Skip to comments.The Hobby Lobby debate exposes flaws with employer-based health insurance
Posted on 07/03/2014 11:17:44 AM PDT by SeekAndFind
Despite the controversy it has generated, the U.S. Supreme Court ruling in the Hobby Lobby case was rather straightforward.
The Religious Freedom Restoration Act, passed nearly unanimously in 1993 by a Democratic-controlled U.S. Congress and signed into law by President Clinton, set up certain tests to ensure that federal policies do not overly burden the free exercise of religion. And the court's majority ruled that a mandate forcing business owners to purchase insurance coverage for their workers that includes contraception coverage that violates their religious beliefs failed those tests.
Critics of the ruling have framed this protection of religious liberty as an intrusion into women's health. We will continue to fight to preserve women's access to contraceptive coverage and keep bosses out of the examination room, Senate Majority Leader Harry Reid, D-Nev., said in reaction to the ruling.
But the more fundamental question is, why should employers have influence over any workers' health choices in the first place?
The link between employment and health insurance can be traced back to a 1943 ruling by the Internal Revenue Service, later enshrined in the tax code, that allowed coverage to be purchased tax-free for those obtaining it through their employers. As a result, in the decades that followed, there was a surge in the number of businesses offering health insurance as benefit to their workers.
(Excerpt) Read more at washingtonexaminer.com ...
More accurately, the Hobby Lobby “debate” has exposed flaws in government-mandated health insurance.
“More accurately, the Hobby Lobby debate has exposed flaws in government-mandated health insurance.”
Employee funded health care began under union efforts to bypass frozen wages. It separated the payer from the payee and has led to out of control costs.
So how do you put that genie back in the bottle again? End my employer funded healthcare and I'm out hundreds of additional dollars each month. I just had an annual physical which would have cost me upwards of $1100 if I had to pay for it.
I’m not defending employer-funded health care, per-se, but the Hobby Lobby lawsuit would not have been filed if Obamacare had not been forced on us.
RE: I just had an annual physical which would have cost me upwards of $1100 if I had to pay for it.
What if instead of paying for your healthcare, they use that money to INCREASE YOUR SALARY BY THE EQUIVALENT AMOUNT instead?
But why would they do that? It confers no TAX ADVANTAGE to them ( aha, that’s where our tax laws come into the picture ).
Every HL story makes me want to scream “If you don’t like what an employer offers, go somewhere else.”
“So how do you put that genie back in the bottle again?
“End my employer funded healthcare and I’m out hundreds of additional dollars each month. I just had an annual physical which would have cost me upwards of $1100 if I had to pay for it. “
Wouldn’t it be better for the company to compensate you with MONEY and then you could buy your own health insurance?
RE: Wouldnt it be better for the company to compensate you with MONEY and then you could buy your own health insurance?
Yes it would for the individual. However, companies give health insurance I think because it gives them some tax advantage.
The liberal answer to the HB verdict is to dismantle private health insurance plans and force ObamaCare on all of us.
And don’t think that won’t happen. Libs are angry and bitter over this. If they can’t pass laws to get rid of private plans (especially those that opt out of birth control, they’ll sic the IRS on them like they already do with conservative groups.
Why would they do that? If I choose to decline my healthcare coverage today my company does not take what they would have spent on insuring me and add it to my paycheck. It's just a couple of thousand that they don't have to spend.
Why would they do that? My healthcare coverage is part of my overall compensation, as my company loves to tell us in our annual benefit summary. But if I were to decline my healthcare coverage my company does not take what they would have spent and add it to my paycheck. It's just money back in their pocket. So if they were to drop healthcare for everyone, why should we expect our salaries to go up as a result? What is their incentive to do so?
To answer the question you brought up, we have to ask another question and answer it.
Why does your employer offer health insurance? Is it because they care about your health?
NOPE. The primary reason companies offer health insurance today is for recruiting and retention purposes. That is, health insurance is a valuable form of compensation because:
1) It is tax deductible to the business
2) Employees get the benefit 100% tax-free
As a result of this enormous tax advantage, $1 in health benefits may be worth $1.50 - $2.00 in pay to an employee depending on his or her family’s tax bracket.
Additionally, the $1 in health benefits costs the company less than $1 in pay. (Remember, it’s tax deductible to the business so the company does not have to pay payroll taxes!)
So, in that, you can already see the GOVERNMENT creeping into business incentives.
So, when did health insurance become tax deductible to businesses?
Health Insurance Became Tax Deductible in the 1940s.
The history of employers providing workers with health insurance goes back for decades. In the early 1940s, the federal government changed the tax laws to allow businesses to provide health insurance coverage as part of an employee’s compensation package 100% tax-free.
During World War II, workers demanded wage increases that were prohibited by wartime wage and price controls. To grant a concession to labor without violating wage and price controls, Congress exempted employer-sponsored health insurance from wage controls and income taxationin effect allowing off-the-books raises for employees in the form of non-taxable health benefits. This created an enormous tax advantage for employer-sponsored health benefits over health insurance purchased by employees with after-tax dollars (e.g., auto insurance). By the mid-1960s employer-sponsored health benefits were almost universal.
BECAUSE OF THAT, Millions of working Americans believe that the only way they can get health insurance is from their employer.
So, we really need to modify our TAX LAWS so that your healthcare is NOT TIED to your employment ( what if you get laid off or your company goes out of business?).
Obamacare however, is NOT the way to go.
The prime takeaways are:
1. It was caused by federal wage and price controls.
2. The costs to employers and consumers are inflated due to federal and state regulations that do not allow consumers to purchase health insurance in a truly open market.
3. Because consumers are “shielded” from seeing the actual prices of healthcare, they often make less cost effective decisions.
The tax benefits are destroyed by the inefficiencies of our already socialized healthcare economy.
The vast majority of those who have bought health insurance individually through ObamaCare will still have to pay out of their own pockets for medical exams that cost $1,100, since most individual ObamaCare policies have deductibles that are well above $1,100. And the premiums are very expensive, too.
The only reason the vast majority of working Americans aren’t in the predicament of having to buy individual ObamaCare policies is because Obama postponed the Employer Mandate for a year.
That means companies are still paying for their employees’ health insurance. However, if Obama does not postpone the Employer Mandate for another year, many companies will stop covering their workers, and they’ll have to buy their own individual, expensive, high-deductible policies.
Sometime between now and October, Obama will have to decide what to do about the Employer Mandate. If he doesn’t postpone it again, businesses and workers will suffer and be angry right before the November elections.
However, if he DOES postpone it, the people who should be angry — Democrats, especially feminists who were driven hysterical over the Hobby Lobby decision, since another postponement will mean that NO companies at all will have to cover employee contraceptives for another year — will not be angry, at least not in public.
The Democrats didn’t get publicly angry at Obama when he made the first Employer Mandate postponement last year, so they’re not likely to get angry this year either.
Which means that the Employer Mandate will probably never go into effect, and the Hobby Lobby decision will be rendered meaningless.
I’ve paid for my own physical out of my own pocket within the last five years and it didn’t cost nearly $1100 (I believe it was around $200). This included EKG, cholesterol, body fat percentage, and other basic tests.
With your insurance and copay, you probably don’t shop around. When I had to pay out of pocket, I learned how to shop for the best deal in healthcare. You were probably tested for things that you had a 1 in a million chance of getting. So for $1100 you may get more peace of mind. If it’s worth $1100 to you, pay it. Right now, you’re still paying the $1100, just in a round about commie way.
The way you describe it in your post, it doesn’t sound like you believe the physical you got from your company for $1100 was worth $1100 to you.
OK so modify the tax laws and remove the tax advantage to my company. In return they drop healthcare coverage since, as you point out, there is no financial incentive for them to keep offering it. So I'm on my own. If I were to pay for my healthcare myself then my premium would quadruple, assuming I could get it at the same cost my company pays. And even if I can deduct the full amount from my income, the tax deduction would come nowhere near to offsetting the additional premium I'm paying. So I'm still thousands of dollars out of pocket. And I'm supposed to see that as a good thing?
“Why would they do that? If I choose to decline my healthcare coverage today my company does not take what they would have spent on insuring me and add it to my paycheck. It’s just a couple of thousand that they don’t have to spend.”
Sure. You have no option to check off. Wouldn’t be great to have the option of checking off whether you want the money or employee coverage?
This all started when UNIONS were able to bargain for “health care” benefits to circumvent WW2 wage controls.
After “health care” became tied to employment, and severed the link between user and payer, health costs skyrocketed.
Somehow we have to sever this linkage, come up with an income tax system that treats all “health care” payments equally, and force more personal responsibility.
” However, companies give health insurance I think because it gives them some tax advantage.”
They PROVIDE it because ...
1. Years ago congress froze wages
2. Unions bargained for employer paid healthcare since that benefit was not covered by the wage freeze.
3. Companies bargained for the tax deduction.
That leaves poor Joe Smoe to buy his insurance with no tax deduction.
Joe Smoe 0
Find a different bottle. In Ancient Rome, for example, it was considered the responsibility of the landlord to tend to health of his tenants. (If the tenant was sick, it was the landlord who bore the medical expense.) In today's terms, that would mean all modern landlords, and mortgage holders would be responsible for the health of those whose buildings they lease or rent.
I'm not saying this is a better solution -- just a different one.
I actually agree that employer-based insurance does limit a person’s choices. On the other hand, we were mostly happy with our employer-based insurance until the government tried to “fix” it.
Is the government going to force my company to do that? More government intervention?
“Is the government going to force my company to do that? More government intervention? “
Interesting. You refer to the removal of government regulations as government intervention ...