Company Paid Health Insurance is Part of Your Salary
People don’t understand that they are already personally paying for their “employer-paid” insurance. Employers buy health insurance with part of the salary earned by the employee. Employees don’t buy this insurance directly so (1) it doesn’t attach to them when they change jobs, and (2) they can’t shop around to select the insurance they really want.
From Bill Quick who says
It’s hard to get people to understand this, but there really is no such thing as a free lunch. Those “free” benefits are paid for by you with your much reduced salary.
I’ve been trying to hammer this point home to so many people only to get deer-in-the-headlight stares that I’m beginning to think America has been brainwashed to the point of no return. This is the same truth behind the fact that corporations do not pay taxes - i.e. any fines for trying to be productive taxes applied to a business will simply be reflected in an increase of cost of their goods or services. In this case, any ‘free’ healthcare services you receive are actually paid for by not offering you the money in the first place.
There is no difference in the following two scenarios
Mr. Smith, we’d like to hire you on at a weekly salary of $1000 and you get what would amount to $400 a month insurance policy
And
Mr. Smith, we’d like to hire you on at a weekly salary of $1100 with no benefits
Employers consider this when hiring. For every dollar they spend on your salary / pay, they have to consider the other dollar they’re going to have to pay in insurance, unemployment benefits, social security, and a whole host of ‘taxes’ to have the privilege of trying to make a living. You don’t see the behind the scenes number crunching, but it lowers what your employer is willing to pay you.
Now, there is the truth that your employer can ostensibly get a better rate on insurance than you could as an individual, but this is because they can purchase out of state where as you cannot. Companies can buy insurance policies that have a MUCH larger pool and thus can assume the risk. Remove that arbitrary rule (which really is nothing more than a way for the gov’t to suck more life out of the economy via taxation) and you would be able to join large pools on your own, not only reducing the costs, but getting plans that better suit YOUR needs vs. the cheapest plan possible that covers hardly anything YOU need because it’s geared toward an average.
My wife and kids are on a HDHP HSA. I love it. It costs me money out of pocket, but the high deductible means I’m willing to assume more risk and thus keep the monthly costs down. It’s more like real insurance. If the SHTF and we have a true medical emergency, we’re going to have to eat the first couple of thousand dollars but then the insurance will cover the rest. And as the HAS allows us to squirrel away money, guess who already has that deductible covered?
The other beautiful part of that plan is that when I lost my job, my wife & kids never lost coverage. I would love to be able to purchase my own insurance, however I’m ALREADY paying for insurance because my employer is taking it out of my paycheck before I even get the choice.
See the linked article above for details.