And yet they do, despite the cost. Admittedly, they strictly limit it to close family, but every single company that offers health insurance offers it to non-employees.
They do for two reasons, one current, and one historical. The employer premiums are tax-deductible. Which means in effect they are being subsidized by the Federal government. So the employer can offer a bennie worth, say, $1000 at an net outlay of $800.
The historical reason is two-fold. In the heyday of unions, one of the biggest things unions fought for was employer-provided (or at least employer-subsidized) health insurance. Those benefits were won through a lot of industrial action AKA strikes, etc. Later non-union employees clamored for these same benefits.
Separately, during WW-II there were emergency wage controls placed by the US government to prevent businesses competing for scarce labor from bidding up the price of that labor. Since businesses were prohibited for competing on wages, they began to compete on benefits that were, for whatever reason, not controlled.
Nowadays all that is such ancient history that employer-linked and employer-subsidized insurance is a cultural expectation. Businesses now offer it because it’s common enough that any business not offering it would be hard pressed to recruit workers versus their competitors who did offer it.
So instead now businesses are “competing” to stop offering it in gradual and hidden manners. By slowly decreasing the share of premiums they pay while increasing the employees’ share, by outsourcing employment to 3rd party operators, by favoring no-benefits contractors over full-benefits full time employees, by favoring no-benefits part timers over full-benefits full-time employees, by moving production to more desperate locations, by breaking unions, and by designing employee-lite business models that need fewer workers in general.
Should an employee with a single child get a bonus each year over the quiverful employee who is pumping out another sprog every damn year, to balance out the lesser impact on their insurance rates?
No, the employer shouldn’t be involved either way in family matters.
And, in fact, if you are a “large group” business (i.e., you have 50 or more full-time employees), you are now legally obligated to offer health insurance to your full-time employees; if the business doesn’t do so, they are assessed an additional tax by the Feds. However, this is a relatively recent development, as it’s a part of the Affordable Care Act.
The idea that you can bring ‘fairness’ into employee pay and benefits is not workable. There are just way too many differences between peoole to be able to calculate any kind of ‘fairness’.
For example, if both spouses are professionals and have their own health insurance through their jobs, the insurance company for one spouse will be on the hook for less money than if only one spouse had insurance. People with children cost more than people without children. People in good health and genetics are less expensive than people with pre-existing conditions. And the list goes on, and on.
But another reason why you can’t extend your health care to friends and family is that it would break the entire model. One of the things that lowers health insurance for employees is that the insurance company can assume that as a group the cost will be averaged out, and they don’t have to worry about selection bias (only buying insurance if you are high risk.) If you let employees add friends optionally, not only are you covering more people, but you are opening the door for very sick people to seek out opportunities for riding on someone else’s insurance.
And of course, Tanstaafl. When you offer new benefits, the price goes up. Employees will pay that price, either through increased health care benefit costs or a lower salary or lower wage increases over time as compensation shifts to the benefit instead of cash. There is no option where the company ‘just pays for it’ with no cost to the employee.
Most do ( I have heard of employers who don’t contribute anything toward premiums for dependents.) But they aren’t doing it out of he goodness of their hearts, even pre ACA - they are doing it because for those companies it makes sense. If they don’t conform to cultural expectations and provide coverage for certain dependents* , people will choose to work for other employers that do provide/contribute or will only take a job at a company that doesn’t provide insurance for dependents if it pays substantially more that one that does provide employer-paid coverage.
But there isn’t that sort of cultural expectation that a company allow you to cover your brother and/or his three kids on your company-provided insurance and therefore nobody is going to turn down a job because they don’t.
And as far as “fair” goes . that’s often a good way to make sure a benefit goes away for everyone rather than extending it to everyone. If a school , for example gets enough complaints that employees’ children get free tuition and that’s not fair to employees without children , the result will be that no one gets free tuition, not that childless employees will be given the equivalent in a cash payment. Too many complaints that married people with children benefit the most from employer-paid insurance and single, childless people should be paid more to compensate and more employers will only cover the employee and not dependents. ( They must offer coverage to dependents but are not required to pay for it.)
* spouse, possibly domestic partners, children (adopted, step, children of domestic partners)
Yup, the majority of the costs are covered by the employer. But other attempts to expand consumer protections in health care have cost more money. Eliminating the 1 million dollar lifetime cap on insurance cost more money but we did it anyway. Some reforms will cost more but are worth it. The new law passed in 2022 that tried to eliminate balance billing and out of network charges for emergency care will cost more, but its also worth it.
I don’t assume employer sponsored health insurance is cheaper than it actually is. But lets say I had a 58 year old father who was unemployed, why can’t I add him? I can go out tomorrow and marry a 58 year old man or woman, and then put them on my health insurance. Why is it limited to people you have a romantic relationship with? Why can’t I pick the plan option for 2 adults and pick the 2nd adult myself, rather than having it be a romantic partner? Why can’t I pay the partner premium, but pick my 27 year old nephew who just got kicked off his parents plan for being too old?
Also my understanding is that people with the most expensive health problems are already on public assistance. The elderly are on medicare and the disabled are on medicaid. So the pool of people aged 18-64 are going to be relatively healthy, just people who need the security of insurance.
My reason for starting this thread is wondering what role it could have in lowering rates of uninsurance or underinsurance. Would it reduce the rates by 5-10 million or so? Who knows. The government could always bump up the tax breaks for companies that buy insurance to cover the extra cost. The American health care system is a mess, I was wondering if an idea like this would put a small dent in the high rates of uninsured or underinsured.
In addition, the permanently disabled, as well as those with certain diseases (such as ALS and end-stage kidney disease) may qualify for Medicare (not Medicaid), even if they are under are age 65.
I have conducted a number of focus groups with uninsured individuals, as part of my job. Many of them, while not being permanently disabled, do suffer from chronic conditions which often require extensive medical care and meds to treat effectively; they aren’t “disabled enough” to qualify for Medicare or Medicaid (and don’t make so little money that they qualify for Medicaid due to income alone), but can’t afford the medical care that they really need, because they can’t afford to buy their own insurance.
I think perhaps you do. I’m looking at our church’s proposed budget for 2023. We get our health insurance through the synod, so the pool is several thousand people. We currently have two employees for whom we pay the employer’s share of insurance.
60-year old administrative assistant, our share is $11,172
41-year old pastor, plus her two children, our share is $19,900
That’s an employer’s share of $31,000 for two adults and two children. It’s a platinum level policy, so it’s good coverage, but not top of the line.
It’s not limited to a “romantic relationship” it’s limited to members of a household. Believe me, our pastor would love to figure out a way to cover her 22-year old nephew, who’s living with her and the family while attending the seminary, but who will pay for it?
I miswrote. The policies are silver level, not platinum.
Ultimately, it’s hard to game employer health plans this way. Employers watch those expenses closely, they know what they’re spending, not just on health but in total employee compensation. When they budget, they have an amount they want to spend on employee compensation, if you jack up the health care baseline by opening enrollment up to friends and family, the companies will bring it back down again by reducing how much of a share they pay, or by changing to a lower cost plan, or by offering fewer raises / bonuses.
Maybe the question would be: If you were able to add, essentially, anyone to you employer’s coverage BY PAYING THE FULL PREMIUM for that person, what would be the downside? Assumedly, the employer has negotiated a better price (for the level of coverage) than the person would be able to negotiate on their own. Adding one more person to that pool at the cost doesn’t seem to harm the employer (no cost to them and their pool to use for negotiating just got bigger), and it wouldn’t seem to harm the insurance company (other than possibly cannibalizing the sale to the individual on the open market). As long as the “extra” folks added are fairly representative of the established risk pool profile, I’m not sure where the problem would be.
Two issues I can see - the first is insurance companies will have to somehow change the structure of group policies. Right now, there is individual, sometimes “individual plus one” * and family coverage, and there’s no actual limit can how many people can be covered under a family plan but there’s sort of a practical one - there might be one employee with a spouse and ten kids (covering 11 people) but most will be covering no more than five people , and many will just cover two or three. That might change if everyone can add a person ( or multiple people) - maybe everyone already getting family coverage will add an uninsured friend or relative.( or two, if that’s allowed) The insurance company isn’t going to want to cover a lot of additional people for the same premium. There are two ways to solve this - one is for the insurance companies to get rid of the single "family " price all together , and charge more for a family of four than for a family of three and so on. The other is to charge “family and friends” the full price for individual coverage. The problem with that is that a lot of times it won’t be useful - the COBRA price for the least expensive insurance provider at my employer is $714 per month for individual coverage and the most expensive is $1300 per month.
* Might be self and partner, might be self and one kid, but I’ve never seen one that charged different prices for self/partner/one kid vs self/two kids.
That’s the key. The people added are going to be an out-of-work sibling with diabetes or cancer, and sick parent not yet eligible for Medicare. They most likely are going to have higher costs than average. So premiums will have to rise.
Possibly so, or they may just be friends or adult children that work in industries that don’t offer healthcare. Or, friends that are self-employed, etc. I think part of the thing here is that the REAL risk pool for the insurance company is all of the insured across all their customers, not just the insured at one particular client, so the risk may be limited.
Except that the health insurance which many large companies now offer to their employees is what’s called “self-funded” insurance – i.e., the risk pool is only the company’s employees (and their dependents), and not the broader risk pool from a health insurance company. Such employers may contract with a health insurance company, but that insurer only serves to provide the network of healthcare providers, and process claims.
The second cite below claims that 65% of employees covered by group (employer-based) health insurance in 2022, primarily those at larger companies and organizations, are in a self-funded plan.
Yes, this.
The small business I used to work for was regularly audited by their health insurer, in order to make sure all covered employees were actively employed by the company.
Assuming the newly covered person (or the employee) would be responsible for the full cost of insurance, I doubt it would be much cheaper than an equivalent Obama-care policy. Why can’t they just get one of those?
Expecting the employer to pay part of it seems unreasonable to me.
My limited experience with using COBRA to continue my employer-based coverage from a former employer, then buying ACA coverage myself on the Marketplace, was that the prices were similar, for relatively comparable coverage.
I think that the point which the OP may have been trying to make was that many uninsured people can’t afford the cost of buying their own health insurance; if that’s the case, then having to pay the full cost, COBRA-style, to be on a friend’s employer-based coverage wouldn’t help much, if at all.