Employers Shouldn’t Pay Health Benefits

Nov 06, 2003

By George Anderson

The current labor unrest in the grocery industry has focused the media’s attention on the issue of health coverage. Associates represented by the United Food and Commercial Workers
Union are seeking to keep or reduce the premiums paid for health benefits while the chains that employ them argue they are “benefiting” themselves right out of business.

In his On the Contrary column in this past Sunday’s New York Times, Daniel Akst argues that instead of employees asking for employers to pay medical benefits, they
should be looking to scrap the entire employer-financed system.

Mr. Akst says there are numerous instances which point out the failure of employer-financed health care and the need for something new. For one, the author writes, “It makes
it difficult or sometimes even impossible for people to change jobs, not only damping economic efficiency but reducing the competition for labor and, therefore, reducing wages.”

The current system “excludes the unemployed, the self-employed and low-skilled workers. And it can shortchange single people, whose employers effectively pay higher wages to
workers with families when providing dependent coverage.”

Perhaps the greatest sin of the employer-financed system is that costs continue to spiral up, in part, because it “obscures who is paying what, ” writes Mr. Akst.

Moderator’s Comment: Is it time to scrap the employer-financed health benefits system? What is a workable alternative? [George
Anderson – Moderator

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