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What new or revised public policy/law would make it easier for people to maintain a healthy weight?
Replies
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Theoldguy1 wrote: »
If you are talking about US Federal income taxes, your understanding of business taxes is incorrect.
In simple terms a business's taxable income is based on its revenues less the expenses required to create those revenues, employee costs (compensation) being one of those expenses.
From a business's tax standpoint if a person gets $100k in salary and no other benefits, it's exactly the same as if the person gets $80k in salary and $20k in health insurance, $100k total. In both situations the business's expense for that employee is $100k. There is no additional "write off" for health insurance.
Under current individual tax law, certain benefits (including health care premiums) are not counted as income to the employee so they don't appear on the W-2 (although you will get a supplemental, information only form, the number escapes me now that shows the value of employee provided health insurance).
But payroll taxes, which are 7.65% for the employer as well as the employee are based on salary and not total compensation. So they may save 7.65% on the 20k in benefits costs as they don't have to pay matching payroll taxes for that portion of compensation.
Therefore, there is some tax incentive to offer benefits.
If it still makes sense or not is a whole additional issue. But Income Tax is not the only tax an employer (or an employee as we are reminded by many) pays. So there may still be incentives to offer fringe benefits instead of paying a higher salary.2 -
I just want people to have the freedom to decide for themselves. I don't want politicians deciding how best to buy votes with taxpayer money by suggesting they are the arbiters of the greater good.
That freedom would include each person deciding and choosing to contribute to helping one another as they, and not politicians see fit.
From your first post it seemed like you wanted only private insurance or no insurance at all. No employer-based, no gov't supplied or subsidized, no Medicare-type options. That would lead to a burden on people with health conditions, choice or no (and no, the vast majority of medical need is not due to bad choices). So how do you deal with that?
I think magnus's take was pretty fair given the post.
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No, but it would likely affect future raises, since health insurance is part of compensation. That's why the current system is screwed up. Employers understand that health insurance costs = compensation, but most employees don't.
At my firm, gov't taking responsibility for health care would result in higher salaries/bonuses. I know that's not true everywhere, but this is my particular first hand experience.
I agree that viewing health insurance as the employer's responsibility is problematic and also agree that it would be beneficial to allow for the option of higher wages in place of providing insurance as an employee benefit.
However, I dont believe that making health insurance a government institution is the answer.
I'd much rather see it turned over to the free market and allow insurance companies to compete for my business through better coverages and lower costs. Give independent agencies the opportunity to promote different plans and companies based on my needs much like personal and commercial casualty and liability insurance is handled now.
Force CIGNA and Blue Cross to fight over me and find ways to better serve me so that I choose their company. Let them find ways to make my coverage more affordable or more comprehensive while remaining profitable.
Open the doors for new companies to innovate new ways of offering coverage, similar to what Root is doing with car insurance (moving from the demographic model to a model which measures actual individual risks).
Turning the health insurance industry over to government control would stifle the kinds of innovation that the free market encourages and would eliminate any real competition. Coverage and pricing models would likely become standardized and fixed in such a manner that affordability and better coverage would be unattainable for many in that there would be no flexibility. That's aside from the fact that government run health care would necessitate a mountain of bureaucracy.
I'd much rather be able to pick and choose my coverages and be underwritten based on my individual circumstances for better coverage and better rates, just like I can do now with my car insurance.
Privatization and trading my employer paid coverage for a $500 increase in wages per paycheck (what my employer already pays for my current plan) so that I can afford to buy my own plan makes that possible much more simply (and far more dependably) than a government run health care program.
As for the tax benefit of employer paid coverage, make health insurance premiums tax deductible and you're covered there as well.
And side note on taxes, I think allowing HSAs (health savings accounts) for those not covered by high deductible plans would be beneficial as well.1 -
Yes, let's pay people more, and ask them to purchase their own health care or services on the open market (or not, based on their own self-perceived economic interests) . . . since expecting most people to plan for and fund their own retirement income has worked out so super well for everyone.
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What is our alternative? Leave it to the same government that has to keep extending the retirement age of Social Security and pays AIME (Average Indexed Monthly Earnings) at three different rates.
Some wages are are paid at 90%, then 32% and finally 15% up to the maximum AIME.
Those earners getting paid at 32 and 15 percent are getting the shaft in the program. Why not pay everyone 90% of every AIME dollar earned in the formula?
Or better yet, let people decide if they want to be part of it, and/or how much. I.E. I wouldn't mind contributing up to the 90% payout rate, but I really don't want to keep "contributing" when my "benefits" drop to 32 or 15 percent.
Let us contribute up to the 90% AIME value and then let us invest the rest as we, not Uncle Sam sees fit, which seems to be spending it immediately and putting an IOU in the Social Security "lock box."
I don't trust the same people who set up a system that pays those who contribute the most the least per dollar "contributed" to operate in my best interests when it comes to other benefits.Yes, let's pay people more, and ask them to purchase their own health care or services on the open market (or not, based on their own self-perceived economic interests) . . . since expecting most people to plan for and fund their own retirement income has worked out so super well for everyone.
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Yes, let's pay people more, and ask them to purchase their own health care or services on the open market (or not, based on their own self-perceived economic interests) . . . since expecting most people to plan for and fund their own retirement income has worked out so super well for everyone.
And the government has done better with social security?4 -
Carlos_421 wrote: »
And the government has done better with social security?
Not great, but better than most people of my acquaintance do with their 401Ks, 403Bs, 457s, IRAs and whatnot.
I have no solution.tbright1965 wrote: »What is our alternative?
<snip for length>
Heck if I know. I'm not an economist or financial planner.
Personally, I did fine with a middle class family income (never reached 6 figures per annum, not even very close) plus 403b, 457, IRAs (Roth & conventional), and a bit of "nonretirement" investments (a bit of the above funded by my employer, but by far most by me). I'm not at all wealthy, but I'm not terrified about my future, either.
But I've been very lucky: Stable employment, no financial catastrophes along the way.
Nearly no one around me without an employer pension (defined benefit type) has been able to retire at 65, and most take SSI as soon as they hit 65 if not 62. Many people I know say they don't expect to be able to stop working for pay, ever. They have negligible retirement savings.
Stats I read suggest that what I see in others around me is pretty common.
I don't know what the answer is, but it seems an inescapable but logical conclusion that most people either have really a lot of bad luck, or aren't very good at managing their own money.
I don't see why they'd do any better with health care than with retirement, sadly.
If policy doesn't work with actual humans . . . it doesn't work.5 -
What Theoldguy said. It is compensation from the perspective of the employer. That it's not counted that way to the employee (mostly) is a benefit to the employee, as they pay less in taxes.
Also, the tax issue is totally irrelevant here -- in real terms it is compensation for the employment provided to employees (or not) and from the employee's perspective ought to be understood as part of what's being paid for the job (part of compensation), but frequently is not, which is one reason the understanding of the costs of health insurance is often flawed in the US (employees may think they get free health care or count only the premiums they pay). Some who get employer-based insurance don't understand how much is actually being paid for it (and that at least in some cases their salaries in cash would be higher if not for the insurance part).
This is confused. I'm not saying they have a contract for $65K or $100K or what not and then are paid an amount less the cost of insurance. I'm saying that from the employer's standpoint what they are receiving in real terms is the $65K plus the additional cost of insurance, even if in the employer's mind the cost of insurance to the employer is not considered and if insurance costs go up they would still expect the same type of raise as in other years.
I'm not sure what you mean by right to compensation anyway, since the amount of the compensation is not a right, it's offered by the employer and accepted (or not) by the employee. Above minimum wage (and these are salaried employees, some exempt and some non exempt), there is no right to a specific amount of compensation per year outside of whatever was agreed to be paid. There is also no right to a particular raise per year.
What in fact happens is that most people take insurance, since ours is good, but in the rare cases where someone doesn't (perhaps the spouse has better insurance), their salary is often higher as a result, as that seems fairer. But if the employees compare salaries, I suspect it won't be seen as fair.
More realistically, it's provided in fields in which payment of such is market and standard, so you need to provide it to compete. It's not a reward. And employers will of course take it into account in considering the real cost of employing an employee.
Like I said before, I don't think employers should be the source of health insurance in an ideal world.
Thanks for taking time to elaborate on that. I understand now what you mean.
The thing that threw me off, is that your company is so obviously paying different salaries for the exact same work performed. Yes, the employees would definitely see this as unfair.
As for a better world in healthcare, read about https://en.wikipedia.org/wiki/Healthcare_in_Germany .
I think that's something to consider. It isn't free, but it definitely contributes to peace of mind, and a better quality of life.1 -
Not great, but better than most people of my acquaintance do with their 401Ks, 403Bs, 457s, IRAs and whatnot.
I have no solution.
Probably because they expected social security to take care of them.
Most people of my acquaintance (around my age) don't even have much hope that they'll receive social security benefits in retirement.3 -
No, but it would likely affect future raises, since health insurance is part of compensation. That's why the current system is screwed up. Employers understand that health insurance costs = compensation, but most employees don't.
At my firm, gov't taking responsibility for health care would result in higher salaries/bonuses. I know that's not true everywhere, but this is my particular first hand experience.
Devil's advocate but if the cash salaries were raised say $20k in lieu of health insurance, that becomes taxable income to the employees at their marginal rate, i.e, $5-7k pay cut when the tax impact is considered to their total compensation.3 -
Carlos_421 wrote: »
Probably because they expected social security to take care of them.
Most people of my acquaintance (around my age) don't even have much hope that they'll receive social security benefits in retirement.
Then they never did the math.
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Carlos_421 wrote: »
Probably because they expected social security to take care of them.
Most people of my acquaintance (around my age) don't even have much hope that they'll receive social security benefits in retirement.
I'm 63 with a traditional pension and a 401k. By the time I decide to take SS benefits, I'm guessing they will all be taxed away.0 -
Theoldguy1 wrote: »
Devil's advocate but if the cash salaries were raised say $20k in lieu of health insurance, that becomes taxable income to the employees at their marginal rate, i.e, $5-7k pay cut when the tax impact is considered to their total compensation.
IMO, This kind of salary calculation is completely distorting the value of an education-training-experience-based job market.... You can bet, that a prospective employee will be shopping for new employment with the much higher number on the last paycheck...😂2 -
IMO, This kind of salary calculation is completely distorting the value of an education-training-experience-based job market.... You can bet, that a prospective employee will be shopping for new employment with the much higher number on the last paycheck...😂
If the job seeker is smart they will look at the total value of the compensation package. Has been that way for years.
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Thanks for taking time to elaborate on that. I understand now what you mean.
The thing that threw me off, is that your company is so obviously paying different salaries for the exact same work performed. Yes, the employees would definitely see this as unfair.
As for a better world in healthcare, read about https://en.wikipedia.org/wiki/Healthcare_in_Germany .
I think that's something to consider. It isn't free, but it definitely contributes to peace of mind, and a better quality of life.
Interesting you selected that, as the German system is the one I often promote as a better option.
Yes, I agree some employees don't see it as fair, and I don't like it (although I do think it's fair), but I do get why others see it as more fair, since health care is in reality part of compensation. I would far, far rather not have to deal with health care and pay people salaries/bonuses based on value. Btw, in a small firm, no one has exactly the same job as anyone else IME. What angers me about the current system is I'd rather actual salary reflect how hard working and competent someone is more accurately. And it would absent the health insurance issue at my firm, at least to some degree (there are still issues re job title, market, and seniority, of course).
I'll say again that costs of health care in the US are distorted by the employment-based system.3 -
Theoldguy1 wrote: »
Devil's advocate but if the cash salaries were raised say $20k in lieu of health insurance, that becomes taxable income to the employees at their marginal rate, i.e, $5-7k pay cut when the tax impact is considered to their total compensation.
True, but that doesn't bother me.1 -
Theoldguy1 wrote: »
If the job seeker is smart they will look at the total value of the compensation package. Has been that way for years.
And most do. Benefits are often similar within a profession (in mine everyone copies each other), but it's definitely considered.1 -
Yes, let's pay people more, and ask them to purchase their own health care or services on the open market (or not, based on their own self-perceived economic interests) . . . since expecting most people to plan for and fund their own retirement income has worked out so super well for everyone.
The issue with retirement and health care is that people are not willing to let old people/sick people just die as a result of their financial irresponsibility. It's not just a hardship to them, but perceived as a bad thing for the rest of us. So if someone doesn't save for retirement, we aren't comfortable with it, so SocSec (which I do think I'll get to some degree, although I've paid in way more than I will get and am okay with that). Similarly, if someone doesn't have insurance or has bad insurance, we aren't willing to let them just die, and so emergency rooms must cover them, and the idea of no pre-existing condition denial is popular and so on. So why not force everyone to pay for that advantage? I'm not into the idea of someone being irresponsible and not paying for that, but I'm also not into the incredibly severe cost, so I'd like something in health care more like the rest of the first world countries.1 -
<snip> So why not force everyone to pay for that advantage? I'm not into the idea of someone being irresponsible and not paying for that, but I'm also not into the incredibly severe cost, so I'd like something in health care more like the rest of the first world countries.
Because I'm not into a free people being forced to subsidize irresponsible choices.
It's the modern day ant and grasshopper.
If I'm putting 20% or so of my earnings into my 401(k) into an S&P500 index fund, and my neighbor who makes the same sort of money is buying a new sports car, motorcycles and boats frequently, why am I expected to pay for his lack of saving for retirement?
So I make good money and drive a used, 7 year old $10k car instead of buying or leasing a new $40k car every 3 years.
I have no problem with my neighbor buying the boats, and motorcycles and what not, because he shouldn't be forced to spend his money the way I think he should.
But then taxpayers like me shouldn't be forced to cover him if he comes to the end of his working days and has little or nothing saved.
When you talk about FORCING people to pay for others, you lose me. I thought, at least here in America, we were founded on the principle of individual freedom.
Forcing me to participate as the government sees fit goes counter to that freedom.
It doesn't mean I'm not willing to help. I simply want to have the freedom to choose how I help. The worst possible solution, from the perspective of preserving freedom is to allow politicians to buy votes by forcing my contributions to help in the fashion they believe will get them the most votes.
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tbright1965 wrote: »
Because I'm not into a free people being forced to subsidize irresponsible choices.
It's the modern day ant and grasshopper.
If I'm putting 20% or so of my earnings into my 401(k) into an S&P500 index fund, and my neighbor who makes the same sort of money is buying a new sports car, motorcycles and boats frequently, why am I expected to pay for his lack of saving for retirement?
So I make good money and drive a used, 7 year old $10k car instead of buying or leasing a new $40k car every 3 years.
I have no problem with my neighbor buying the boats, and motorcycles and what not, because he shouldn't be forced to spend his money the way I think he should.
But then taxpayers like me shouldn't be forced to cover him if he comes to the end of his working days and has little or nothing saved.
When you talk about FORCING people to pay for others, you lose me. I thought, at least here in America, we were founded on the principle of individual freedom.
Forcing me to participate as the government sees fit goes counter to that freedom.
It doesn't mean I'm not willing to help. I simply want to have the freedom to choose how I help. The worst possible solution, from the perspective of preserving freedom is to allow politicians to buy votes by forcing my contributions to help in the fashion they believe will get them the most votes.
Yep, you'll be paying taxes on your 401(k) withdrawals so your neighbor that bought expensive toys all through his life doesn't have to eat dry dog food in his old age.
Personal responsibility in so many areas is down the toilet.1 -
No, but it would likely affect future raises, since health insurance is part of compensation. That's why the current system is screwed up. Employers understand that health insurance costs = compensation, but most employees don't.
At my firm, gov't taking responsibility for health care would result in higher salaries/bonuses. I know that's not true everywhere, but this is my particular first hand experience.
If you wanted to make it clear to your employees, you could remove added cash compensation from their salaries and tell everybody at open enrollment that they can choose either employer-subsidized health insurance or receive a lump-sum payment (or spread out over the year as a separate line item on their paychecks) equal to the cost of health insurance.0 -
lynn_glenmont wrote: »
If you wanted to make it clear to your employees, you could remove added cash compensation from their salaries and tell everybody at open enrollment that they can choose either employer-subsidized health insurance or receive a lump-sum payment (or spread out over the year as a separate line item on their paychecks) equal to the cost of health insurance.
There's no need to do that (which would be unpopular). People are just told at year-end total benefits including bonus, and health insurance, and also told their raise. So in theory they know what we consider their overall compensation to be, but I just don't think people consider health insurance part of it, even when informed of the costs.
My point about my own employer was to illustrate that I don't think companies prefer having to be in the business of dealing with health insurance, that in some sense it distorts compensation, or can, and that one issue with discussing health care costs in the US is that many people who have employer-based health care don't understand the costs of that health care. Even though I know better, I experience this myself, as I don't think of my health care as costing what it actually does.
Employer-based isn't a good system, but at least until recently (and maybe still) it's been popular among those who have it such that it's untouchable, because people don't see the real costs and because if the alternative is having to deal with finding insurance on an individual basis most find it preferable.1 -
tbright1965 wrote: »
Because I'm not into a free people being forced to subsidize irresponsible choices.
We aren't going to refuse people who can't pay any medical attention. Emergency rooms will have to treat them. This is IMO not a bad thing, but it does mean that I think everyone should pay into the system in some sense, depending on their ability to pay. I don't think someone should be able to just choose to have no health insurance and make the rest of us pay for him. First, if he said "I'm willing to just die for lack of medical care if in a car accident" or "if I develop a medical condition through bad luck," I honestly don't believe him. I think it's bravado based on a "nothing bad will happen to me" kind of attitude. Second, I don't think a good society does let people just die from something that we could fix, because the person lacks cash (and medical bills for these kinds of things are huge) or insurance.
So I'm willing to structure society (as in most other developed countries) so everyone has access to health care and everyone pays in. It's one of those basic ways in which living in a society requires costs and responsibilities.4 -
There's no need to do that (which would be unpopular). People are just told at year-end total benefits including bonus, and health insurance, and also told their raise. So in theory they know what we consider their overall compensation to be, but I just don't think people consider health insurance part of it, even when informed of the costs.
My point about my own employer was to illustrate that I don't think companies prefer having to be in the business of dealing with health insurance, that in some sense it distorts compensation, or can, and that one issue with discussing health care costs in the US is that many people who have employer-based health care don't understand the costs of that health care. Even though I know better, I experience this myself, as I don't think of my health care as costing what it actually does.
Employer-based isn't a good system, but at least until recently (and maybe still) it's been popular among those who have it such that it's untouchable, because people don't see the real costs and because if the alternative is having to deal with finding insurance on an individual basis most find it preferable.
So you tell the employees the cost of health and they don't understand the cost? Seems like an education/training issue.
Where I work they tell us in dollars and sense the cost of healthcare insurance included in our compensation.2 -
True, but that doesn't bother me.
So you're good with paying additional income tax on cash compensation in place of health insurance? Plus some other tax to fund government provided health care and most likely a supplemental health insurance policy like many on Medicare and those in other countries with some sort of government healthcare have.
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Theoldguy1 wrote: »
So you're good with paying additional income tax on cash compensation in place of health insurance?
Yes. Costs in the US under the current system are higher than in other countries, and I think adopting one of the other systems (there are a variety of different approaches) would be preferable to the way we do it. I also think a system where people are more likely to get regular preventative care would be better in some of the ways the US system is flawed -- for example, more consistent medical care across populations during pregnancy, and well patient check-ups allowing for intervention about issues like obesity.
Tying it to employment also discourages mobility and starting your own business.6 -
I've personally survived cancer 25 years ago and have seen enough bad deaths to know that I don't want any heroic measures taken to extend a so called, low quality "life."
I've completed my health care directives, and my family knows my desires.
So what you may judge as bravado is actually an informed choice on my part.
Don't confuse my distrust of government as an unwillingness to help.
I believe anything really important is too important to be left to government.
If someone is clamoring for a government solution, I wonder why it's not important enough for them to invest their personal time, talent and treasure into the issue.
We aren't going to refuse people who can't pay any medical attention. Emergency rooms will have to treat them. This is IMO not a bad thing, but it does mean that I think everyone should pay into the system in some sense, depending on their ability to pay. I don't think someone should be able to just choose to have no health insurance and make the rest of us pay for him. First, if he said "I'm willing to just die for lack of medical care if in a car accident" or "if I develop a medical condition through bad luck," I honestly don't believe him. I think it's bravado based on a "nothing bad will happen to me" kind of attitude. Second, I don't think a good society does let people just die from something that we could fix, because the person lacks cash (and medical bills for these kinds of things are huge) or insurance.
So I'm willing to structure society (as in most other developed countries) so everyone has access to health care and everyone pays in. It's one of those basic ways in which living in a society requires costs and responsibilities.
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Yes. Costs in the US under the current system are higher than in other countries, and I think adopting one of the other systems (there are a variety of different approaches) would be preferable to the way we do it. I also think a system where people are more likely to get regular preventative care would be better in some of the ways the US system is flawed -- for example, more consistent medical care across populations during pregnancy, and well patient check-ups allowing for intervention about issues like obesity.
Tying it to employment also discourages mobility and starting your own business.
That's fair, so many it seems are quick to say have "the rich" pay more taxes for healthcare or whatever and they define "the rich" as anyone making $1 more than they do.
I'd personally what some fundamental changes in the system, limits on malpractice, something done about patents and how long pharmaceutical companies can gouge patients, nurse practitioner or physicians assistant would be first point of contact as opposed to doctor, etc before just throwing money to fund what we are doing now.2 -
I have personal positive experience in this (first bolded part). There are a few perks in this, that are not explained in the link.
Interesting you selected that, as the German system is the one I often promote as a better option.
Yes, I agree some employees don't see it as fair, and I don't like it (although I do think it's fair), but I do get why others see it as more fair, since health care is in reality part of compensation. I would far, far rather not have to deal with health care and pay people salaries/bonuses based on value. Btw, in a small firm, no one has exactly the same job as anyone else IME. What angers me about the current system is I'd rather actual salary reflect how hard working and competent someone is more accurately. And it would absent the health insurance issue at my firm, at least to some degree (there are still issues re job title, market, and seniority, of course).
I'll say again that costs of health care in the US are distorted by the employment-based system.
E.g., most of the listed different health insurance organizations are specialized, and they are exclusively serving members of certain occupations/trades (and associated fields of study on student insurance policies). This gives them the freedom to pass on savings to the insured, which may reflect in a lower percentage of their salaries being deducted as premium.
The second bolded section... Agreed! I had mentioned a similar thought a few posts earlier, and I got a woo for it.
Declining healthcare is not that easy for everyone, though. When employers are trying to avoid the costs of their own employees, they won't just let any spouse join in. My husband had started a new job 2 years ago, and it came with stellar international healthcare. I was not allowed to participate, because I still qualified for a lousy plan with my own employer. I couldn't buy in on my own...because the provider does not operate in this state. Bummer...
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To add to my comment above regarding fundamental changes as I can't edit it. Probably will have to have some sort of national excise tax on high calorie nutrient poor foods and also eliminate those foods from SNAP eligibility.0
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