Chapter 1: The origin of employer-sponsored healthcare
The roots of employer-sponsored healthcare can be traced back to the 1920s, originating from voluntary insurance programs intended for specific groups, such as teachers, railroad workers, and postal employees. (Read
Part 1: Health insurance history: Where this messy system began.)
These programs laid the groundwork for what would evolve into employer-sponsored health insurance as we know it today. However, it wasn’t until the 1940s that employer health insurance truly gained momentum.
During World War II, due to wage freezes imposed by the government to fight inflation, employers began offering health insurance to attract and retain workers.
Then, in the 1950s, the government threw in tax benefits. Boom! The tax move seals the deal, making employer-sponsored insurance a regular part of the job package. Employers in America were now in the health insurance biz (whether they wanted to be or not.)