Many health proposals call for employers and the government to share responsibility for paying health care. Employers are urged to take charge in providing cover for their employees because of the advantages that come with it. If employers take this initiative they will create a level playing field in the economy by ensuring equity to all employees in all sectors. This move will go long ways in ensuring employees are satisfied with their jobs. This paper will analyze the reasons behind employers paying for their employees’ health insurance.
Times are gone when it was considered a risk when an employee was provided with health insurance and later lose their jobs. This is no longer the case; sustainability has changed since the passage of the health benefit bill in the consolidated omnibus budget reconciliation Act. Life has been made easier, where employees and their families could not afford health cover now they are made available by their employers (Valletta, 1996). The coverage which is offered, has no limits it caters for employees, their spouses, their former spouses and their dependent children. In addition to that, employees are privileged to select the type of cover which will suit them. However, the coverage could be lost due to certain events such as, death of covered employee, termination in the hours of a covered employee for reasons such as gross misconduct, divorce or legal separation from covered employee (Valletta, 1996).
There several reasons why employers are required to contribute to the cost coverage which is mostly known as employer responsibility requirement. They include the following: by employers paying for the cover, employees get motivated and thus increase the yield and improve on their performance. Pay for the cover will lower employees’ budded, and they will be able to advance in their living status. It is less expensive for employees to be covered with the employer than individual coverage because job based health coverage is priced fairly than the individual coverage. If employers maintain their responsibilities by not dropping the health coverage; this will help keep the dollars in the health care system (Gabel, 2007).
For those companies that are doing well financially, it will be advantageous to them to provide health coverage. This move will help attract dedicated employees hence gaining an advantage over their competitor. This responsibility is left to those charged with governance because providing health coverage is entirely up to them.
Most of the Americans receive their health insurance coverage through their workplace. According to the standard economic theory, of the availability of employer providing health cover mainly focuses on workers demand. According to the theory, workers are willing to work in an environment where health insurance is provided to them and in return they should offer reduced wage by the cost of insurance. It is true that, employees prefer their wages to be offset to cover that coverage than purchasing health insurance on their own (Buchmueller, 2000).
Employers benefit from providing health insurance by attracting employees who anticipate a long term employment relationships. When employees are, provided with health insurance it is likely that, the service and productivity will improve since no one will be out of duty because of health problems. In addition to that, workers in good jobs are happier and more productive, all this benefits will result to the company increasing their yield and maximizing their profits (Buchmueller, 2000).
It is important for employers to take up the obligation and cover their employees since this will reduce the cost rather than individual purchasing for the cover. This will be made possible by pooling the resources together thus reducing administrative expenses. These costs advantage are very significant especially for large organizations. Acquiring a cover for the employees has the additional benefit especially to those who are expensive to cover, such as the elderly and people with disability. These people faced with special illness are covered under special programs mostly the Medicaid (Ceniceros, 2000). The government is also appreciating what employers are doing, and they have introduced a close under federal law. If the employers pay for the health insurance, the organization will benefit from the being exempted in paying some of its taxes. This has increased the rate at which employers are responding to the issue.
In conclusion, it is reasonable to suspect the turn of the 21st century employers has made a conclusion that health insurance coverage is very important because growth is realized in the organizations. Providing insurance cover to the employees is very beneficial to the firm because it will help maintain its competitiveness in the market. In addition to that, it is likely to do very well over its competitors because employees are well mutated by not incurring other extra costs in maintaining their health. Employers are urged to understand the importance of motivating their employees. From the recent research, it was highlighted that, employees are most likely to drop out of employment if the cost of purchasing insurance is incurred by him only. This is made expensive by the policy taxes introduced and other statutory deductions. It is important for employers to reduce this burden in order to make health care affordable and accessible to all.
Valletta, R.(1996). The effects of employer providing health insurance on worker mobility. Industrial and labor Relations Review 49.
Gabel, S.(2007). Trend in employment based health insurance, Colorado Health Care Foundation, in Beaver Creek, CO.
Buchmueller, T.(2000). The business care for employers providing health benefits: California Health Care Foundation.
Ceniceros, R.(2000). Productivity Losses Far More Costly Than Benefits. Business Insurance no 3.