Yes. If I recall, it goes back to the Great Depression when there were cash shortages (and other issues).

It incentivized employers to compensate with benefits, not cash.

Around the same time, unionization became much more popular, and with it negotiated compensation (more benefits).

These were big issues in the North. In the South, the economy has was still largely rural, and many states provided publicly funded hospitals - so the dynamics were different.

There was a move for employers in to provide health insurance pre Great Depression. That was because larger employers could use their size to negotiate deals with hospitals. So health coverage was worth $individualPrice to an employer, but $negotiatedPrice to the employer.

In general, insurance providers preferred going through employers because employed people are healthier and file fewer claims.

Geico was an acronym for “Government Employees Insurance Corporation” which was a thing because government employees were a pretty safe bunch to insure.

So even back then, many of the dynamics we see now existed: negotiated prices, grouping, etc.