Dark chocolate caramel bars from Trader Joe’s. A slow day at work. Not much traffic going to work. Hearing that W2 forms will now show the cost of health insurance plans.
Okay, I’m a nerd.
As workers open their W-2 forms, many will see a new box with information on the total cost of employer-sponsored health insurance coverage. To some, it will be a surprise, perhaps even a shock.
Workers often have little idea how much they and their employers are paying for coverage. In many cases, economists say, workers give up cash compensation to get and keep health benefits.
The disclosures, required by the 2010 health care law, are meant to make workers more cost-conscious. Health benefits are still tax-free. But labor unions and employer groups say it could be easier to tax them in the future, now that employers must report their value to the government.
This is probably the only thing about ObamaCare that I like. Most people have no idea how much their health insurance costs, and cannot fathom how much less money their families have because of these gold-plated plans. Let’s consider a very average American family: household of four, income of $50,000 annually, and a $15,000 employer-provided health insurance plan.
Now, that family probably hates the idea of medical plans that have been proven to reduce costs: high deductibles, catastrophic coverage, and a lot of copayments (or payments that aren’t provided by the insurer at all). That family is clipping coupons, budgeting like crazy, and trying to save up for college for the kids – how on earth, they rightly think, can they afford an extra $500 a year for physician’s visits, deductibles of up to $10,000 in a year, or 20% of radiology costs?
Except those costs would be very easy for that family to cover if $15,000 of their yearly compensation weren’t already being funneled into gold-plated health insurance. High deductible plans and HSAs save money for both employers and patients; that can mean a higher salary, and a HSA paired with a high-deductible health care plan. (See here and here.) Ultimately, until people understand what money they are not receiving in salary due to the push for super-comprehensive health care coverage, or even how much money could be available for different types of health care coverage, we’re not going to be able to bring costs down.