New federal rules to allow employers to '401(k)-ize' health benefits

Is this something big? I don't know, but it sure sounds like it could something big.

While the Schiff / Pelosi clown show attempts to throw poo up stairs from their SCIF in the basement of House, Trump has delegated real IRS policy changes which offer more choices to consumers. And I hear 'pro-choice' is all the rage now.

Clyde Hughes at UPI explains:

"A change to the Internal Revenue Service code, set to take effect Jan. 1, allows employers to stop providing insurance for employees -- and instead pay workers pretax funds to buy coverage themselves.

Experts aren't yet sure how great an impact the change will have on the present system, but many agree the potential for radical change is great.

Michael Kolber, a partner with Manatt Health, which counsels companies on health coverage and access, said in an August op-ed that the new health reimbursement arrangements, or HRAs, will appeal to many employers because they will allow them to shed managing health plans for thousands of employees. He called the change a "401(k)-ization of employer health benefits."

The IRS amended its code to allow 401(k) plans more 40 years ago. Eventually, most companies abandoned pensions for the more cost-efficient option. The same scenario faces the health insurance industry.

A major reason why companies might want to sign on is that healthcare is at the heart of nearly every labor dispute."

This sounds like a self-inflicted wound. Well, sort of. But it takes gub'mint distortion of sto really foul things up.

How We Got to Now: A Brief History of Employer-Sponsored Healthcare

"To combat inflation, the 1942 Stabilization Act was passed. Designed to limit employers' freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead.

Suddenly, employers were in the health insurance business. Because health benefits could be considered part of compensation but did not count as income, workers did not have to pay income tax or payroll taxes on those benefits. Thus, by 1943, employers had an increased incentive to make health insurance arrangements for their workers, and the modern era of employer-sponsored health insurance began, a pivotal point in the History of Healthcare in America."

It's kind of a white-washed version of the post war years and how costs truly spiraled upwards and ever upwards, but the article does provide some solid nuts n bolts about how we got the modern era of "I didn't pay nothing; insurance covered it" malarky.

H/t: AoSHQ