#023 – Reprise: Why You Save By Getting Your Health Insurance Through Your Employer is an encore presentation of one of our most listened to episodes.    Learn the advantages and reasons why you win, your employer wins and the insurance company wins when your employer provides health insurance as an employee benefit.

History Of Employer Sponsored Health Insurance

In Dallas, one of the earliest known employer sponsored  health insurance plans was arranged by Baylor Hospital to benefit public school employees at the time of the Great Depression.  Baylor had a hospital full of empty beds.  To stimulate demand for its services, spread its risk among a large number of people and efficiently sell its product, Baylor offered a monthly pre-paid hospital benefit to the numerous teachers in Dallas.  We know that plan as Blue Cross.

Similarly, at the turn of the 20th Century, groups of physicians offered their services to the logging and mining communities of Oregon and Washington on a prepaid basis.  We know that plan as Blue Shield.

Baylor Hospital and the PNW

Employers Pay The Majority Of Health Insurance Premiums For Their Employees

Whether employees know it or not, when they get their health insurance through their employer, the employer is paying most, if not all, all of the health insurance premium on their behalf.  The most recent Kaiser Family Foundation Health Benefits Survey shows that 157,000,000 (one hundred and fifty-seven million) people in the United States get their insurance through their employer.  The survey further states that employers pay 80% of the premium for single employees and nearly 60% for employees their families.  This fact is why many people are so surprised when they separate from employment and are faced with paying 100% of their premium under COBRA.

Kaiser Family Foundation 2020 Employer Health Benefits Survey

Make The Most Of Your Deductible

Single employees (i.e Employee Only in insurance jargon) only have to worry about one deductible per year.  Employees with a spouse, a child or both have to face a deductible twice as high as single employees.  This is especially true for High Deductible Health Plans.  Their is an easy solution for families to reduce their deductible to the same as a single employee, however.  It is called an Embedded Deductible.

Embedded deductibles allow families to meet only the individual deductible when a single family member has a claim.  If two family members (or more) have claims in the same year, each is subject to the single deductible, until each reaches the single limit or all reach the family limit.

*When working with a High Deductible Health Plan and a Health Savings Account, make certain that the deductible is at least $2,800 for an individual – otherwise the IRS will not allow you to deduct your HSA contributions for that year.

Embedded Deductible Example

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