Prices, including labor prices, are not determined by costs. There is no indication at all that companies would compensate employees more if they didn't have to pay for their health insurance. What is most likely to happen is that companies will pocket the difference, in the same way they've been pocketing the difference from increased productivity while letting wages become stagnant.

There are a lot of jobs which do not offer benefits, or benefits are offered with no part paid by the employer. These places would not offer raises, but these people would end up with better choices of private plans.

Benefits are a huge burden for companies, especially smaller ones. Coordinating benefits is a seasonal full-time job that someone has to do. I've known of a few smaller family businesses that gave everyone a raise, and told them to get their own health care coverage on healthcare.gov.

Sounds like an excuse to me, and if they're this bitter about paying for benefits, something tells me they'd be just as bitter towards giving substantial raises across the board for, essentially, no reason.

Also as a principle, regulating said free markets for QoL improvements (e.g. min wage, HI, disability, comp, soc sec, etc.) affect all participants - both efficient and destined-to-die businesses alike. If you can't exist through playing by the rules that everyone has set, why are you still in business?

When you start a business there’s an expectation that you’re probably not taking a paycheck from it for a few years while you try to attract customers to provide steady cash flow.

While doing this, you somehow have to find a way to hire people to help you grow.

If it doesn’t work out, the business owner loses everything most likely and will probably be on the hook for the space they were leasing.

Now if you survive and make it past all that, hopefully everything stabilizes and you’re able to run a successful business that can return more to you than you put in…but it’s hard. Very very hard.

This “should that business even exist” stuff comes from not having any idea how hard it really is and how much is really on the line or the ups and downs along the way (which are even harder when you’re trying to make payroll).

If it was easy, everybody would do it.

>> While doing this, you somehow have to find a way to hire people to help you grow.

Where is that expectation coming from? It's fine if it's a side business you're looking to bootstrap or something, or if you have enough seed funding (which can be in the form of your own savings if you're okay risking that) to be revenue negative for a time, but if you have enough funding or revenue to consider hiring people, the first person you should be hiring is yourself.

>> If it doesn’t work out, the business owner loses everything most likely and will probably be on the hook for the space they were leasing.

This is why you create a -business-. A legal entity separate from yourself. An LLC at the minimum. So that your personal liability is (wait for it) limited. If you're doing a sole proprietorship or something, where you'd be on the hook for everything, WTF are you doing hiring people and signing leases?

Owners get pais last, not first. Sure you make enough income to pay yourself first, then you hire. Time passes, there's a bad month or 3, employees still get paid, owners start accumulating loan accounts.

LLC's and other structures are designed to limit downside, but some creditors will end-run this with personal sureties. This is really common with leases, but also other forms of credit. Inexperienced business owners may not push back against these as hard as they should (you can push back, but most starting out don't know that they can...)[1]

Building a business from scratch is hard work, and most fail within 5 years because failing is really really easy, and success requires someone to do a lot of different tasks well, and almost always some "luck" [2] as well.

[1] most bootstrappers try once, and are thus inexperienced. The folk they are dealing with (landlords and suppliers) are very experienced. This imbalance leads to contracts that are very often one sided.

[2] the best luck is advice from an experienced bootstrapper, ideally for free. They can help you avoid the most common mistakes. Of course you'll ignore some of their advice because "experience doesn't work like that".

Creditors and lenders are not fools. They'll often require the owner of an LLC to personally sign for the note.

I think this is only true for a newfangled SF business.

Traditional business gets a bank loan, has a business plan, and pays salaries from the start (including to the owner).

Make no mistake, the only reason a company closes is because they run out of cash. Old-style businesses have been doing that forever. SV businesses do the same when that "next round" fails.

Which leads me to conject that a VC business is just a bootstrapped business, where VCs are the customer...

This assumes that such "more efficient organizations" can even exist. If they are possible, why aren't they already around? Are those "Businesses that cannot afford to retain talent and remain competitive" that you speak of somehow preventing them from existing?

In most markets where efficiency is not achievable, then businesses are not entitled to exist. This is why things such as tax subsidies and other forms of funding are used to bootstrap new markets (e.g. green energy) that have a net social gain.

Reads like maximalist statement with zero clues about the subject.

However if you reject this ideal which is the western worlds baseline, then you really have to provide some info on what framework you are arguing from…

Yes some companies will optimize for profit - some already do that, amazon makes a killing while warehouse staff are low paid. Uber makes everyone a contractor specifically to avoid benefits and so on.

Other companies pay a living wage, and cost a "cost to company" for each employee. These may choose to pay the benefit as cash.

Where I live the tax benefit of health care applies to companies and individuals alike. Some companies have mandatory health cover, others have optional health cover, others have no health cover. Since there is no tax implication it's not hard for prospective employees to compare one with another.

Ultimately, some companies pay low wages, some pay high wages, that's somewhat tangential to health cover or not.

Speculating on what most employers would "most likely do" is, well, just speculation[1]

[1] large companies like amazon known for screwing employees? Yeah, I'm with you there - but I don't think most employers are like that.

The leadership at my employer talks big about how much they care about their employees, and indeed, the vacation and benefits are very good. Yet even in the face of record profits they gave me a 1.5% raise this year, despite the 8.5% inflation. I'll believe that they'd pass benefits package savings onto me when I see it.

I've never seen that happen, ever, in 25+ years of being in the working world in the US. Not saying it never happens, but I've not seen it, and after asking around, no one I know has seen that info.

In Australia minimum wage laws means that Starbucks locations rarely have more than two people on staff - that's just economic forces causing a rational business response.

Firstly companies don't shutter, they downsize. The most vulnerable employees are the first to go, the higher paid ones are typically the most valuable, remain. Owners go last.

Secondly, in my experience, all employees would rather forgoe a raise and keep everyone employed that insist on a raise. We saw this first-hand in 2020. Lockdown brought extreme uncertainty but employees agreed to 50% [1] pay instead of massive job cuts.

Yes it helps that we pay staff well. Yes it helps that they get a bonus in the good years. Yes it helps that we have their interests at heart. Yes it helps that they are skilled and we don't want to lose them.

Yes, over the years some people have become redundant, but there are swings between good times and bad times, and no we don't shutter just because there's a bad time. That's explicitly _not_ how it is supposed to work.

[1] we had a min threshold for 50%, those under got 100%. Also thanks to govt assistance, and our ability to back-pay later, they all ended up "whole".

[2] ps - I agree on the need for a minimum wage. In almost all cases it is too low by a lot. And I agree that if you can't pay minimum wage, then you can't afford an employee.

I've seen workers pidgeon-holed into low stagnant wages too often to accept it as a status quo when the companies employing them are posting profits - in the modern world we too quickly accept the fact that owners are supposed to take out lion's share salaries and profits need to continuously increase. A business can have a healthy existence just making the economic wheels spin and ensuring that employees are well compensated.

We usually set minimum increases based on inflation. Often we do higher. Occasionally we have wage freezes but they are not common. We adapt to conditions and circumstances.

Obviously we are one data point, but I have seen other small companies do the same. Big companies bad behaviour does make the news, good behaviour does not, so while bad actors certainly exist, I don't know if that is the norm, and I don't know if it is more prevalent in the US.

If the company is paying it it’s just a business expense they can deduct from their income.

If only someone had some sort of working template on how this could be done in a cost effective way. I'm sure everyone, regardless of where they fall on the political spectrum, would rally round such an obvious net good in that case.

(I know that bit of sarcasm is a bit of a tangent, it just feels like this whole subthread is missing the obvious)

I think we just skipped over the part that we already know is never going to happen, however much that might be the ideal solution.

If employers are already compensating employees as little as they can get away with then if they stopped compensating via insurance, they'd be required to compensate via salary.

Of course. And the employee negotiates for as much as he can extract from the company. That's how markets work.

If you're a company, unless you were already planning to do some mass layoffs, you're going to give most of them that raise because the alternative is having a bunch of people quit. And if you don't increase your offers for new hires, you probably won't be hiring anyone either.

And yet price stickiness is a thing that exists!

https://www.investopedia.com/terms/p/price_stickiness.asp

This is the problem with a lot of "econ 101" stuff, it makes these big sweeping assumptions like "markets are price-efficient and operate at market-clearance prices" and after spending econ 101 building it all up, econ 102 and 200 and etc etc will spend semesters telling you why it's all crap.

Markets are not price-efficient, real-world prices are very sticky, and that includes the price of labor (actually labor tends to be far stickier than most other products). For example, vanishingly few real-world employers are going to offer automatic raises to cover cost-of-inflation, which is the same mechanism that you would be relying on to increase wages after removing health-care benefits.

A lot of people in retail/food are still making the same $11 or $12 they were hired on at, despite much higher salaries often being paid to new hires (guess the efficient market hypothesis says their on-the-job experience has... negative value?).

Tech is its own little thing, competition for tech labor is much much tighter, of course, but that much is obvious. In the real world, you can already see that labor prices are very very sticky and owners will almost never choose to pass these savings along.

This is false: they would pay a lost less in additional income taxes. Americans overpay for the same services as every other developed country. They are being fleeced.

The company could:

* immediately raise people's salaries

* or hire in more people (which increases demand)

* they could take the extra profit and distribute that to shareholders

* or drop the price of their products and services and pass the savings on to the customer

* or they could make capital investments.

In most cases, I would expect salary prices to increase for labor (even if not immediately) or make people's current salaries more effective in purchasing power.

Also, you forgot the popular option:

* give (bigger) bonuses to their execs

They also had pension plans, but these days, those are rare outside of government jobs. I wouldn't be surprised if companies clawed them back as the threat from unions dwindled.

https://www.latimes.com/archives/la-xpm-2005-may-11-fi-unite....

A 401k is probably better since the company is paying funds directly to your account, IOW they can't underfund it.

That said, Raytheon ended up fucking over their 401k plan. Raytheon matched in company stock and required that 401k owners held the company stock for 3 years once it was put into the plan. It worked great until 2005 when Raytheon's stock dropped to 1/3 of the price on news of gross of mismanagement. Employees couldn't get out of the stock, and were forced to swallow the loss.

So even on a 401k details matter.

They tend to reward long tenures at companies. Even with government sort-of guarantees they have risk of insolvency. And ultimately it's just not your money.

I also really think that congress should forgo the Roth IRA contribution limits for most people. They're arbitrary and limiting.

Also the penalty for large employers is much smaller than the cost of health insurance (50% to 18% depending on individual vs group coverage), assuming that if companies didn't provide health insurance they'd pocket the difference means companies should still pay the fine.

What really matters is how the government policies would change when it's moved from employers to people. The government is likely to pay the costs for low income people, which will also mean their wages are likely not to rise.

[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

Amazingly, fantastically useful.

Employers use a figure called "total compensation" for what it costs them to employ someone. This includes salary and the cost of all the benefits, including all the so-called "employer paid" taxes and benefits. The WSJ ran an article long ago that showed employee productivity matched total compensation, not salary compensation.

Employers certainly do care about the cost. They don't care what percentage of those costs go to employee takehome pay. But offering pre-tax health insurance means the employer can offer less total compensation.

Any economic article that talks about salary instead of total compensation is either ignorant of accounting reality or is trying to mislead.

Even when we talk about redistributing this increase, we mostly talk about redistributing it from the professional-managerial employees, who populate the higher personal income tax brackets, not from the companies themselves (corporate tax) or their owners (wealth tax). If you are right that companies and their owners are pocketing it, then we are looking for it in the wrong places. But it seems like it really is largely going to the PMC.

Without increases in compensation, workers will suddenly have thousands of dollars in new yearly expenses just to maintain coverage, and many will be forced to go without coverage at all.

This wouldn't be a problem, though, if employer-provided healthcare was replaced with a universal healthcare system that most first world nations have had for ages.

I have pretty good insurance, when I started, a few weeks before the end of a year, some of the folks I was working with were bitching about how it didn't cover anything and was expensive (the employee premiums were tiny at the time and are still low).

That’s very much not the case for 99.9% of goods and services.

Prices for labor, i.e. wages, are set by the demand for labor, and workers’ opportunity costs.

That said, depending on the splits, it's much more probable that the cost to "employee salaries" will be less than their typical OOP expenses anyways.

https://www.cnet.com/tech/tech-industry/apple-google-others-...

I personally think a model like this is pretty fair, if somebody is making 50k a year then pulling in 1M annual is pretty silly - but it makes sense to account for that difference with taxation rather than the arbitrary choices of private employers.

Leaders of this country really do not care about the healthcare of its citizens (just look how long people with diabetes have been screwed, how long people have been able to lose literally everything over medical debt, etc.), I can’t imagine leaving things to the individual would be helpful in any manner whatsoever.

Whether my fully burdened cost budget has a line item for health insurance being paid to a 3rd party or to the employee is totally irrelevant. Tax law currently happens to make it much more efficient for me to pay that money to a 3rd party, so that’s where it goes.

The reason I have that line item is due to a combination of market forces and regulation. By no means do I get to choose just not to pay it, if I expect employees to keep working for me, or the government not to shut me down.

It sounds like you’re saying that employers are always trying to hire as many people as possible.

Which would be nonsense, of course.

A bizarrely uncharitable non-takedown, and completely besides the point as well?

If you believe this then what's your explanation for why Google hires a smaller number of expensive engineers, rather than a larger number of cheaper engineers? They could hire 10x if they went for only lower-tier college new-grads!

Obviously a business would not be particularly successful hiring janitors to write code simply because they could pay them less.

Maybe I wasn't searching correctly, but I was recently discussing healthcare and taxes with someone and briefly searched on the Healthcare.gov exchange to look at prices. There were only three PPO plans (where you can freely go to any doctor in network), and all three were HDHPs, all from the same company. There were many HMO plans, some HDHP and others with low deductibles, but often extremely small local networks and limited choice of both PCPs and specialists.

> This makes health insurance cheaper to the employer than to individuals.

One other thing to note in your analysis is that most large employers are not buying any insurance, but actually self-insuring (funding the claims out of their own pool of money). So the employers are actually acting as insurance companies for their workers, rather than simply buying and reselling commercial insurance.

There would be additional considerations beyond taxes in analyzing whether this type of insurance is more economically optimal, for example, the fact that each company has a distinct risk pool which may not be similar to the general population, depending on the company.

FWIW, in California I see like 5 different options for HMO across all of the tiers, a couple are local ones I've never heard of, but there's also some like Kaiser that are fairly large networks.

For comparison, I am on my mom's insurance from Belk Stores which is self-insured, offering three different HDHP PPO plans with a pretty good network and a range of deductibles within the HDHP window. Premiums are pretty bad. My dad worked for a SP500 semiconductor company before retiring, about five years ago they switched to HDHP-only, which just two options both at the higher end of the HDHP range. Premiums were better, but actual coverage not much better.

The cost of paying me is also tax deductible, so they get a 'tax break' by paying me more money.

> This makes health insurance cheaper to the employer than to individuals.

I don't think that's the root. Large insurance companies seem to want to sell to larger companies - groups of people - vs selling insurance to individuals. Selling to a group is where it seems some price reduction happens. And... by and larger, if you're selling insurance to people who are already healthy enough to be working regularly/fulltime, your costs for insuring that 'pool' will be somewhat cheaper than the costs of insuring any random individual.

> they couldn't increase my salary enough for me to purchase the same plan myself

If the cost of my health insurance was deductible from my individual taxes, then the entire market would be turned upside down. There are certain thresholds that need to be met re MAGI (IIRC) before health insurance insurance premiums are deductible by individuals. I'm "self employed" so the entirety of my premiums are tax deductible, but for the average person working a W2 job someplace that doesn't provide health insurance for them, it's not a deductible expense, which is a total sham.

Insurance this past year has paid for like, a couple dozen specialist visits, 6 MRIs, weekly rehab, a reclining desk and a power wheelchair. I maxed out my deductable in February :D

My health would be better if I could go on disability but that pays like, $1K a month and is ridiculously hard to get.

What should be done is entirely decouple it so that health insurance AND medical expenses are above the line deductible - or make none of it such. And then let employees pick whatever they want.

I am not completely sure where you want to go with this argument. But as a Scandinavian I am very much comfortable with the state ensuring my access to health care, knowing I do not ever have to ever have to think about medical costs, health insurance or access to one of the better health care systems in the world for me or my family. We could very much bear the costs of having private health insurance, but its just one less (big) worry...

I do think that production of food is very much a state matter - and unless you knew taxes in the US today go towards ensuring safe and predictable production of food through i.e. agricultural subsidies. I would expect the state to ensure that the country have a viable and thorough plan to ensure food supplies.

Forgive me, but when it comes to my healthcare I want the most choice and control as I can have. I don't want to be stuck with whatever some bureaucrat decides is worth it.

Lastly, people make stupid decisions and they get hurt. They go rock climbing or skydiving, they ride their bikes on busy streets. Why should I shoulder the responsibility for people's poor life choices.

Personally I haven't done that well and could not afford my costs if they weren't pooled with other people. I'm happy that in my case this is publicly funded, so I don't have to deal with profit-maximizing private insurance companies who are at every turn actively trying to find reasons not to cover me.

I'm also glad that people where I'm from who are less fortunate than me don't have to go without needed health care because they aren't able to get good enough jobs. In fact, I care much more about the latter than you or me being able to choose between a bunch of options. And if you're doing so well and that's what you want, private health care is typically still an option even in countries with publicly funded systems.

How much choice and control do you really have by having a private insurance? If you get hit by a car on the street, your kid trips in the stairs, you walk into a wall and crack a rib, the difference between your and mine is that: 1) I don't have to think about what it will cost me 2) I don't have to fully understand every aspect of my insurance agreement in order to understand what I am entitled to 3) I don't have to fight a insurance company if they don't want to pay for it 4) I can just relax, have a beer, and know that I will be taken care of if something happens

You do know how private insurance works right?

Someone makes an insurance company. Then they sit down and figure out the probabilities of things happening to people. They then put a price to join the group. They then divvy up that money to people in the group that have had things happen to them.

With insurance you will always be paying for other peoples "poor life choices"... that's the way it works. Maybe one day it will be your poor life choice (or accident.)

Having state healthcare by default does not necessarily mean a ban on private healthcare. Both can coexist.

Like being born with a certain combination of genes which aren't as healthy a combination as others. Or being hit by a car, and losing a limb. Or being shot in the head by someone and persisting in a vegetative state for years.

Yeah, the nerve of these freeloaders and their 'poor life choices'.

The amount of time we have to spend each year sorting out our healthcare for the entire company is mind blowing. You are totally correct, it becomes a full time job for 3 or 4 weeks for myself and another partner. So much effort and knowledge required for something that isn’t even our core business! And it inevitably causes drama with employees who don’t like some part of the group plans we end up with. Very stressful.

We only offer it as our employees all say that this benefit is really important to them. I didn’t know it was a tax break for us to be honest.

I wish more employees thought like you did. Our average monthly cost per employee is about $500 for a “silver” PPO plan, and about $110 for dental. Average age of our employees is below 30.

I’d gladly pay employees the $610 extra a month just so we don’t have to deal with it and the drama that comes with it. This would actually save us money from the energy wasted dealing with insurance companies. And no one who’s dealt with our insurance plans over the years has had a positive experience. My brother (who worked for my company) cut his chin while out of state. Required 2 stitches, and he just walked to the closest ER to get them. $3500 it ended up costing him, even with our insurance and countless hours fighting the insurance companies too. Didn’t even see a doctor, a nurse did the stitches. It’s a joke.

Other than salaries, health insurance is the largest expense for our business. Think about that at the scale of the entire economy and its mind blowing the wasted energy/effort on this “system”.

I’m originally from Australia. We have “socialized” healthcare there. My brother is back visiting family currently and got an x-ray and ultra sound for $310. The American system is absolutely embarrassing.

Aren't there insurance brokers that provide tools to compare simply. Would a system that allowed employees to vote/order the cover they would like in the plan and then you to adjust the price point until you get matching policies that provides an acceptable level of cover.

Brokers will educate you on specific plan mechanics but will avoid explicit recommendations because they don’t want to take blame for choosing the “wrong plans” for a company.

Each plan is optimized for specific scenarios, e.g. young person with no medical risks or chronic conditions, middle aged person with chronic conditions and established doctor affiliations, so on and so forth. But they aren’t explicitly labeled that way, so people have to figure out what makes sense for them.

If you’re an employer who cares a lot about this process, you basically need to mind read the healthcare needs of each of your employees and offer a menu of options that satisfies their needs, while trying to avoid offering options that nobody should rationally choose.

If you know nothing about health insurance it makes the whole process much harder.

Source: worked in American health insurance for years.

They probably agreed to not layoff Mailchimp employees in the sale, so they make them quit. Purging the sick, tbe pregnant, etc from the company is a way to cut costs, and doing so through some elaborate bureaucratic fuckup avoids government intervention.

I've had multiple open heart surgeries. My medical events are relatively rare (every couple years) and I recently went completely septic for 4 days (started to have multiple organ failure ~3 days from no-return) due to a cascade of underlying issues. I know my medical coverage and it's been critical to my survival for my entire life.

I have NEVER used employer health insurance and anyone with major medical conditions would be foolish to depend on employer coverage in most cases. The offered plans are basically a big deductible with some minor coverage for non-catastrophic, no surgical coverage, nothing chronic. More expensive plans cover more dependents. Gee thx. It's all but useless and I have simply declined it everywhere for the last 25 years to keep the ~25$/mo, as I have paid my own (car payment-sized) platinum level health insurance plan everywhere I've gone (and my wife's). The type of company - Finance, Medical, Marketing, Retail, Consulting (ironically the best I've found), doesn't make much of a difference. Every now and then you find some employer that will "cover your healthcare 100%" which is inevitably code for "cover the plans we choose, which aren't different than anyone else".

This is a similar plan to my last 3 employers, companies of various sizes HQd in either SF or Seattle. If I had "multiple open heart surgeries," it would cost me a max of $3k in a calendar year.

Where are you working that you are not being provided similar plans?

You're in a very fortunate position, but still dependent on the largesse and good fortunes of an employer (or multiple over the years), and when they have no use for your services, you'll be in the same boat as many others.

> I have NEVER used employer health insurance and anyone with major medical conditions would be foolish to depend on employer coverage in most cases. The offered plans are basically a big deductible with some minor coverage for non-catastrophic, no surgical coverage, nothing chronic

Which is just completely untrue unless the best employer you've been with is a regional fast food joint.

2. US healthcare system is incredibly hostile to people trying to pay their own costs and designed to be maximally obscure and confusing. Imagine buying a car where your car dealer, tire manufacturer, window glass manufacturer and upholstery supplier bill you separately. Now imagine when you come to the dealer and ask how much the car would cost, they shrug and tell you you'd know when the bills come, just relax and sign on the dotted line. If you really insist, they could give you an estimate - something between 1K and 100K dollars - but they don't guarantee anything, it's just an estimate. And no, you can't choose the suppliers upfront or know which ones they'd use - this you'd also know only when the bills come. And no, there's no way to know when or how it happens - they bills would just show up one day as a surprise. Sounds like a nice experience? That's how the healthcare system works, day to day.

3. The frustrating part is that most of the people think it's the only way to manage it, and those that don't think that the only way to fix it is to nationalize the whole thing. I mean we can create insanely complex supply chains (think how many people cooperated on making a car? And you still can come to a single place and pay for it with a simple transaction at cost known in advance - magic!) - but somehow healthcare is where it all disappears and figuring out the separation of labor thing becomes the problem of the end user.

Source?

I am seeing 10-K reports showing UHC, Anthem, CVS, Cigna, Humana, Molina, Centene, etc all with profit margins ~5% or less.

Is the claim that executives at one or more of these companies is attempting to bypass ACA regulations (and violating fiduciary duties to their own employer) by overpaying for services to outside entities that the aforementioned executives control?

Seems like a grand conspiracy theory.

They spent 20+ million with this company, how much do you think the execs on the board get paid? No one knows because they're private/for profit and don't have to publish annoying things like a 990.

This is wrong on so many levels.

First, employers get a tax break because compensation expenses are generally deductible as "ordinary and necessary business expenses" required for the employer to be competitive in the labor market.

Second, employer policies are cheaper because the risk pool is cheaper to insure than the individual pool, so the insurers can make the same or more profits despite charging lower premiums.

The combined effect is to make employer-based health insurer significantly cheaper on both a pre-tax and post-tax basis than individual plans. But even without the tax benefit employers would still be incentivized to provide health benefits in a labor-competitive market. For example, many still provide free meals and parties to employees, even though meals are only partially deductible and parties are not deductible at all.

A good corollary in the US is Medicare: everybody over 65 can enroll in Medicare Part A for free, but you can also choose Part B, Part D, and "medigap" coverage, each of which is optional and has a monthly premium.

Maybe not. Businesses have more negotiating power because they're bigger buyers, so they would still have access to more competitive rates. Unless you got together with a lot of people to negotiate together (and this might be a startup opportunity).

On the flip side, the cost my employer pays for my plan is far lower than they would bill me for it on the open market. Last time I looked at the individual market it was amazing how bad even plans for $500-1000 were! They could give me a raise exactly matching what they'd stop paying and I'd still lose out.

Edit to clarify: That's not a "this is cheaper to us after we account for the tax break." That's a "this is the rate it costs us" vs "this is the rate it would cost you" difference.

The negotiation power difference is real. Private market health insurance would need to be well-regulated or we'll all just get screwed even more.

Employers like this because it gives them power over employees and makes it more attractive than being an entrepreneur not just to save money on taxes.

But I agree, healthcare should be provided by the federal govt like in every other advanced nation

In South Korea the healthcare premiums are split between employees and the employers: https://en.m.wikipedia.org/wiki/Healthcare_in_South_Korea They don't have to negotiate group plans and maintaining coverage when switching jobs is pretty seamless.

There has to be a plan if employers stop providing insurance en masse, and I'm not sure it's a good idea to stop getting premiums from the source of personal income entirely. That seems to be a convenient place to get the kind of money that healthcare demands.

Make this similar to gym membership. Let each person decide where to go based on cost and needs. With insurance remaining their for catastrophic events only.

Intuit did provide health insurance to these employees and take the tax break. There was a small gap between when the previous MailChimp insurance ended and MailChimp employees were placed on the Intuit offered health insurance. Once on the Intuit provided plan coverage was retroactive to the date the MailChimp plan ended. The employees could submit claims to the Intuit plan for reimbursement of medical expenses paid during the gap. The issue is that floating the money during this time could significantly impact the finances of the employee or that the employee may not have the funds to do so at all.

ACA subsidies disappear once you make $50k or more a year.

https://www.npr.org/templates/story/story.php?storyId=114045...

https://www.nytimes.com/2017/09/05/upshot/the-real-reason-th...

Would it? The employer can still call up an insurer and say "if you can give me a better deal than X, I'll buy insurance for 1,000 people" whereas you have maybe 5 potential customers to bargain with.

Individuals should still have an option to choose a plan on the open market if they desire, but they're highly unlikely to find a plan for $100/month.

https://www.reddit.com/r/PoliticalHumor/comments/u15pwv/univ...

Small companies get crushed by insurance. Giving employees extra money in their check and telling them to use it on the ACA is probably most effective for all parties at the moment.