Wednesday, March 9, 2011

Why Will Companies Keep Offering Health Insurance?

Why Will Companies Keep Offering Health Insurance? Who here believes that if Universal Health Benefits are offered through the US government to all US citizens that companies and employers will continue to offer health insurance benefits to their employees as a payroll/benefits expense. Do you really believe companies will continue to pay such a large amount of overhead when they can simply stop offering those benefits and let the government program take over? What employer in their right mind would keep dishing out $500 a month per employee when the government is begging to take that system over? If you think "Yes", please tell me why.
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Well, some particularly prosperous employers, in businesses that demand certain high-demand skills, would certainly still offer superior health benefits (as well as stock options and multimillion dollar bonuses) to those sorts of employees. Asside from that, though, you could expect most employers to cut costs by eliminating health benefits on the theory that the government will pick it up. Currently, health insurance is a highly desireable benefit, so much so that many people take a specific job /just/ to get health insurance, even if the pay is substantially lower than another job without insurance. There are several reasons. 1) Many people who have 'pre existing conditions' can't get affordable health insurance outside a 'group' plan like that offered by an employer, 2) Many people have lived thier whole lives insured, and virtually panic without insurance, since they simply don't understand how to make health care decisions and manage thier own health care expenses, 3) (and this is a biggie), employer-provided health insurance is automatically deducted, pre-tax. It's not just a 'deduction' (you can deduct a lot of your medical expenses, but it's complicated, and you don't get to deduct all of them), but an off-the-top exclusion. It's income you never have to report, at all.
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