Does employer-sponsored health coverage make sense?

Guest Column:
Ted Almon
It was recently announced that the “large employer mandate” provision of the Affordable Care Act has been postponed for a year, until 2015. More

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OP-ED / LETTERS TO THE EDITOR

Does employer-sponsored health coverage make sense?

Guest Column:
Ted Almon
Posted 7/22/13

It was recently announced that the “large employer mandate” provision of the Affordable Care Act has been postponed for a year, until 2015.

As a policy matter nationally, the delay in requiring coverage among employers with more than 50 full-time workers may not be a big deal. Most companies this size provide a health benefit, and the rules mandating how the rest would have to contribute to the cost of providing such coverage were admittedly complex, so getting it right is a reasonable concern in the delay.

It is important for example that employers not be allowed to game the requirement through any number of clever, even devious methods, such as limiting workers’ hours to avoid covered status. Workers will still be required to have coverage starting in 2014 under the individual mandate, and the health-insurance exchanges intended to facilitate buying individual and small-group coverage will be in place by then.

At the end of the day though, it will still be a complex game, but one goal of reform should certainly be simplification. This raises again the whole issue of whether providing health coverage through one’s employment, an arrangement unique to this country, really makes any sense.

Health insurance as an “employee benefit” arose originally from an anomaly in the free market. After World War II the government had imposed wage and price controls. Companies seeking to attract employees in the industrial boom that followed the war started offering coverage as a perk, one that has stayed with us for a number of reasons.

Government would otherwise have to raise taxes to provide such coverage, although one could argue that the tax exemption for the benefit already is an enormous tax subsidy. But perhaps even more significant has been the rise of the commercial health-insurance industry itself, with all of the attendant political clout you might expect.

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