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Why Is Health Insurance Tied to Employment in the US?

Health insurance tied to employment was not always the case in the United States. During World War II, however, labor laws restricted how much businesses could pay their workers. To recruit top talent, an employer would offer health insurance as an employee benefit. The Internal Revenue Service (IRS) also ruled that group insurance premiums were not taxable, making the offer of employee-sponsored medical insurance even more enticing to workers.

More about health benefits:

  • The International Labor Organization reported that, in 2008, 50 countries had universal or near-universal healthcare.

  • As of 2010, self-employed people in the US could deduct the cost of their individual health insurance premiums from their income.

  • Some US states, such as Massachusetts, require residents to purchase health insurance. Residents who fail to do so must pay a tax penalty.

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Discuss this Article

anon301478
Post 3

It sounds like you're saying that salaries "topped out" and companies weren't allowed to go over a certain salary. Doesn't matter tho because the obvious goal was to get around a govt policy. This is just further proof that the govt just messes things up when they get involved in private matters.

anon301064
Post 1

Educative, interesting and refreshingly informative.

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