Employer Insurance Benefits

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Employers in the United States provide compensation to workers who carry-out duties that benefit a business. Compensation is made up of wages and fringe benefits. Fringe benefits consist of health insurance and retirement benefits. Historically, employers and employees split the cost share of employer sponsored health insurance. Employers, often with the heavier burden, offer health insurance benefits to their employees at a pre-taxed amount. Employers have a vested interest in keeping a healthy workforce and employees are concerned with receiving comprehensive coverage for themselves and their families. Employees who have health insurance are more likely to receive treatment for acute and chronic illnesses, thus reducing time away from work. …show more content…
Employers may see the removel of a tax exemption counter-productive and they will be causous of regulatory changes.
Limited Consumer Choices Employer-paid insurance coverage limits choices of insurances for many people, causes some people to fear changing jobs, and forces some people out of the labor force (Phelps, 2010, p. 73). Traditionally, employers offer employees a few different health insurnace plans. Plans range from higher coverage to lower coverage and one somewhere in the middle. Insurance Plans with a copayment offer more secruity to the employee rather than a high deductable plan. However, the high deductiable plans are increasing in populatity in recent years due to health care reform laws. Employees are required to either pick the best health insurance plan offered or forgo coverage through their employer. Forgoing coverage does not mean the employee will see an increase in wages; in turn, allows the employer to finanically
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Employers receive a tax exemption for offering health insurance and it is considered a benefit. The tax exemption has been in place since World War II and has not significantly changed. Employers deal with an administrative burden to offer health insurance, however, it is used to attract skilled labor. Health insurance is also factored into an employee’s total compensation. Phelps (2010) argues that removing the tax exemption will not impact employers negatively. Employers will most likely continue to offer group coverage or offer an increase in wages for employees who do not take coverage. Employees will have the options to obtain insurance through the health exchanges and those plans may be less rich (p 82). An employer sponsored health insurance program limits the employee’s choice for types of coverage. Some plans are richer than others and some plans cover health services that will never be utilized by the consumer. Employees are usually pooled together to establish an experience and premium rating. If the employee population tends to be unhealthy and high utilizers, employees and employers will have to pay a higher premium. Offering health insurance to employees is in best interest of the employer. Employers need to maintain a healthy

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