Great question! Employers offer health insurance as a benefit because it is a way to attract and keep good employees. That is why there are benefit packages, paid vacations, and 401ks. If all they had to offer was wages, people would move from job to job even more than they do already. A good insurance and benefit plan can be a great incentive to stay. The companies buy a policy for the employees,they own it, and often pay a significant part of the employees' costs. That is why when you leave a job, the insurance does not go with you - you don't own it, like you would if you had purchased the policy on your own. Any more questions, feel free to contact me, I'm happy to answer! Thanks for asking!
Health insurance became linked to employment during World War 2. There was a freeze on wages, and employers began offering health insurance as a means of differentiating themselves to attract and retain employees.
The health insurance premiums were considered taxable expenses, so offering benefits provided a structural advantage to employers. As premiums costs rose over time employers passed more of the premium costs over to employees. Any contribution towards premiums made by employees are able to be paid using pretax elections, which continued the tax-based structural advantage to employment based benefits.
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The health insurance premiums were considered taxable expenses, so offering benefits provided a structural advantage to employers. As premiums costs rose over time employers passed more of the premium costs over to employees. Any contribution towards premiums made by employees are able to be paid using pretax elections, which continued the tax-based structural advantage to employment based benefits.