In 2018, American corporations spent $962 billion on health care, a mammoth sum that should significantly influence the health care system. Despite this leverage, U.S. firms continue to struggle with spiraling costs. From 2013 to 2019, the price of health insurance premiums for corporate family plans grew by 22%, dwarfing the growth in overall inflation (8%) and workers’ earnings (14%) as a percentage of income.
Give Employees Cash to Purchase Their Own Insurance
It’s a way to cut health care costs — without cutting coverage.
December 09, 2020
NICK VEASEY/SCIENCE PHOTO LIBRARY/Getty Images
Summary.
Employers’ and employees’ health care costs continue to skyrocket. A solution is to allow employers to give employees pre-tax cash to purchase their own health insurance. This move, enabled by a newly enacted federal rule, would put competitive pressure on insurers, driving down costs, and leave more cash in employees’ pockets.