Employer-based Health Coverage

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According to most researches carried out, health care insurance are a crucial part of employees’ allowance packages, and due to that study, a high percentage of businesses offer such benefits to the employees. Studies also show that small-size businesses and a few mid-size businesses offer health care benefits less frequently while the other business sizes prefer including the benefits in other packages.  Employee benefits were not considered important as a part of employee compensation in the United States of America until the mid-twentieth century. Before the twentieth century, employees suffered from illness and poor wages while businesses had no idea of their situation and the influence that it had on their business. But as time went on, politicians and labor union societies organized workers to claim for better pay, good working conditions and health care coverage, among other benefits and as a result, the employers had to agree with the move. The employers were also in search of competitive workers, who would co-ordinate in improvement and growth of their business (Fairlie, Kapur & Gates, 2011). Some of the following reasons motivated the employees to offer health care benefits:

The employers had to attract competitive, skilled, dedicated and trustworthy employees to gain a strong business foundation by offering health benefits. As the business grows, the employer has to find employees who would take the business to another level and since the cost of health care is very high, offering health care to your workers is one of the best ways to attract a better workforce. Besides, health care is one of the factors that aids in employee retention since researchers showed that employees would seek employment if their bosses would not offer them health care benefits. The employees were also concerned with the productivity and morale of their employees and saw that by relieving them the burden of health cost, the employees would be determined to work in such organizations. Surveys showed that when employers were willing and able to offer great benefits, it demonstrated that they were stable and had a strong belief in their company (Merchant, Lind, Kelly & Hall, 2013).  As time grew, technology was introduced, and most business owners realized that health care management was easier than they thought. For example management systems such as Unicorn HRO were developed to simplify management. The government had a part to play by setting up policies so as to motivate employers and even though some have not yet enrolled into the system, there is still hope that they may comply.

Health care benefits offered by employers have been a very beneficial factor in the America’s health care. One of the aims of America is to improve the healthcare services in the country, not only to the poor and mid-size but all her citizens. Employer-based health coverage has led to a reduction of government expenditure on insurance schemes and health policies such as Medicare and Medicaid by a very great percentage; therefore, the country can spend on other issues such alleviation of poverty by increasing employment opportunity in government sectors. More so, the health coverage by employees’ life expectancy has improved over the recent years because the procedures involved in accessing medical support has reduced and employees can get prevention and treatment of illness (Liu & Jin, 2015). Another impact is that the medical benefits have improved the quality of life in general. Before such schemes, most employees did not spend on their health as well as their family health, but as these benefits got introduced, they were able to go for frequent checkups, which ultimately reduced chances of severe infections built from minor complications. In general, employer-based health coverage has improved the lives of American citizens’ health wise.


Fairlie, R. W., Kapur, K., & Gates, S. (2011). Is employer-based health insurance a barrier to entrepreneurship?.Journal of Health Economics30(1), 146-162. doi:10.1016/j.jhealeco.2010.09.003

Merchant, J. A., Lind, D. P., Kelly, K. M., & Hall, J. L. (2013). An Employee Total Health Management-Based Survey of Iowa Employers. Journal of Occupational & Environmental Medicine55S73-S77. doi:10.1097/JOM.0000000000000045

Liu, Y., & Jin, G. Z. (2015). Employer contribution and premium growth in health insurance. Journal of Health Economics39228-247. Doi:10.1016/j.jhealeco.2014.08.006

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