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In the 1950s, employee benefits became non-taxable. Prior to that, employees would get health insurance as individuals and their plans would never be tied to a
by kgantchev 6y ago
In the 1950s, employee benefits became non-taxable. Prior to that, employees would get health insurance as individuals and their plans would never be tied to a particular employer, kinda like how it currently works in Switzerland. So that one law drove our entire health insurance system to where it is now.
- deleted 6y ago[deleted]
- will_pseudonym 6y agoIt actually started due to WWII. > Once America became embroiled in World War II, there was great concern that rampant inflation would threaten America's military effort and undermine its domestic economy. The concern was valid, as Americans had witnessed what inflation had done to war-torn Germany, devastating its economy and giving rise to Hitler's regime. > To combat inflation, the 1942 Stabilization Act was passed. Designed to limit employers' freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead. > Suddenly, employers were in the health insurance business. Because health benefits could be considered part of compensation but did not count as income, workers did not have to pay income tax or payroll taxes on those benefits. [0] You can also read about this in a 2017 NY Times article [1] [0] https://www.griffinbenefits.com/blog/history-of-employer-sponsored-healthcare https://www.griffinbenefits.com/blog/history-of-employer-spo... [1] https://web.archive.org/web/20210109190532/https://www.nytimes.com/2017/09/05/upshot/the-real-reason-the-us-has-employer-sponsored-health-insurance.html https://web.archive.org/web/20210109190532/https://www.nytim...