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Regarding the concern about health insurance being tied to an employer, it is important to consider why employers have historically been the source of health in
by em3rgent0rdr 10y ago
Regarding the concern about health insurance being tied to an employer, it is important to consider why employers have historically been the source of health insurance in US. A primary reason is the higher marginal income tax rates, which makes it hard for companies to effectively reward valuable employees with heavily-taxed salaries. So the companies instead resort to providing non-salary benefits such as health insurance. If mid-to-high marginal tax rates weren't so high, then employees would be paid more in salary and could purchase insurance themselves so they aren't "locked-in" to their company for providing essential needs.
- pcvarmint 10y agoHealth insurance became tied to employment in WWII, when the government imposed wage controls. To attract employees while getting around wage controls, fringe benefits were added instead of increased pay. [1] [1] http://www.nber.org/papers/w14839.pdf http://www.nber.org/papers/w14839.pdf
- em3rgent0rdr 10y agoSure that was one of many contributing factors. A couple sentences later that study affirms the point I was making: "Finally, in a landmark 1954 ruling, the Internal Revenue Service clarified an earlier administrative court ruling regarding the income tax status of ESI by exempting such benefits from income taxation and adding this provision to the tax code."