Why is Health Care not compensation?

[maxrandb]

I can’t seem to understand how Health Care, Pensions, Retirement Accounts, and even Leave and Vacation are not counted as compensation?

In a nutshell, what are “benefits” that we get through our employer? Aren’t they either direct or deferred compensation? Aren’t they “earned”, just the same as my hourly or salary wages are? All of these things that are called “benefits packages”, or “compensation packages”, are filler for what would otherwise be higher wages. Let’s just call them the “bone meal in the ground beef”.

I am either being compensated through higher wages, or with “benefits” like health care (which I pay a premium for), retirement programs, paid vacation, sick leave, etc.

Since when did those things become something that a “benevolent” company gave to me as a “gift”, vice something that my hard work has earned?

I would think that companies would have 2 choices to make.

1. Let me pick the health care plan and benefits package that meets my needs and complies with Federal Law, or

2. PAY ME HIGHER WAGES so I can purchase them on my own.

If a company can decide how I use my compensation…what’s to stop them from dictating what I do with my wages?

Will they be able to deny me vacation because I want to go to Vegas, and it’s against their belief to gamble?

Will they be able to deny me from buying beer with the compensation they’ve paid me?

Do I, or ANY American worker have any rights anymore?

Recently, a company came under fire for limiting employees to 6 minutes a day for bathroom breaks.

Do they now even control my poop?

I know one thing…the Americans of my grandfather’s generation, who fought and died for worker’s rights, would kick us all right in the groin if they saw what we’ve become…sniveling little cowards, begging for living wages

[PoliticAverse]

1. The problem with the compensation for health care purchase issue is taxation...

The IRS has determined that when your employer provides you health insurance it does not count as
compensation/wages whereas if the just gave you the money they spent so you could buy it on your
own it will be taxable to you. Congress could easily fix this but hasn't...

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employee-Benefits

If an employer pays the cost of an accident or health insurance plan for his/her employees, including an employee’s spouse and dependents, the employer’s payments are not wages and are not subject to Social Security, Medicare, and FUTA taxes, or federal income tax withholding. Generally, this exclusion also applies to qualified long-term care insurance contracts. However, the cost of health insurance benefits must be included in the wages of S corporation employees who own more than two percent of the S corporation (two percent shareholders).

[Brickbat]

3. Ah, I didn't understand the question.

[maxrandb]

4. The way to fix this is to get the employer out of the Health Care business

Single Payer Medicare FOR ALL!!!

[PoliticAverse]

7. I was hoping the ACA separated employment from health insurance but no suck luck. n/t

[Brickbat]

2. When you say "counted as compensation," what do you mean?

Employers consider it part of your compensation. There's a big push for something called "total compensation statements," which are a form similar to a W-2 that show employees their wage/salary, plus the cost of their benefits, to give a clearer idea of what the total compensation package actually is. IIRC the ACA requires putting health insurance cost information on the W-2 itself for certain employees.

[maxrandb]

5. What I mean is that it is "earned"

just like my wages are "earned".

[Igel]

6. Some of the benefits are compensation.

Some aren't.

It's a favorite trick of language manipulators: Your entire compensation package consists of what your employer pays for you. That's your wages (before any taxes), the FICA wages paid by your employer, it's the employer portion of your insurance, sick leave or vacation days, as well as any retirement contributions that they make. In some sense, all your retirement income is "earned" during your working years, so it's not unreasonable to say that this is also part of your compensation.

We like saying that the average wage has declined, and then look at CEO compensation. My wages are about $49k/year. My compensation is a lot higher. And it's a lot higher if you take into account pension and SS benefits and attribute likely income from those sources until I'm 85 to the years I actually work. CEO compensation is high--but once you knock out deferred income, pension contributions, stock options valued at current but not future prices (which might be lower or higher), the picture's different. Their pay is still unconscionably high, but not insanely high. However once discussion of CEO compensation introduces numbers, often the writer goes back to calling it all "income" or "pay" and it's only insanely high.

No, it's not earned. There's the rub. If it's *earned* then it's going to be subject to income tax, with one gray area: Health care contributions. I elect to have my insurance contribution deducted before taxes. Think of it as tax avoidance. This is different from my employer's contribution to health insurance. That they set unilaterally; in some industries it's set by contract, but it's still officially the employer's share and not part of your income.

Paying out the employer's contribution was a viable option until the ACA, albeit a foolish one--if the employer pays you the $1000 or $3000 instead of paying the insurance company you get taxed on it. Not just income tax, but also FICA. Now if the employer doesn't set up the program and provide it (in some sense) they're going to be fined. Just raising your pay would have been foolish (if only because of the tax liability, let's ignore that most people probably would have spent the money on something else--possibility necessities, possibly strongly desired wants). Now just raising your pay instead of (partially) paying for health insurance results in punishment. That's a policy decision that most (D) strongly support.

Again, the entire HL business has an easy workaround. It's just that it's better to use the women as political footballs than produce the workaround. The workaround was already largely in place for truly religious organizations, and will just need to be administratively tweaked to accommodate those. After all, it's not the law that's at issue but an administrative regulation. That tweaking can just as easily accommodate HL and such corporations.

Note that there are a lot of morality clauses already built in to life. In some employer-sponsored policies you get breaks on your insurance rates if you aren't obese, if you don't smoke, if you're not a heavy drinker (or don't drink at all), if you exercise. These are different in that they have health consequences, but are similar in that most employers don't bother with them and those that are most likely to are also more health-conscious.

[Sivafae]

8. Even still...

Despite the fact that money I earn that pays for the part of the medical that my employer does not cover, is not taxed, it is still MY money that worked I worked for. How does a payment, that is both funded by the employer and the employee become all about what the employer wants?

Because if I read the ruling right, the SCOTUS ruled as if the whole payment was made by the employer.

[TexasProgresive]

9. This started sometime back in the 20th century

Maybe WW II there was a salary cap and companies offered benefits that did not raise wages to attract talent.

[GeorgeGist]

10. You can bet the employers count them as compensation ...

on their tax returns.