While there were experiments as early as the 1920s, employer-sponsored health insurance truly began during World War II. During the war, wages were capped by the federal government, so employers needed another means to entice and keep employees. The incentive they decided on were benefits like health insurance. These health benefits packages were not considered a part of employees’ wages and the employers could deduct what they spent on these benefits packages from their corporate taxes. A win-win situation!
A Answers (2)
Michael Roizen, MD, Internal Medicine, answered
UnitedHealthcare answeredEmployer-sponsored health insurance was virtually an accident that began at a time of great peril in the U.S. during the Great Depression. The Great Depression was a severe worldwide economic crisis that started around 1929 and lasted almost a decade. In 1935, President Franklin D. Roosevelt had voted against inclusion of national health insurance when he signed the Social Security Act. Yet, President Roosevelt believed in the right of quality health care for all Americans. In January 1943, President Roosevelt called for health care insurance from the cradle to the grave in his State of the Union address. The following year, Roosevelt called for the right to adequate medical care and the opportunity to enjoy good health in his 1944 State of the Union address. Many private health insurance companies arose during this time to sell health care policies to employers. The employer-sponsored health insurance policies helped to supplement the worker wage gap after the Great Depression and war. Private health insurance also provided medical care coverage for employees and their families.