Friday, March 31, 2017

Employer-paid Health Insurance

Amid all the talk about changing health insurance and health care in the USA, changing employer-paid (employer-based, employer-provided) health insurance rarely gets attention. One article -- eight years old -- does.

Changing the tax treatment of employer-paid health insurance would be a big improvement in my opinion. Make the cost taxable income to the employee (retirees included). If the employee buys his/her own insurance -- not employer-provided and include family coverage -- make the premium tax-deductible or allow a partial credit, perhaps scaled by income. This would enlarge the individual insurance market (below age 65), make it more competitive, and make consumers more cost-conscious. According to the Kaiser Family Foundation about 49% of the US population has insurance coverage that is wholly or mostly paid for by an employer. As a result most of them have little or no concern about the cost.

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