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Employment Based Group Health Insurance

The Good Old Days

It has been said that almost anyone who worked for General Motors could have had every organ in their body replaced and it would not have cost them a dime.

This may well have been the case of yesteryear, but since the turn of the century, in addition to a lethargic US economy, part of the burden imposed on employers of late has been the outrageous increase in the cost of group health insurance plans in California which has ballooned to an unprecedented 78% higher cost. Wage growth on the other hand has been 19% and may well be the straw that breaks the back of many a camel.

Individual And Group Health Insurance California

However, an interesting dynamic is that the cost to employers in regard to a Californian group health insurance plan has risen more sharply in regard to employees in lower paying positions than higher paid positions on a percentage of payroll basis, but on a cost per hour basis the cost to the employer is greater for higher paid employees.

Employers who provide health insurance in California for small business to their staff through their employment agreements, are regulated by the US Department of Labor Employee Benefits Security Administration (EBSA), which is also a great California group health insurance resource.

Among other things, employers cannot exclude an employee from a Californian business health insurance plan merely because the employee or one of their family members has an illness that may potentially attract great cost. Additionally, if there are at least 20 employees in the plan, COBRA continuation benefits should be applied to ensure continuation of small business health insurance cover should the employee change their place of employment.

The simple gist of ever encroaching legislation upon the affairs of employers, is that an employer however justified in a desire to keep the cost of affordable Californian group health insurance to employees to a minimum, is unable to control the lifestyle of the employee and certainly can't discriminate against one.

Much depends on the size of an employer's business, and to qualify as a multi state employer, an employer must retain at least 51 employees in each state, and for classification as a national employer, the employer needs to maintain at least 3 000 employees.Otherwise, the employer will be seeking small group health insurance in California.

Health Benefits Not Taxable Income

Arguably one of the most pertinent issues at hand, considering the approaching federal election, is the $200 billion of federal revenue that would be released if the legislature were to choose to revert to a private and individual based health insurance policy rather than entertaining the employment based policies that have gained such credence with tradition. Currently, employees receiving higher incomes along with their health insurance are receiving what is effectively a disproportionate tax exemption.

Both sides of politics seem to prefer a system where employees are still able to achieve economies of scale by utilizing their Californian company group health insurance bargaining power, but one that treats taxation with equity. If this new reform were to be adopted, the increased wages that were sought to be avoided with the introduction of health care benefits to employees in the Second World War, will undoubtedly make their presence felt on balance sheets.

 

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