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I’ve long thought the distinction was dumb. Everyone should just be treated as a freelancer. Id rather pay for my own health care thank you very much. There’s

I’ve long thought the distinction was dumb. Everyone should just be treated as a freelancer. Id rather pay for my own health care thank you very much. There’s practically no advantage to having health care, retirement, etc dictated by your employer and plenty of downsides.

marcinzm 7y ago
>There’s practically no advantage to having health care Only if you're young and healthy and have no pre-existing conditions. Otherwise, enjoy the fun of paying massive premiums for shitty care because you no longer have the group rate from your employer.
- kgwxd 7y ago
  If those employer group rate things didn't exist, the whole system would be different. The insurance companies would still want peoples money, they'd just come up with some other arbitrary way for people to group up or do away with the grouping all together (which is how it should be).
  - marcinzm 7y ago
    Why would they, if they know someone will cost them a lot of money then what incentive do they have to ever insure them for non-exorbitant amounts if they can avoid it? Every other form of insurance would either not insure them or charge them massive fees (home owners, renters, life, car, etc.). Group rates are a hack if anything and insurance companies have no incentive to make less money by having their own version of it. edit: To explain further. Let's say insurance company A has a group plan and B insures people individually. A is then forced to charge half their clients more than B as the average rate is identical. Thus it's in those people's interests to move to company B and pay less. Now those left on A's plan have even more average risk (as all the low risk people have gone to B) and the rate needs to go up. Rinse and repeat until A has no clients or is bankrupt.
    - dd36 7y ago
      Arbitrary grouping should be outlawed. It should be based on their entire pool of business. Law of large numbers means some will always be sick. They should make money by preventing sickness not by directly or indirectly increasing the cost of care.
    - randyrand 7y ago
      What you're calling insurance (insuring people who have pre-existing conditions, or are known to be very expensive) is not insurance. That's just plain old welfare/socialism. I'm fine with welfare, but keep it out of insurnace. Let insurace be for insurance (i.e. known but unpredictable risks), and welfare be for welfare.
    - AnthonyMouse 7y ago
      > To explain further. Let's say insurance company A has a group plan and B insures people individually. A is then forced to charge half their clients more than B as the average rate is identical. Thus it's in those people's interests to move to company B and pay less. Now those left on A's plan have even more average risk (as all the low risk people have gone to B) and the rate needs to go up. Rinse and repeat until A has no clients or is bankrupt. The problem is the same thing happens with employers. Employer A provides high quality health insurance, so everyone with a preexisting condition takes a job at employer A while employer B out-competes them by providing less/no insurance and picking up all the healthy employees who choose them because they can pay better wages. Then it's employer A rather than insurance company A that goes out of business and the remaining employers are the ones that don't provide health insurance. You can try to get out of that by requiring all employers to provide health insurance, but it really has nothing to do with the employers. It would be superior to require all individuals to buy health insurance instead, but people seem to hate that. The other option is to require insurance not to deny coverage or set rates based on the existence of a condition if the individual had insurance coverage at the time when the condition became known. Then as long as you were carrying insurance you're covered, which most people will then want to do for exactly that reason, which would thereby prevent the death spiral. But if you don't want to buy insurance, well, then you don't have insurance. See what happens if you wait to buy fire insurance until after your house is already on fire.
  - newnewpdro 7y ago
    Or it'd just be socialized like public education and the postal service...
- mdorazio 7y ago
  Also if you don't have a mortgage or kids. Freelancing is great when you're young, single, and have few long-term obligations. When you get older, well there's a reason mid-life people working mediocre jobs at large corporations don't up and quit for freelance life en masse.
- phkahler 7y ago
  You cut off the sentence you quoted. Its undesirable to have "health insurance" tied to your employer.
  - r00fus 7y ago
    That’d be true if we had a functioning free market. It’s one of the things that Obamacare tried to do with the state exchanges, with varying success.
- deleted 7y ago
  [deleted]
Areading314 7y ago
Employers get to deduct health care premiums from pre-tax, whereas freelancers have to pay for premiums out of their after-tax income. It can make a fairly big difference if your marginal tax rate is high (which it probably is in CA).
- willchang 7y ago
  The opposite is true. If you are a freelancer, healthcare premiums are an above-the-line deduction, which practically has the same effect as a business expense. This is better than a regular deduction because you get it even if you don't itemize deductions. See https://turbotax.intuit.com/tax-tips/home-ownership/deducting-health-insurance-premiums-if-youre-self-employed/L6bRhLaVE https://turbotax.intuit.com/tax-tips/home-ownership/deductin...
  - aaomidi 7y ago
    The problem is you literally can't get all the benefits that a big company can negotiate.
    - randyrand 7y ago
      Why not use a website like groupon?
    - manigandham 7y ago
      That's more of an issue with the healthcare industry and insurance companies.
dredmorbius 7y ago
https://en.wikipedia.org/wiki/Theory_of_the_firm https://en.wikipedia.org/wiki/Theory_of_the_firm
zebraflask 7y ago
Depends quite a bit on how much the "freelancing" brings in, doesn't it? There's a potential self-contradiction to this view that I'd like to tease out. Say you're "freelancing" and doing well enough that you can afford to pay not only the extra self-employment tax, but also to pay full market rate out of pocket for every single benefit that a stable employer would provide. How many clients would you need to make that happen? In my experience, the most successful high-end freelancers - and your comment implies to me, at least, freelancing at a skilled professional level - have a small rotation, or maybe only even one, major repeat client(s). The dynamic very quickly shifts to one of where the freelancer might as well, for all practical purposes, be an employee of those clients or that one major client, right? Except paying more for everything an employer otherwise would pay for.
deleted 7y ago
[deleted]
r00fus 7y ago
You only think healthcare is overrated until you need it and find out there is no free market there and you owe 5 or 6 figures for something you thought was routine. There’s a reason that medical bills are the #1 cause of bankruptcies in the US.
ajdlinux 7y ago
As someone who is not an at-will employee, being a non-American who lives somewhere with at least vaguely sensible labour laws, I'm very glad to have some security of employment provided for by law, which I would not get as a freelancer or contractor.

marcinzm 7y ago

>There’s practically no advantage to having health care Only if you're young and healthy and have no pre-existing conditions. Otherwise, enjoy the fun of paying massive premiums for shitty care because you no longer have the group rate from your employer.

kgwxd 7y ago
If those employer group rate things didn't exist, the whole system would be different. The insurance companies would still want peoples money, they'd just come up with some other arbitrary way for people to group up or do away with the grouping all together (which is how it should be).
- marcinzm 7y ago
  Why would they, if they know someone will cost them a lot of money then what incentive do they have to ever insure them for non-exorbitant amounts if they can avoid it? Every other form of insurance would either not insure them or charge them massive fees (home owners, renters, life, car, etc.). Group rates are a hack if anything and insurance companies have no incentive to make less money by having their own version of it. edit: To explain further. Let's say insurance company A has a group plan and B insures people individually. A is then forced to charge half their clients more than B as the average rate is identical. Thus it's in those people's interests to move to company B and pay less. Now those left on A's plan have even more average risk (as all the low risk people have gone to B) and the rate needs to go up. Rinse and repeat until A has no clients or is bankrupt.
  - dd36 7y ago
    Arbitrary grouping should be outlawed. It should be based on their entire pool of business. Law of large numbers means some will always be sick. They should make money by preventing sickness not by directly or indirectly increasing the cost of care.
  - randyrand 7y ago
    What you're calling insurance (insuring people who have pre-existing conditions, or are known to be very expensive) is not insurance. That's just plain old welfare/socialism. I'm fine with welfare, but keep it out of insurnace. Let insurace be for insurance (i.e. known but unpredictable risks), and welfare be for welfare.
  - AnthonyMouse 7y ago
    > To explain further. Let's say insurance company A has a group plan and B insures people individually. A is then forced to charge half their clients more than B as the average rate is identical. Thus it's in those people's interests to move to company B and pay less. Now those left on A's plan have even more average risk (as all the low risk people have gone to B) and the rate needs to go up. Rinse and repeat until A has no clients or is bankrupt. The problem is the same thing happens with employers. Employer A provides high quality health insurance, so everyone with a preexisting condition takes a job at employer A while employer B out-competes them by providing less/no insurance and picking up all the healthy employees who choose them because they can pay better wages. Then it's employer A rather than insurance company A that goes out of business and the remaining employers are the ones that don't provide health insurance. You can try to get out of that by requiring all employers to provide health insurance, but it really has nothing to do with the employers. It would be superior to require all individuals to buy health insurance instead, but people seem to hate that. The other option is to require insurance not to deny coverage or set rates based on the existence of a condition if the individual had insurance coverage at the time when the condition became known. Then as long as you were carrying insurance you're covered, which most people will then want to do for exactly that reason, which would thereby prevent the death spiral. But if you don't want to buy insurance, well, then you don't have insurance. See what happens if you wait to buy fire insurance until after your house is already on fire.
- newnewpdro 7y ago
  Or it'd just be socialized like public education and the postal service...
mdorazio 7y ago
Also if you don't have a mortgage or kids. Freelancing is great when you're young, single, and have few long-term obligations. When you get older, well there's a reason mid-life people working mediocre jobs at large corporations don't up and quit for freelance life en masse.
phkahler 7y ago
You cut off the sentence you quoted. Its undesirable to have "health insurance" tied to your employer.
- r00fus 7y ago
  That’d be true if we had a functioning free market. It’s one of the things that Obamacare tried to do with the state exchanges, with varying success.
deleted 7y ago
[deleted]

Areading314 7y ago

Employers get to deduct health care premiums from pre-tax, whereas freelancers have to pay for premiums out of their after-tax income. It can make a fairly big difference if your marginal tax rate is high (which it probably is in CA).

willchang 7y ago
The opposite is true. If you are a freelancer, healthcare premiums are an above-the-line deduction, which practically has the same effect as a business expense. This is better than a regular deduction because you get it even if you don't itemize deductions. See https://turbotax.intuit.com/tax-tips/home-ownership/deducting-health-insurance-premiums-if-youre-self-employed/L6bRhLaVE https://turbotax.intuit.com/tax-tips/home-ownership/deductin...
- aaomidi 7y ago
  The problem is you literally can't get all the benefits that a big company can negotiate.
  - randyrand 7y ago
    Why not use a website like groupon?
  - manigandham 7y ago
    That's more of an issue with the healthcare industry and insurance companies.

dredmorbius 7y ago

https://en.wikipedia.org/wiki/Theory_of_the_firm https://en.wikipedia.org/wiki/Theory_of_the_firm

zebraflask 7y ago

Depends quite a bit on how much the "freelancing" brings in, doesn't it? There's a potential self-contradiction to this view that I'd like to tease out. Say you're "freelancing" and doing well enough that you can afford to pay not only the extra self-employment tax, but also to pay full market rate out of pocket for every single benefit that a stable employer would provide. How many clients would you need to make that happen? In my experience, the most successful high-end freelancers - and your comment implies to me, at least, freelancing at a skilled professional level - have a small rotation, or maybe only even one, major repeat client(s). The dynamic very quickly shifts to one of where the freelancer might as well, for all practical purposes, be an employee of those clients or that one major client, right? Except paying more for everything an employer otherwise would pay for.

deleted 7y ago

[deleted]

r00fus 7y ago

You only think healthcare is overrated until you need it and find out there is no free market there and you owe 5 or 6 figures for something you thought was routine. There’s a reason that medical bills are the #1 cause of bankruptcies in the US.

ajdlinux 7y ago

As someone who is not an at-will employee, being a non-American who lives somewhere with at least vaguely sensible labour laws, I'm very glad to have some security of employment provided for by law, which I would not get as a freelancer or contractor.