11 ms·

Why not just get rid of the connection between employer and benefits? Employer pays cash, tax system allow people to manage roth/health/etc accounts based on ca

Why not just get rid of the connection between employer and benefits? Employer pays cash, tax system allow people to manage roth/health/etc accounts based on caps and percentages of earned income. If the free market was supposed to handle the distortion of employer benefit programs, then every employee would need to monitor their employer's yearly benefit negotiations such that 10-20% of them would be giving notice on the basis of any negative benefit change. That isn't happening.

wizzwizz4 6y ago
Ah, but that would be socialism. Sure, many other countries are doing it, and it's working quite well, but it's socialism, and we all know that socialism is bad, so this must be bad.
- john_moscow 6y ago
  Socialism creates another bunch of perverse incentives. If you let a central system manage everyone's funds without competing against dozens of other parallel systems, the management's incentive would be to appropriate as much of the funds as possible as management expenses, as long as they won't be called out and fired/jailed. In the current climate, they would create numerous equity and social justice committees, making sure that everyone gets a personalized pat on the back and 10% of the population will get a small bonus, while 50% of the funds will be spent on the friends of the management sitting in the committees. Anyone trying to call out the corruption will be immediately called racist/sexist by the media, and the economic state of an Average Joe will continue declining at even faster pace.
  - AlexandrB 6y ago
    > If you let a central system manage everyone's funds without competing against dozens of other parallel systems, the management's incentive would be to appropriate as much of the funds as possible as management expenses. How is this different than the current US situation across multiple industries, especially in the medical field? Except that in the case of socialism you can actually vote the leadership out while under the current oligarchy your only recourse is to complain on Twitter.
    - john_moscow 6y ago
      >How is this different than the current US situation across multiple industries, especially in the medical field? The current mess with the medical field happens because the hospitals can charge you whatever they think you can afford to pay. You can't compare quotes, pick a reasonable bidder and pay what you were quoted for. Sure, each case is unique and sometimes there are unforeseen circumstances, but currently the majority of out-of-the-network medical billing is just outright extortion. And, of course, it's done in the name of a great cause. "We are doing it out of necessity to pay for those poor folks that cannot afford healthcare". Except, most of this money is landing in the pockets of administrators [0]. >Except that in the case of socialism you can actually vote the leadership out while under the current oligarchy your only recourse is to complain on Twitter. In the current situation you could vote for someone that would offer to bring more transparency and competition to medical billing. Except, you won't get a chance because people benefiting from the current system and people owning mainstream media play golf together and intend doing it for years to come. [0] https://www.athenahealth.com/knowledge-hub/practice-management/expert-forum-rise-and-rise-healthcare-administrator https://www.athenahealth.com/knowledge-hub/practice-manageme...
    - spamizbad 6y ago
      That's completely unfair: In addition to Twitter US capitalism also gives you the option of GoFundMe. You can utilize both at the same time too!
  - nobody9999 6y ago
    >In the current climate, they would create numerous equity and social justice committees, making sure that everyone gets a personalized pat on the back and 10% of the population will get a small bonus, while 50% of the funds will be spent on the friends of the management sitting in the committees. Huh? We currently have a "single payer" health insurance system in the United States. It's called Medicare[0]. And the administrative costs of that system are ~17 times less (~2% for Medicare and ~34% for private insurers[2]) than that of the administrative costs of private insurers[1]. As such, I'm not really sure how you're assessing this. I'd add that administrative expenses for other national healthcare systems are also much lower (Canada ~17%[2]) than private insurers. Please provide examples and data for your assertions. I'd certainly like to see such data and information, as it doesn't comport with the data and analyses I've seen. [0] https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare https://www.medicare.gov/what-medicare-covers/your-medicare-... [1] https://www.politifact.com/factchecks/2017/sep/20/bernie-s/comparing-administrative-costs-private-insurance-a/ https://www.politifact.com/factchecks/2017/sep/20/bernie-s/c... [2] https://www.healio.com/news/primary-care/20200106/a-third-of-us-health-care-spending-stems-from-administrative-costs https://www.healio.com/news/primary-care/20200106/a-third-of...
  - kingaillas 6y ago
    >Socialism creates another bunch of perverse incentives And capitalism creates other perverse incentives, such as middlemen all trying to get their cut of various fees, charging rents, building competitive moats, obfuscating the paperwork so you can't even figure out what basic services cost in advance... kind of like the health care system currently in the U.S.
    - imtringued 6y ago
      Capitalism is good at innovation and at providing additional value but basic needs like food, shelter and healthcare are predictable enough that those needs can be met through the government providing a baseline of services.
- creddit 6y ago
  Not only is the snark in your reply annoying and take away any point you wanted to make, but also it's not socialism so it's an even worse take.
  - wizzwizz4 6y ago
    I'm not really familiar with how US politics categorises these things. (If I were, I would've made a funnier joke.) What would you call this, then?
deleted 6y ago
[deleted]
OldHand2018 6y ago
There’s been only garbage replies to your question, which is really unfortunate. In reality, we aren’t that far away from being able to do this. If you are a 1099/gig worker and file your taxes with a schedule C, you’re almost certainly eligible for a SEP-IRA (1). This is way better than a 401k; you can contribute up to 25% of your income (max $57k per year) pretax with all the same investment options as any other retirement plan. Sure, it could be made easier to setup, but it’s been around forever and works. What we need to do is say that if you have an employer who does not provide a [baseline] retirement plan, you are eligible for the SEP-IRA on all income from that employer. The Covid-19 relief legislation established unemployment assistance for 1099/gig workers with federal backing and administered by the states. This should be kept around, improved, and made sustainable (add a line to the Schedule SE for paying the same kind of unemployment taxes that businesses pay on behalf of employees). Obamacare allowed for association-based health plans and the Trump administration approved one of them. I don’t recall the details or the current status, but that’s a start in the right direction. Employers pay a lot of money for health plans and their size allows them to negotiate better deals. We need that leverage outside of employers and plenty of other improvements, but at least we have the basics. This is achievable! (1) https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-establish-a-sep https://www.irs.gov/retirement-plans/retirement-plans-faqs-r...
- dillondoyle 6y ago
  What is the average yearly take home of people working multiple part-time jobs though? Most people live bill to bill, probably more-so those less advantaged. How many would really be able and or willing to save like that? Isn't the more simple answer getting rid of this crazy system and profit incentives by nationalizing healthcare?
  - OldHand2018 6y ago
    There is nothing simple. You just have to accept this. It’s really appealing to create the perfect system, but it is just not going to happen. I’m sorry. It’s not going to happen.
2OEH8eoCRo0 6y ago
This right here. Benefits shouldn't be tied to employer. Pay me more and let me control my money.
- munk-a 6y ago
  If folks are losing their jobs (assuming they don't have a nest egg which the majority of Americans do not have) how will they be better off being personally unable to pay for health care instead of losing access to their employer provided insurance to pay for healthcare? Also - a lot of these benefits are things we'd generally consider "necessary" - if that's the case why would we open the door wider to allowing folks to continue being paid 7.25/hr and now not even have a chance at ever seeing a doctor? Or, if that money is personally controlled is it going to be secured against debt repayment? Will individuals have a guaranteed right to pay for medical care before any paycheck garnishing?
  - nightski 6y ago
    I don't mean to speak for the parent but I'm pretty sure it's implied in this scenario that you'd move to universal health care.
    - munk-a 6y ago
      I don't think so - the implication I read from "Pay me more and let me control my money." was an entirely private individual insurance market. If I misread the comment my apologies.
      - rbanffy 6y ago
        I had the same impression, which is an insane idea. The reason people should have universal healthcare and universal pensions and so on is to use society's size to shield everyone from individual risks.
        nostrademons 6y ago
onetimeusename 6y ago
I would like this. It would simplify how I manage my own finances. For example, my 401(K), healthcare, dental, and insurance plans are all tied into poorly made apps I have to manage through an employee dashboard. On the other hand, my personal finances are pretty easily managed through much better apps and services I selected myself. If I just received cash compensation, I could manage my own finances much more easily.
- nickff 6y ago
  Companies often select benefits providers based on ease-of use for the corporate customer rather than the end user. Shifting the purchasing decision to the end user will change incentives for the benefits providers.
  - munk-a 6y ago
    Unfortunately moving that bargaining to the individual level would also result in a lack of negotiating power. What with forced arbitration and restrictions on class action suits being a thing the legal system can't properly serve a large number of individual bargainers that all individually suffered small damages in a just manner. Collective bargaining comes with a lot of benefits - doing it at the employer level is just extremely unfortunate for jobless persons.
    - nickff 6y ago
      Collective bargaining is most useful when the 'little guy' has few options, or the switching costs are very high. Consumers seem to do well when purchasing other types of insurance, and I think they'd do well to get rid of the principal agent problem (if they can keep the tax benefits). I think the biggest problems with employer-provided benefits come at the 'employment transients' (i.e. the time just after leaving jobs and while getting new ones).
    - lotsofpulp 6y ago
      This might have been true before the internet, but it’s completely unnecessary now that it is trivial to shop and compare prices for insurance and investment funds. There’s tons of near zero cost investment options from Vanguard/Schwab/Fidelity, you can go to healthcare.gov for health insurance, and you can go to term4sale for life insurance, etc, etc. The only difference nowadays is that employers large enough to do non discrimination testing and handle the paperwork have an unfair advantage over small business and individuals by being able to compensate people with tax free benefits, whereas small business and individuals can’t.
aspaceman 6y ago
Because the parent solution is more likely to get through our completely dysfunctional legislature. Perfect is the enemy of good.
dudul 6y ago
The amount paid by an employer for its employees' benefits is much smaller than the sum of what all employees would have to pay for the same benefits if they were to sign up as individuals. Employers (ie a group of employees) go through a broker to get benefits. The broker (ie a group of employers) goes to insurance carriers to get good prices for benefits. There is power in numbers. In principle I completely agree with you, it drives me nuts to change my benefits every time I change my employment, but it would take a while for the "invisible hand" to do its job. If tomorrow, employers start giving employees the cash they spend on benefits, there would be a massive gap in premium that employees would need to cover.
- theptip 6y ago
  This is why we need a public option for health care. There is no reason the price of healthcare should change if you lose/switch your job (you could be buying in to the same insurance plan). It’s an accident of US labor rights history that benefits are so tightly coupled to the employer; most other developed countries don’t do it like this and get more favorable prices for similar coverage quality.
UnpossibleJim 6y ago
That's great until you or someone in your household has a pre-existing condition, then you're hosed. Either you can't find coverage or the coverage you can find is both poor and unaffordable. The way that people with pre-existing conditions get health insurance in a company, as is, is through batch purchase of coverage. This isn't on the table through a single purchase agreement, which is what the great "free market" solution offers. There are places where the free market is fantastic, but emergency services, like the fire department, police services and health care, seem odd places for nongovernmental intervention. Emergency services, foreign relations, trade, taxation and border disputes are what the government signed up for and they seem the least functional at the first two. 60% is a pretty non functional average.
- lotsofpulp 6y ago
  It's been 10+ years since insurers have been required to provide health insurance to anyone that wants it, regardless of pre existing conditions. The only thing ACA compliant health insurance can price health insurance is on age, and even that is set so the oldest person's premiums can only be 3x a 21 year old's premiums. I.e. health insurers are made to force younger and/or healthier people to subsidize older and/or unhealthier people.
shortandsweet 6y ago
You're free to do that. I have life insurance and disability insurance that are not linked to my employer. I haven't pulled the trigger on health insurance because I've heard it's super expensive but maybe I will someday.

wizzwizz4 6y ago

Ah, but that would be socialism. Sure, many other countries are doing it, and it's working quite well, but it's socialism, and we all know that socialism is bad, so this must be bad.

john_moscow 6y ago
Socialism creates another bunch of perverse incentives. If you let a central system manage everyone's funds without competing against dozens of other parallel systems, the management's incentive would be to appropriate as much of the funds as possible as management expenses, as long as they won't be called out and fired/jailed. In the current climate, they would create numerous equity and social justice committees, making sure that everyone gets a personalized pat on the back and 10% of the population will get a small bonus, while 50% of the funds will be spent on the friends of the management sitting in the committees. Anyone trying to call out the corruption will be immediately called racist/sexist by the media, and the economic state of an Average Joe will continue declining at even faster pace.
- AlexandrB 6y ago
  > If you let a central system manage everyone's funds without competing against dozens of other parallel systems, the management's incentive would be to appropriate as much of the funds as possible as management expenses. How is this different than the current US situation across multiple industries, especially in the medical field? Except that in the case of socialism you can actually vote the leadership out while under the current oligarchy your only recourse is to complain on Twitter.
  - john_moscow 6y ago
    >How is this different than the current US situation across multiple industries, especially in the medical field? The current mess with the medical field happens because the hospitals can charge you whatever they think you can afford to pay. You can't compare quotes, pick a reasonable bidder and pay what you were quoted for. Sure, each case is unique and sometimes there are unforeseen circumstances, but currently the majority of out-of-the-network medical billing is just outright extortion. And, of course, it's done in the name of a great cause. "We are doing it out of necessity to pay for those poor folks that cannot afford healthcare". Except, most of this money is landing in the pockets of administrators [0]. >Except that in the case of socialism you can actually vote the leadership out while under the current oligarchy your only recourse is to complain on Twitter. In the current situation you could vote for someone that would offer to bring more transparency and competition to medical billing. Except, you won't get a chance because people benefiting from the current system and people owning mainstream media play golf together and intend doing it for years to come. [0] https://www.athenahealth.com/knowledge-hub/practice-management/expert-forum-rise-and-rise-healthcare-administrator https://www.athenahealth.com/knowledge-hub/practice-manageme...
  - spamizbad 6y ago
    That's completely unfair: In addition to Twitter US capitalism also gives you the option of GoFundMe. You can utilize both at the same time too!
- nobody9999 6y ago
  >In the current climate, they would create numerous equity and social justice committees, making sure that everyone gets a personalized pat on the back and 10% of the population will get a small bonus, while 50% of the funds will be spent on the friends of the management sitting in the committees. Huh? We currently have a "single payer" health insurance system in the United States. It's called Medicare[0]. And the administrative costs of that system are ~17 times less (~2% for Medicare and ~34% for private insurers[2]) than that of the administrative costs of private insurers[1]. As such, I'm not really sure how you're assessing this. I'd add that administrative expenses for other national healthcare systems are also much lower (Canada ~17%[2]) than private insurers. Please provide examples and data for your assertions. I'd certainly like to see such data and information, as it doesn't comport with the data and analyses I've seen. [0] https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare https://www.medicare.gov/what-medicare-covers/your-medicare-... [1] https://www.politifact.com/factchecks/2017/sep/20/bernie-s/comparing-administrative-costs-private-insurance-a/ https://www.politifact.com/factchecks/2017/sep/20/bernie-s/c... [2] https://www.healio.com/news/primary-care/20200106/a-third-of-us-health-care-spending-stems-from-administrative-costs https://www.healio.com/news/primary-care/20200106/a-third-of...
- kingaillas 6y ago
  >Socialism creates another bunch of perverse incentives And capitalism creates other perverse incentives, such as middlemen all trying to get their cut of various fees, charging rents, building competitive moats, obfuscating the paperwork so you can't even figure out what basic services cost in advance... kind of like the health care system currently in the U.S.
  - imtringued 6y ago
    Capitalism is good at innovation and at providing additional value but basic needs like food, shelter and healthcare are predictable enough that those needs can be met through the government providing a baseline of services.
creddit 6y ago
Not only is the snark in your reply annoying and take away any point you wanted to make, but also it's not socialism so it's an even worse take.
- wizzwizz4 6y ago
  I'm not really familiar with how US politics categorises these things. (If I were, I would've made a funnier joke.) What would you call this, then?

deleted 6y ago

[deleted]

OldHand2018 6y ago

There’s been only garbage replies to your question, which is really unfortunate. In reality, we aren’t that far away from being able to do this. If you are a 1099/gig worker and file your taxes with a schedule C, you’re almost certainly eligible for a SEP-IRA (1). This is way better than a 401k; you can contribute up to 25% of your income (max $57k per year) pretax with all the same investment options as any other retirement plan. Sure, it could be made easier to setup, but it’s been around forever and works. What we need to do is say that if you have an employer who does not provide a [baseline] retirement plan, you are eligible for the SEP-IRA on all income from that employer. The Covid-19 relief legislation established unemployment assistance for 1099/gig workers with federal backing and administered by the states. This should be kept around, improved, and made sustainable (add a line to the Schedule SE for paying the same kind of unemployment taxes that businesses pay on behalf of employees). Obamacare allowed for association-based health plans and the Trump administration approved one of them. I don’t recall the details or the current status, but that’s a start in the right direction. Employers pay a lot of money for health plans and their size allows them to negotiate better deals. We need that leverage outside of employers and plenty of other improvements, but at least we have the basics. This is achievable! (1) https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-establish-a-sep https://www.irs.gov/retirement-plans/retirement-plans-faqs-r...

dillondoyle 6y ago
What is the average yearly take home of people working multiple part-time jobs though? Most people live bill to bill, probably more-so those less advantaged. How many would really be able and or willing to save like that? Isn't the more simple answer getting rid of this crazy system and profit incentives by nationalizing healthcare?
- OldHand2018 6y ago
  There is nothing simple. You just have to accept this. It’s really appealing to create the perfect system, but it is just not going to happen. I’m sorry. It’s not going to happen.

2OEH8eoCRo0 6y ago

This right here. Benefits shouldn't be tied to employer. Pay me more and let me control my money.

munk-a 6y ago
If folks are losing their jobs (assuming they don't have a nest egg which the majority of Americans do not have) how will they be better off being personally unable to pay for health care instead of losing access to their employer provided insurance to pay for healthcare? Also - a lot of these benefits are things we'd generally consider "necessary" - if that's the case why would we open the door wider to allowing folks to continue being paid 7.25/hr and now not even have a chance at ever seeing a doctor? Or, if that money is personally controlled is it going to be secured against debt repayment? Will individuals have a guaranteed right to pay for medical care before any paycheck garnishing?
- nightski 6y ago
  I don't mean to speak for the parent but I'm pretty sure it's implied in this scenario that you'd move to universal health care.
  - munk-a 6y ago
    I don't think so - the implication I read from "Pay me more and let me control my money." was an entirely private individual insurance market. If I misread the comment my apologies.
    - rbanffy 6y ago
      I had the same impression, which is an insane idea. The reason people should have universal healthcare and universal pensions and so on is to use society's size to shield everyone from individual risks.
      - nostrademons 6y ago

onetimeusename 6y ago

I would like this. It would simplify how I manage my own finances. For example, my 401(K), healthcare, dental, and insurance plans are all tied into poorly made apps I have to manage through an employee dashboard. On the other hand, my personal finances are pretty easily managed through much better apps and services I selected myself. If I just received cash compensation, I could manage my own finances much more easily.

nickff 6y ago
Companies often select benefits providers based on ease-of use for the corporate customer rather than the end user. Shifting the purchasing decision to the end user will change incentives for the benefits providers.
- munk-a 6y ago
  Unfortunately moving that bargaining to the individual level would also result in a lack of negotiating power. What with forced arbitration and restrictions on class action suits being a thing the legal system can't properly serve a large number of individual bargainers that all individually suffered small damages in a just manner. Collective bargaining comes with a lot of benefits - doing it at the employer level is just extremely unfortunate for jobless persons.
  - nickff 6y ago
    Collective bargaining is most useful when the 'little guy' has few options, or the switching costs are very high. Consumers seem to do well when purchasing other types of insurance, and I think they'd do well to get rid of the principal agent problem (if they can keep the tax benefits). I think the biggest problems with employer-provided benefits come at the 'employment transients' (i.e. the time just after leaving jobs and while getting new ones).
  - lotsofpulp 6y ago
    This might have been true before the internet, but it’s completely unnecessary now that it is trivial to shop and compare prices for insurance and investment funds. There’s tons of near zero cost investment options from Vanguard/Schwab/Fidelity, you can go to healthcare.gov for health insurance, and you can go to term4sale for life insurance, etc, etc. The only difference nowadays is that employers large enough to do non discrimination testing and handle the paperwork have an unfair advantage over small business and individuals by being able to compensate people with tax free benefits, whereas small business and individuals can’t.

aspaceman 6y ago

Because the parent solution is more likely to get through our completely dysfunctional legislature. Perfect is the enemy of good.

dudul 6y ago

The amount paid by an employer for its employees' benefits is much smaller than the sum of what all employees would have to pay for the same benefits if they were to sign up as individuals. Employers (ie a group of employees) go through a broker to get benefits. The broker (ie a group of employers) goes to insurance carriers to get good prices for benefits. There is power in numbers. In principle I completely agree with you, it drives me nuts to change my benefits every time I change my employment, but it would take a while for the "invisible hand" to do its job. If tomorrow, employers start giving employees the cash they spend on benefits, there would be a massive gap in premium that employees would need to cover.

theptip 6y ago
This is why we need a public option for health care. There is no reason the price of healthcare should change if you lose/switch your job (you could be buying in to the same insurance plan). It’s an accident of US labor rights history that benefits are so tightly coupled to the employer; most other developed countries don’t do it like this and get more favorable prices for similar coverage quality.

UnpossibleJim 6y ago

That's great until you or someone in your household has a pre-existing condition, then you're hosed. Either you can't find coverage or the coverage you can find is both poor and unaffordable. The way that people with pre-existing conditions get health insurance in a company, as is, is through batch purchase of coverage. This isn't on the table through a single purchase agreement, which is what the great "free market" solution offers. There are places where the free market is fantastic, but emergency services, like the fire department, police services and health care, seem odd places for nongovernmental intervention. Emergency services, foreign relations, trade, taxation and border disputes are what the government signed up for and they seem the least functional at the first two. 60% is a pretty non functional average.

lotsofpulp 6y ago
It's been 10+ years since insurers have been required to provide health insurance to anyone that wants it, regardless of pre existing conditions. The only thing ACA compliant health insurance can price health insurance is on age, and even that is set so the oldest person's premiums can only be 3x a 21 year old's premiums. I.e. health insurers are made to force younger and/or healthier people to subsidize older and/or unhealthier people.

shortandsweet 6y ago

You're free to do that. I have life insurance and disability insurance that are not linked to my employer. I haven't pulled the trigger on health insurance because I've heard it's super expensive but maybe I will someday.