A
Good Job, Or Health Insurance?
 Should companies continue to provide health insurance to
their employees?
Most people are fortunate enough to have health insurance
coverage through their employment with a particular company.
A typical family policy cost about $129.00 per month in
1999. By 2007, the same policy increased by 70% to $273.00 per
month.
The increase has mainly been caused by the soaring costs of
premiums. And, with these consistent hikes, it is highly
unlikely that companies will be in a position to continue to
pay their employee's insurance premiums.
Those employees hardest hit are the lower-income
workforces. A typical family policy offered by employers costs
roughly $12,100.00 per year. The average share that an
employee makes on this company-offered policy is approximately
$3,200.00 per year; for a family salary of $40,000.00 per
year, that's about 8% of their pre-tax income, not including
deductibles or co-payments!
According to a recently released survey, the nation's
largest companies continue to move away from traditional
pension plans, offering new employees defined accounts like
401(k)'s only.
Companies that have made this change require employees to play
a major role in funding their retirement savings.
Other companies have been testing hybrid types of benefit
plans (cash benefit plan), whereby a guaranteed benefit is
offered but long-time employees are generally provided with
less in accrued benefits than the traditional pension program.
In fact, there are differing views on which direction the
country should move:
- Should people buy their own policies, armed with tax
deductions or credits, through the private market?
- Should insurance be purchased, with some oversight by the
Government, through exchanges (regardless of where or if
person works, or has medical condition)?
It is criticized that the current system grants tax breaks
to corporations offering insurance to their employees, whilst
enabling those workers receiving coverage to receive tax-free
benefits.
Unfortunately, at the same time, if you are a member of the
low-income workforce not only do you not get insurance through
your job, you are also not entitled to a tax break.
Some of the plans are likely to encourage employers to drop
coverage altogether as they don't want to lose all, or a
percentage, of their "write-off insurance as a business
expense" ability.
Perhaps, an alternative could be that employers drop insurance
coverage for their employees but offer them salaries high
enough to compensate for the fact that they need to purchase
their own insurance.
If Exchanges were created, and health insurance was available
that was a combination of affordable coverage, and a
government-subsidized program, then maybe people with medical
conditions would not find it difficult to get insurance
coverage; insurers would not fear that people only wait until
the eleventh hour when they really need the health care
coverage to purchase it, and people need not suffer
unnecessarily because they do not feel they have any insurance
options.
Either way, with more companies declining to offer their
employees insurance, problems are sure to increase with the
number of people struggling to get coverage; especially those
with existing health problems.
The employment market is changing; jobs are more flexible,
and in some cases more short-term. New ideas , and major
effort needs to be generated in order to revamp the system.
Our working world has been altered from that of our parents
and grandparents.
Federal Legislation is inevitable, though it is not likely
to happen soon; at least not until after the next Presidential
election in November 2008.
"Your" Money Matters, by Carl
Hampton
From the Author of "From
Credit Despair To Credit Millionaire."
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