Under Single Payer, employers will pay less because they will no longer provide commercial health insurance for their employees. Insurance costs will be replaced by a payroll deduction, similar to Social Security and Medicare. The payroll taxes will be significantly lower than what employers are paying now to insure their employees.
Here’s the math: The average wage for an American worker is $49,000. The average cost for employer-based commercial insurance is $19,000 per year for family coverage and $6,500 per year for single coverage. Therefore, the average cost of a health benefit is in excess of 15% of employee compensation. Further, insurance premiums do not include what employees additionally pay out-of-pocket for care. Those costs include rising deductibles and co-pays. The insurance premiums that employers pay also do not include the HR expense to administer health plans or the rising cost of other insurances that have a health care component, such as Workman’s comp; the state, local and school taxes that have a high cost of health care; or the overall drag health care has on disposable income that deteriorates demand for our products.
For many employers, the cost of a health care benefit is over 20% of payroll.