Tuesday, March 3, 2015

From Employer-Based Health Insurance to Individual Ownership Without a ‘Pay Cut for Millions of Workers’

My 1/30/15 post, The Not-So-Suttle ObamaCare Extortion, highlighted comments I posted regarding the New Jersey Star-Ledger’s editorial, Republican Govs rethink stiff-arm of ObamaCare, in which I advocated transition from employer-based health insurance to individual-owner insurance. In response to my post, a correspondent wrote:

“you're asking for a pay cut for millions of workers, insurance is part of the total compensation package . . .”

I replied:

Half right. No government program can be abruptly ended. It must be phased out equitably. Insurance is a part of the employee’s compensation. No worker should get a single dollar in pay cuts. Previously, I addressed this issue on my blog:

“[B]usinesses and other third parties like unions . . . should be allowed to simply deposit whatever they are currently spending to insure their employees’ into [the employees’] own self-directed, personal tax-free health savings accounts. Individuals and families can then go forth and purchase insurance directly from insurers competing for their business. This would also alleviate a host of other problems by making health insurance portable like auto, life, and homeowners insurance, which people don’t lose when leaving a job. [Emphasis added. Rick Ungar does a nice job of explaining why health benefits are earned as part of the employees compensation, not funded by the employer.]”

No employer should be allowed a windfall at employee expense. As part of the transition, I recommend that every employer that offers health insurance should be required to give independent accounting to its employees exactly how much it is spending on employee health coverage. This would protect employees from employer fraud, and employers from frivolous lawsuits claiming fraud. Then, employees can choose rationally without fear of any back-door pay cut. Once an employer moves to employee-owned accounts, the health insurance accounts can become part of the normal compensation agreements, and altered according to voluntary agreements between employer and employee.

Ending third-party-payer health insurance needn't be a big deal.

Related Reading:

How About ObamaCare’s Victims?

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