What Happened

In the 60s, medical insurance was a FRINGE benefit, today, it’s a CORE benefit. As a single person in the 60s, the last thing on my list was medical insurance because it represented less than 2% of my overall compensation.

For two years in 1971/2, I was working in the insurance industry and specialized in small group policies. The monthly cost for a single person was about $9.00, and for a family, it was about

$14. These plans were basic but good. They required a deductible of about $100 then the insurance paid 80% of the costs all the way up to $1 million. Employers were happy to include medical insurance in the compensation package.  It was “a lot of cluck for the buck.”

Rapid Increases

Today it’s radically different. The Wall Street Journal recently cited the horrible situation that employers and individuals endure. The headlines were “Health Coverage Cost Firms $20,000 a Family”, per year. Then, it goes on to report that employers are increasing the deductible such that workers paid on average $5,547, in addition to the employer’s contribution.


Thus, if the median salary for a worker is in the $60,000 range, insurance represents about 25% of the compensation package which no longer looks like a fringe benefit. A friend of mine, who has 100 employees, was recently stressing out over an increase and quoted similar numbers saying that insurance represents 22% of the company’s net income.

It makes no sense to have a system that almost forces employers to be in the insurance business for the benefit of employees.

Rich Meyer, Blogger & Author