> The choices of plans offered by companies is far, far smaller than the choices available to me on the open market.
Maybe I wasn't searching correctly, but I was recently discussing healthcare and taxes with someone and briefly searched on the Healthcare.gov exchange to look at prices. There were only three PPO plans (where you can freely go to any doctor in network), and all three were HDHPs, all from the same company. There were many HMO plans, some HDHP and others with low deductibles, but often extremely small local networks and limited choice of both PCPs and specialists.
> This makes health insurance cheaper to the employer than to individuals.
One other thing to note in your analysis is that most large employers are not buying any insurance, but actually self-insuring (funding the claims out of their own pool of money). So the employers are actually acting as insurance companies for their workers, rather than simply buying and reselling commercial insurance.
There would be additional considerations beyond taxes in analyzing whether this type of insurance is more economically optimal, for example, the fact that each company has a distinct risk pool which may not be similar to the general population, depending on the company.
This was my experience, as well, with the individual market. It is virtually impossible to replicate an employer-provided plan at all with market plans. You, as an individual, do not have the leverage to buy what most would consider good health insurance plans on your own.
Are you in a state that has pushed back against ACA? Or maybe you're only looking at the "bronze" tier, which will be skewed towards low cost HMOs and HDHPs?
FWIW, in California I see like 5 different options for HMO across all of the tiers, a couple are local ones I've never heard of, but there's also some like Kaiser that are fairly large networks.
I'm in a state that championed the ACA, and there are dozens of plans available on the individual market, but none of them are very good. There are plans from large insurers for large networks, but those plans are much worse than any group policy plans employers can buy from the same exact insurers. And it gets even worse if you want to buy a market plan that covers your family.
This is for Orange County, NC, which has not expanded Medicaid but is using the regular federal ACA marketplace. There are definitely a lot of low cost/quality HMOs at the Bronze level, but across all tiers there are 63 HMOs, 3 PPOs, and 10 Point of Service (POS), a term I hadn't heard previously.
For comparison, I am on my mom's insurance from Belk Stores which is self-insured, offering three different HDHP PPO plans with a pretty good network and a range of deductibles within the HDHP window. Premiums are pretty bad. My dad worked for a SP500 semiconductor company before retiring, about five years ago they switched to HDHP-only, which just two options both at the higher end of the HDHP range. Premiums were better, but actual coverage not much better.
Maybe I wasn't searching correctly, but I was recently discussing healthcare and taxes with someone and briefly searched on the Healthcare.gov exchange to look at prices. There were only three PPO plans (where you can freely go to any doctor in network), and all three were HDHPs, all from the same company. There were many HMO plans, some HDHP and others with low deductibles, but often extremely small local networks and limited choice of both PCPs and specialists.
> This makes health insurance cheaper to the employer than to individuals.
One other thing to note in your analysis is that most large employers are not buying any insurance, but actually self-insuring (funding the claims out of their own pool of money). So the employers are actually acting as insurance companies for their workers, rather than simply buying and reselling commercial insurance.
There would be additional considerations beyond taxes in analyzing whether this type of insurance is more economically optimal, for example, the fact that each company has a distinct risk pool which may not be similar to the general population, depending on the company.