Lane Tracy: Bye to benefits

September 28, 2013 

Bye to benefits

Employers are beginning to correct an error they made 70 years ago. World War II drew many employees into the armed forces and created a labor shortage. To prevent spiraling labor costs, the federal government declared a wage freeze. Employers responded by offering benefits.

The IRS then declared that such benefits were tax deductible to employers as labor costs and not taxable income to employees. Thus health care benefits became an especially desirable form of compensation. When the war ended and the wage freeze was lifted, labor unions found that employers were more willing to increase benefits than to boost wages.

Medicare and Medicaid have made employer health care plans for retirees unnecessary. The Affordable Care Act has finally brought us to the point where employers can reasonably argue that providing employee health care benefits is no longer their responsibility. Many employers are moving to the 29-hour work week to avoid having to fund such benefits.

Now the question becomes: Is health care a public responsibility? The law says yes, but many residents and legislators are shouting no. If employers are ready to shed responsibility for health care benefits, they would be wise to support Medicare, Medicaid and Obamacare.

Lane Tracy

Cary

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