3 ms·

i can see both sides of the public/private healthcare debate but tying healthcare to employment is just incredibly stupid

lotsofpulp 3y ago
Technically, it is giving employers and employees a tax break if the employer buys the health insurance and sufficiently subsidizes it to incentivize sufficient employees to opt into the subsidized health insurance such that it passes the non discrimination testing. Roughly worth at least couple thousand dollars per year for individuals and quite a few thousand dollars per year for families. Basically, a way to give bigger/better funded businesses an advantage over smaller businesses who cannot afford all that employment overhead, especially HR paperwork. Plus it helps obfuscate labor prices so labor sellers have a harder time shopping around for a better offer. Retiree healthcare coverage is beyond stupid though, I would value it at zero as an employee unless it was the federal government offering it. I don’t think there are any protections for it either, so the employer holds all the cards. I would prefer if all these tax advantages were nixed from employers and offered directly to all individuals, if that.
- ghaff 3y ago
  My dad had some retirement healthcare through an employer. As I recall, it wasn't especially cheap and then, to his surprise, it turned out there was a cap. So basically was a pretty lousy deal. I agree with the broader point. There are historical reasons in the US for good health insurance benefits being so tied to, mostly, large employers. But it's just bad policy.
- phpisthebest 3y ago
  People need to understand the historical significance of why these things came into being. Especially since we are on the verge of WWIII on multiple fronts. History should not repeat itself if we find ourselfs in a world war again WWII price controls are directly responsible for Employer Benefit plans, it was illegal to raise wages, but it was not illegal to offer employee's health care, at the time this was direct health care, companies were employing nurses, doctors, etc that would not only see the employee but their entire family often free or very low rates. This morphed over time into the employer insurance model we have today.
  - lotsofpulp 3y ago
    WW2 ended 80 years ago, that is plenty of time for Congress to change the rules if it were so inclined. The fact that they don’t even want to level the playing field on this specific issue, which is already overall tilted towards big business and the rich, speaks volumes.
grecy 3y ago
From the employer’s perspective it’s not stupid at all. It ties people to a job, even when it sucks.
- phpisthebest 3y ago
  I can assure you if given the choice employers would stop offering health insurance to employee's, it is one of the larges increased in employment costs, and has a HUGE unpredictable factor given more and more companies are opting for direct payment (meaning they pay the costs of all health expenses directly)
shoo 3y ago
Decoupling health insurance and retirement investment plans from one's employer reduces friction for individuals selling their labor to switch jobs without worrying that it is going to blow up some other facet of their lives. How it works here in Australia: there's a public health system (~15% of federal government budget). Individuals or families can also purchase varying degrees of private health cover, if they so wish. Health insurance isn't coupled to employment. There's no standard or expectation that employers directly provide health cover to employees as part of the deal of being an employee. Similarly, choices for how to invest for retirement are decoupled from employment. 11% of gross wages must be paid into a "superannuation" fund, a special kind of tax-advantaged investment fund. The employee has the choice of which superannuation fund they want to use, and can elect to switch between funds. There is a marketplace of private health insurers and superannuation (retirement investment) funds. Both the private health insurance sector and the superannuation sector are regulated, which reduces the potential for the degree of criminality and grift. Competition is essential, but regulation is also essential and in the public benefit. Large companies may choose to set up and offer their own proprietary superannuation funds to their employees, but employees have the freedom to ignore this and choose a different externally managed fund. E.g. LiarsGriftersThievesMountebanks LLC might offer their employees the option of directing their superannuation contributions to the proprietary LGTM retirement fund, which invests employees funds in bonded whisky barrel scams run by parties related to the directors, and charges 2% p.a. management fees, but employees have the freedom to ignore this deal and use some other super fund. There are giant "industry funds" that historically were set up by trade unions & only open to people working in a specific industry -- they're often operating at a large enough scale to provide good investment returns, have low fees, and are operated as not-for-profits.

lotsofpulp 3y ago

Technically, it is giving employers and employees a tax break if the employer buys the health insurance and sufficiently subsidizes it to incentivize sufficient employees to opt into the subsidized health insurance such that it passes the non discrimination testing. Roughly worth at least couple thousand dollars per year for individuals and quite a few thousand dollars per year for families. Basically, a way to give bigger/better funded businesses an advantage over smaller businesses who cannot afford all that employment overhead, especially HR paperwork. Plus it helps obfuscate labor prices so labor sellers have a harder time shopping around for a better offer. Retiree healthcare coverage is beyond stupid though, I would value it at zero as an employee unless it was the federal government offering it. I don’t think there are any protections for it either, so the employer holds all the cards. I would prefer if all these tax advantages were nixed from employers and offered directly to all individuals, if that.

ghaff 3y ago
My dad had some retirement healthcare through an employer. As I recall, it wasn't especially cheap and then, to his surprise, it turned out there was a cap. So basically was a pretty lousy deal. I agree with the broader point. There are historical reasons in the US for good health insurance benefits being so tied to, mostly, large employers. But it's just bad policy.
phpisthebest 3y ago
People need to understand the historical significance of why these things came into being. Especially since we are on the verge of WWIII on multiple fronts. History should not repeat itself if we find ourselfs in a world war again WWII price controls are directly responsible for Employer Benefit plans, it was illegal to raise wages, but it was not illegal to offer employee's health care, at the time this was direct health care, companies were employing nurses, doctors, etc that would not only see the employee but their entire family often free or very low rates. This morphed over time into the employer insurance model we have today.
- lotsofpulp 3y ago
  WW2 ended 80 years ago, that is plenty of time for Congress to change the rules if it were so inclined. The fact that they don’t even want to level the playing field on this specific issue, which is already overall tilted towards big business and the rich, speaks volumes.

grecy 3y ago

From the employer’s perspective it’s not stupid at all. It ties people to a job, even when it sucks.

phpisthebest 3y ago
I can assure you if given the choice employers would stop offering health insurance to employee's, it is one of the larges increased in employment costs, and has a HUGE unpredictable factor given more and more companies are opting for direct payment (meaning they pay the costs of all health expenses directly)

shoo 3y ago

Decoupling health insurance and retirement investment plans from one's employer reduces friction for individuals selling their labor to switch jobs without worrying that it is going to blow up some other facet of their lives. How it works here in Australia: there's a public health system (~15% of federal government budget). Individuals or families can also purchase varying degrees of private health cover, if they so wish. Health insurance isn't coupled to employment. There's no standard or expectation that employers directly provide health cover to employees as part of the deal of being an employee. Similarly, choices for how to invest for retirement are decoupled from employment. 11% of gross wages must be paid into a "superannuation" fund, a special kind of tax-advantaged investment fund. The employee has the choice of which superannuation fund they want to use, and can elect to switch between funds. There is a marketplace of private health insurers and superannuation (retirement investment) funds. Both the private health insurance sector and the superannuation sector are regulated, which reduces the potential for the degree of criminality and grift. Competition is essential, but regulation is also essential and in the public benefit. Large companies may choose to set up and offer their own proprietary superannuation funds to their employees, but employees have the freedom to ignore this and choose a different externally managed fund. E.g. LiarsGriftersThievesMountebanks LLC might offer their employees the option of directing their superannuation contributions to the proprietary LGTM retirement fund, which invests employees funds in bonded whisky barrel scams run by parties related to the directors, and charges 2% p.a. management fees, but employees have the freedom to ignore this deal and use some other super fund. There are giant "industry funds" that historically were set up by trade unions & only open to people working in a specific industry -- they're often operating at a large enough scale to provide good investment returns, have low fees, and are operated as not-for-profits.