups of people - vs selling insurance to individuals. Selling to a group is where it seems some price reduction happens. And... by and larger, if you're selling insurance to people who are already healthy enough to be working regularly/fulltime, your costs for insuring that 'pool' will be somewhat cheaper than the costs of insuring any random individual.

> they couldn't increase my salary enough for me to purchase the same plan myself

If the cost of my health insurance was deductible from my individual taxes, then the entire market would be turned upside down. There are certain thresholds that need to be met re MAGI (IIRC) before health insurance insurance premiums are deductible by individuals. I'm "self employed" so the entirety of my premiums are tax deductible, but for the average person working a W2 job someplace that doesn't provide health insurance for them, it's not a deductible expense, which is a total sham.

[sterlind]

I am increasingly disabled, but I'm still managing to keep my job and its amazing health insurance, thank God.

Insurance this past year has paid for like, a couple dozen specialist visits, 6 MRIs, weekly rehab, a reclining desk and a power wheelchair. I maxed out my deductable in February :D

My health would be better if I could go on disability but that pays like, $1K a month and is ridiculously hard to get.

[bombcar]

It's a tax break for the employee and hence for the employer - they can spend $X on insurance and give the employee $x+tax rate in benefits.

What should be done is entirely decouple it so that health insurance AND medical expenses are above the line deductible - or make none of it such. And then let employees pick whatever they want.

[flatiron]

Those healthy people have sick spouses and children though. That part doesn’t add up.

[businesscasual]

But why do you have to think about this at all? Wouldn't it just be easier that this was provided by the state, so that all citizens could afford getting necessary health care. At the same time it would relive you of having to compare coverage, copays, deductibles or in general understand the full fine print of your insurance agreements. Most comparable industrial countries have found a pretty decent solution to this where you move the financial burden of many basic services (health care, schooling, etc.) from the public, over to the government - allowing all citizens to benefit from these, without having to wonder if the can afford it.

[E4YomzYIN5YEBKe]

Food is more important than healthcare. Do you think the production, selection, and distribution of food should be decided by the state?

[businesscasual]

I am not sure if its a justifiable comparison, typically you don't end up with a food costs in the hundres of thousands or millions in the blink of second. It's not like you all of a sudden get a bill from Mickey D for someone showing a truckload of hamburgers down your throat.

I am not completely sure where you want to go with this argument. But as a Scandinavian I am very much comfortable with the state ensuring my access to health care, knowing I do not ever have to ever have to think about medical costs, health insurance or access to one of the better health care systems in the world for me or my family. We could very much bear the costs of having private health insurance, but its just one less (big) worry...

I do think that production of food is very much a state matter - and unless you knew taxes in the US today go towards ensuring safe and predictable production of food through i.e. agricultural subsidies. I would expect the state to ensure that the country have a viable and thorough plan to ensure food supplies.

[heavyset_go]

Food production is heavily subsidized in the US because a free market would wipe out producers the second market conditions impact their profitability.

[macinjosh]

Wouldn't it be easier if we all jumped into the vat of jelly with the matrix connection jacked into the back of our necks!? We wouldn't have to eat or poop or sleep. We could just trust the powerful to make every decision for us. It would be soooo much easier.

Forgive me, but when it comes to my healthcare I want the most choice and control as I can have. I don't want to be stuck with whatever some bureaucrat decides is worth it.

Lastly, people make stupid decisions and they get hurt. They go rock climbing or skydiving, they ride their bikes on busy streets. Why should I shoulder the responsibility for people's poor life choices.

[Cederfjard]

So you're planning on paying for all of your health care out of pocket, then, since an insurance plan is right out if you don't want to help collectively shoulder the risk? I hope you've done extraordinarily well for yourself, in case you get sick.

Personally I haven't done that well and could not afford my costs if they weren't pooled with other people. I'm happy that in my case this is publicly funded, so I don't have to deal with profit-maximizing private insurance companies who are at every turn actively trying to find reasons not to cover me.

I'm also glad that people where I'm from who are less fortunate than me don't have to go without needed health care because they aren't able to get good enough jobs. In fact, I care much more about the latter than you or me being able to choose between a bunch of options. And if you're doing so well and that's what you want, private health care is typically still an option even in countries with publicly funded systems.

[businesscasual]

Oh well, too bad you still have to pay for those accidents through your insurance premium - thats how it works. The only difference is that you either pay it over tax or via a private business that will try everything to wiggle out of paying for your injuries.

How much choice and control do you really have by having a private insurance? If you get hit by a car on the street, your kid trips in the stairs, you walk into a wall and crack a rib, the difference between your and mine is that: 1) I don't have to think about what it will cost me 2) I don't have to fully understand every aspect of my insurance agreement in order to understand what I am entitled to 3) I don't have to fight a insurance company if they don't want to pay for it 4) I can just relax, have a beer, and know that I will be taken care of if something happens

[lbotos]

> Why should I shoulder the responsibility for people's poor life choices.

You do know how private insurance works right?

Someone makes an insurance company. Then they sit down and figure out the probabilities of things happening to people. They then put a price to join the group. They then divvy up that money to people in the group that have had things happen to them.

With insurance you will always be paying for other peoples "poor life choices"... that's the way it works. Maybe one day it will be your poor life choice (or accident.)

Having state healthcare by default does not necessarily mean a ban on private healthcare. Both can coexist.

[lowercased]

> Maybe one day it will be your poor life choice

Like being born with a certain combination of genes which aren't as healthy a combination as others. Or being hit by a car, and losing a limb. Or being shot in the head by someone and persisting in a vegetative state for years.

Yeah, the nerve of these freeloaders and their 'poor life choices'.

[MomoXenosaga]

The rest of the world needs a country to send all the crazy asshole libertarians to. America has gracefully accepted that burden as this commenter points out.

[drewrbaker]

I run a 20 person digital agency in Los Angeles.

The amount of time we have to spend each year sorting out our healthcare for the entire company is mind blowing. You are totally correct, it becomes a full time job for 3 or 4 weeks for myself and another partner. So much effort and knowledge required for something that isn’t even our core business! And it inevitably causes drama with employees who don’t like some part of the group plans we end up with. Very stressful.

We only offer it as our employees all say that this benefit is really important to them. I didn’t know it was a tax break for us to be honest.

I wish more employees thought like you did. Our average monthly cost per employee is about $500 for a “silver” PPO plan, and about $110 for dental. Average age of our employees is below 30.

I’d gladly pay employees the $610 extra a month just so we don’t have to deal with it and the drama that comes with it. This would actually save us money from the energy wasted dealing with insurance companies. And no one who’s dealt with our insurance plans over the years has had a positive experience. My brother (who worked for my company) cut his chin while out of state. Required 2 stitches, and he just walked to the closest ER to get them. $3500 it ended up costing him, even with our insurance and countless hours fighting the insurance companies too. Didn’t even see a doctor, a nurse did the stitches. It’s a joke.

Other than salaries, health insurance is the largest expense for our business. Think about that at the scale of the entire economy and its mind blowing the wasted energy/effort on this “system”.

I’m originally from Australia. We have “socialized” healthcare there. My brother is back visiting family currently and got an x-ray and ultra sound for $310. The American system is absolutely embarrassing.

[helsinkiandrew]

Why is this? (I'm used to European 'socialized' healthcare). Is it just the amount and type of cover offered by different policies is wide and opaque, the age/health of the employees effects the price/cover?

Aren't there insurance brokers that provide tools to compare simply. Would a system that allowed employees to vote/order the cover they would like in the plan and then you to adjust the price point until you get matching policies that provides an acceptable level of cover.

[gen220]

Each insurance company offers a myriad of different policies, and they change a little bit every year.

Brokers will educate you on specific plan mechanics but will avoid explicit recommendations because they don’t want to take blame for choosing the “wrong plans” for a company.

Each plan is optimized for specific scenarios, e.g. young person with no medical risks or chronic conditions, middle aged person with chronic conditions and established doctor affiliations, so on and so forth. But they aren’t explicitly labeled that way, so people have to figure out what makes sense for them.

If you’re an employer who cares a lot about this process, you basically need to mind read the healthcare needs of each of your employees and offer a menu of options that satisfies their needs, while trying to avoid offering options that nobody should rationally choose.

If you know nothing about health insurance it makes the whole process much harder.

Source: worked in American health insurance for years.

[Spooky23]

Never underestimate the evil of HR. It’s a way to offload headcount without a layoff.

They probably agreed to not layoff Mailchimp employees in the sale, so they make them quit. Purging the sick, tbe pregnant, etc from the company is a way to cut costs, and doing so through some elaborate bureaucratic fuckup avoids government intervention.

[bb88]

If corporations are dictatorships, HR is the intelligence agency working against the population.

[Supermancho]

> I wish employers did not provide health insurance, even though I have a chronic medical condition.

I've had multiple open heart surgeries. My medical events are relatively rare (every couple years) and I recently went completely septic for 4 days (started to have multiple organ failure ~3 days from no-return) due to a cascade of underlying issues. I know my medical coverage and it's been critical to my survival for my entire life.

I have NEVER used employer health insurance and anyone with major medical conditions would be foolish to depend on employer coverage in most cases. The offered plans are basically a big deductible with some minor coverage for non-catastrophic, no surgical coverage, nothing chronic. More expensive plans cover more dependents. Gee thx. It's all but useless and I have simply declined it everywhere for the last 25 years to keep the ~25$/mo, as I have paid my own (car payment-sized) platinum level health insurance plan everywhere I've gone (and my wife's). The type of company - Finance, Medical, Marketing, Retail, Consulting (ironically the best I've found), doesn't make much of a difference. Every now and then you find some employer that will "cover your healthcare 100%" which is inevitably code for "cover the plans we choose, which aren't different than anyone else".

[seattle_spring]

My health insurance costs me $0 (fully employer paid), has a $300 deductible, and a $3k annual maximum. Last year they covered more than $100k worth of expenses without even a small amount of fight.

This is a similar plan to my last 3 employers, companies of various sizes HQd in either SF or Seattle. If I had "multiple open heart surgeries," it would cost me a max of $3k in a calendar year.

Where are you working that you are not being provided similar plans?

[lowercased]

And... when you stop working and need $100k+ of medical expenses per year... ?

You're in a very fortunate position, but still dependent on the largesse and good fortunes of an employer (or multiple over the years), and when they have no use for your services, you'll be in the same boat as many others.

[seattle_spring]

What does that have to do with the post I was responding to? I was stating that typical employer-provided healthcare in my experience is very good. They said:

> I have NEVER used employer health insurance and anyone with major medical conditions would be foolish to depend on employer coverage in most cases. The offered plans are basically a big deductible with some minor coverage for non-catastrophic, no surgical coverage, nothing chronic

Which is just completely untrue unless the best employer you've been with is a regional fast food joint.

[lowercased]

my point was no matter how good it is, it's time limited to how productive you are, not how much you need.

[rmatt2000]

What kind of car do you drive?

[Supermancho]

I lease a 2020 Subaru. My medical coverage is greater than that payment, as healthcare has risen very quickly in the last 10 years.

[smsm42]

1. You can get some of the tax break if you use HDHP plan + HSA. It's limited to about 7K though, because if everybody would take big tax breaks, who'd pay for those trillion dollar bills they're passing every year now?

2. US healthcare system is incredibly hostile to people trying to pay their own costs and designed to be maximally obscure and confusing. Imagine buying a car where your car dealer, tire manufacturer, window glass manufacturer and upholstery supplier bill you separately. Now imagine when you come to the dealer and ask how much the car would cost, they shrug and tell you you'd know when the bills come, just relax and sign on the dotted line. If you really insist, they could give you an estimate - something between 1K and 100K dollars - but they don't guarantee anything, it's just an estimate. And no, you can't choose the suppliers upfront or know which ones they'd use - this you'd also know only when the bills come. And no, there's no way to know when or how it happens - they bills would just show up one day as a surprise. Sounds like a nice experience? That's how the healthcare system works, day to day.

3. The frustrating part is that most of the people think it's the only way to manage it, and those that don't think that the only way to fix it is to nationalize the whole thing. I mean we can create insanely complex supply chains (think how many people cooperated on making a car? And you still can come to a single place and pay for it with a simple transaction at cost known in advance - magic!) - but somehow healthcare is where it all disappears and figuring out the separation of labor thing becomes the problem of the end user.

[jackconsidine]

I was under the impression (from being on the public market and later self-employed, company subsidized insurance which is altogether cheaper and better) that companies have pooling power which allows them to cut deals with insurers. Is that not the case?

[candiddevmike]

There are two kinds of costs with health insurance for companies. The funding to pay claims and the administration of said funding to pay claims. The administration part is the money maker, and while ACA attempted to curtail what they can charge for this/profit from it, they do creative things like "outsource" IT or HR to a separate company (with the executives as ovepaid board members). It's kind of like tax evasion only instead of taxes it's reducing your premiums.

[lotsofpulp]

> they do creative things like "outsource" IT or HR to a separate company (with the executives as ovepaid board members)

Source?

I am seeing 10-K reports showing UHC, Anthem, CVS, Cigna, Humana, Molina, Centene, etc all with profit margins ~5% or less.

Is the claim that executives at one or more of these companies is attempting to bypass ACA regulations (and violating fiduciary duties to their own employer) by overpaying for services to outside entities that the aforementioned executives control?

Seems like a grand conspiracy theory.

[candiddevmike]

It's real. You won't see this on the 10-K, you need to look at the 990s (which tend to be hard to find). Here's Blue Cross Blue Shield Association from 2017: https://projects.propublica.org/nonprofits/organizations/135..., under part 7, independent contractors, you see "HEALTH INTELLIGENCE CO LLC". This is Blue Health Intelligence (as in Blue Cross Blue Shield Intelligence): https://bluehealthintelligence.com/. Their board is made up of a bunch of blue cross execs.

They spent 20+ million with this company, how much do you think the execs on the board get paid? No one knows because they're private/for profit and don't have to publish annoying things like a 990.

[lotsofpulp]

BCBS does not sell health insurance though. The companies I listed are health insurance companies, which would be subject to the ACA.

[chevman]

Check out the VC arms of all these insurers. Lot of capital they got! :)

[tyingq]

Many large companies also self-insure to pay claims, and only pay the insurance company to administrate the plan. That makes the effective cost much lower (well, in relative terms anyway...health insurance in the US is broken.)

[gamblor956]

The only reason American employers are in the business of offering health insurance is because they get a federal tax break. This makes health insurance cheaper to the employer than to individuals

This is wrong on so many levels.

First, employers get a tax break because compensation expenses are generally deductible as "ordinary and necessary business expenses" required for the employer to be competitive in the labor market.

Second, employer policies are cheaper because the risk pool is cheaper to insure than the individual pool, so the insurers can make the same or more profits despite charging lower premiums.

The combined effect is to make employer-based health insurer significantly cheaper on both a pre-tax and post-tax basis than individual plans. But even without the tax benefit employers would still be incentivized to provide health benefits in a labor-competitive market. For example, many still provide free meals and parties to employees, even though meals are only partially deductible and parties are not deductible at all.

[forty]

I don't know the US system at all, but here in France employee health insurance ("mutuelle") are mandatory. The main benefit is that the cost is the same for all employees, no matter their health condition, age, etc. Basically it's a solidarity thing which allows everyone in the company to be covered well for a reasonable price.

[pnutjam]

Last US company I worked for, before the current one, instituted tiered policy costs. I made more, so I paid more for identical coverage. I thought it was good. They had pretty decent insurance.

[mediaman]

Is health insurance not provided by the state in France? I thought employer-provided health insurance was just was an odd Americanism.

[yurishimo]

There are a number of other western countries that have private healthcare systems. The difference between their and ours is tight regulation and cost controls, often combined with a robust public option for the unemployed to fall back on.

[forty]

I should add that in France, you can keep your employer health insurance for free for one full year, in many cases when you lose your job which limit the risk of a "hole" in the health coverage.

[giaour]

France has private supplementary insurance programs in addition to the state run health insurance program.

A good corollary in the US is Medicare: everybody over 65 can enroll in Medicare Part A for free, but you can also choose Part B, Part D, and "medigap" coverage, each of which is optional and has a monthly premium.

[forty]

There is a "baseline" provided by the state, and the employer health insurance adds extra coverage.

[Dma54rhs]

It's still tied to working and your employer pays to the pool.

[capdeck]

There is also another differentiator - companies buy insurance for all employees (i.e. in "bulk") when if everyone were to buy it privately, insurance companies will have to sell it in "retail". As is always the case with any business - bulk customers have preferential treatment, lower prices, better terms, you name it. Retail always pays it in full. While current employer based insurance model is broken, I don't think goin "full retail" will change the situation much. We'll end up in a situation similar to wireless service market - 3 major players with overpriced plans and lots of cheap MVNOs that stop having any coverage 5 miles down the highway.

[inportb]

> I would like to get the same tax break myself, or at least eliminate the tax break altogether so I am on an even playing field with businesses. This would allow me to purchase my own health insurance at rates comparable to what I'm offered at work.

Maybe not. Businesses have more negotiating power because they're bigger buyers, so they would still have access to more competitive rates. Unless you got together with a lot of people to negotiate together (and this might be a startup opportunity).

[majormajor]

> The choices of plans offered by companies is far, far smaller than the choices available to me on the open market.

On the flip side, the cost my employer pays for my plan is far lower than they would bill me for it on the open market. Last time I looked at the individual market it was amazing how bad even plans for $500-1000 were! They could give me a raise exactly matching what they'd stop paying and I'd still lose out.

Edit to clarify: That's not a "this is cheaper to us after we account for the tax break." That's a "this is the rate it costs us" vs "this is the rate it would cost you" difference.

The negotiation power difference is real. Private market health insurance would need to be well-regulated or we'll all just get screwed even more.

Employers like this because it gives them power over employees and makes it more attractive than being an entrepreneur not just to save money on taxes.

[amarshall]

Indeed, and the commenter you’re replying to said just that.

[majormajor]

Edited to clarify that I was bringing up negotiation power because I think that is the difference here, not anything about tax preference. And this benefits companies because it locks employees in.

[efficax]

They could offer higher salaries, but would they? And employers are able to negotiate better plans than you can get in the individual market. There's no way i could get the plan i have through my work for the about $12000 they spend on it.

But I agree, healthcare should be provided by the federal govt like in every other advanced nation

[benatkin]

I don't quite understand what you're envisioning. Our system depends on many employers paying for health insurance. You would have to change a lot of things about our system for it to be decoupled.

In South Korea the healthcare premiums are split between employees and the employers: https://en.m.wikipedia.org/wiki/Healthcare_in_South_Korea They don't have to negotiate group plans and maintaining coverage when switching jobs is pretty seamless.

There has to be a plan if employers stop providing insurance en masse, and I'm not sure it's a good idea to stop getting premiums from the source of personal income entirely. That seems to be a convenient place to get the kind of money that healthcare demands.

[bushbaba]

Better yet. The government should require all health prices be published online, with the same rate charged to all patients regardless of insurance provider.

Make this similar to gym membership. Let each person decide where to go based on cost and needs. With insurance remaining their for catastrophic events only.

[heavyset_go]

People don't decide to have heart attacks or get hit by cars outside of a hospital that's in their network. Surviving heart attacks can cost half a million to over a million dollars if care was received out of network. Disability can easily costs millions over a lifetime, too. Price transparency won't suddenly make that affordable.

[bushbaba]

That’s the point of insurance. If your house burns down and you incur huge expenses. Insurance kicks in.

[heavyset_go]

Insurance doesn't kick in when you're out of network.

[tssva]

"Considering the tax situation, it's curious that Intuit would not choose to take this tax break."

Intuit did provide health insurance to these employees and take the tax break. There was a small gap between when the previous MailChimp insurance ended and MailChimp employees were placed on the Intuit offered health insurance. Once on the Intuit provided plan coverage was retroactive to the date the MailChimp plan ended. The employees could submit claims to the Intuit plan for reimbursement of medical expenses paid during the gap. The issue is that floating the money during this time could significantly impact the finances of the employee or that the employee may not have the funds to do so at all.

[WalterBright]

The reason for employer-offered health care plans is they are paid from pre-tax earnings. If the employee paid for it themselves, it would be paid by post-tax earnings, making it much more expensive.

[chromaton]

Depends. If your employer doesn't offer health insurance, you can shop for plans on the government health insurance marketplace. These plans can have substantial subsidies.

[heavyset_go]

> These plans can have substantial subsidies.

ACA subsidies disappear once you make $50k or more a year.

[c-cube]

Obama has not been in power in more than four years. If you want to blame someone, look towards those who refuse to vaccinate, die in the hospital after accruing huge medical bills that they don't pay.

[devoutsalsa]

USA employers started offering health insurance during World War 2 as a means of enticing women to come to work, as there weren’t enough men to fill the positions. And once that trend started, it simply never stopped.

https://www.npr.org/templates/story/story.php?storyId=114045...

[tallanvor]

It's true that they started offering health insurance during WWII, but it wasn't specifically to entice women into the workforce, rather it was to be competitive when Roosevelt created the Office of Economic Stabilization, which froze wages. Offering health insurance was a way to get around this.

https://www.nytimes.com/2017/09/05/upshot/the-real-reason-th...

[thfuran]

>This would allow me to purchase my own health insurance at rates comparable to what I'm offered at work.

Would it? The employer can still call up an insurer and say "if you can give me a better deal than X, I'll buy insurance for 1,000 people" whereas you have maybe 5 potential customers to bargain with.

[philwelch]

Group health insurance is inherently cheaper than individual health insurance, regardless of any tax incentives.

[NoblePublius]

There is no “tax break.” It’s unlawful for me not to buy health Insurance for my employees (more than 50) and you aren’t allowed to shop the open market if you work for me. Average cost per employee is $1150 this year (up about 11% over last year). Thanks Obama.

[synaesthesisx]

Dude $1150 per employee is literally nothing. That's less than $100/month, per employee, for health insurance.

Individuals should still have an option to choose a plan on the open market if they desire, but they're highly unlikely to find a plan for $100/month.

[NoblePublius]

Sorry, that’s $1150 per month.

[synaesthesisx]

Ouch - that would certainly be a significant cost. Regardless, individuals should always have the option to buy a plan on the market. We really need to decouple health insurance from employment.

[TheRealNGenius]

ah yes privatized healthcare. Spoken like a true American.

https://www.reddit.com/r/PoliticalHumor/comments/u15pwv/univ...

[troupe]

It is not just the tax break that makes it cheaper for corporations to buy insurance. Companies with a lot of employees pay a lot less than individuals because they pool the risk. Back before ACA you used to be able to get in a pool with, for example, other small business owners and pay an amount similar to what companies pay but as an individual. ACA made those plans illegal and insurance that used to cost $500 per month jumped to $1800.

[matwood]

I wasn't aware the ACA made pooling illegal. Awhile back I tried to form a group with small tech companies in my town to do this, but the insurance companies all wanted a larger anchor company. None of the bigger tech companies in town wanted to participate b/c they saw their benefits as a competitive advantage. This was post ACA, and I don't remember anyone mentioning legality.

Small companies get crushed by insurance. Giving employees extra money in their check and telling them to use it on the ACA is probably most effective for all parties at the moment.