Question

How do insurance plans offered by employers benefit employees even when employers do not pay any of the costs?

A. Companies that do not contribute to insurance costs must offer special benefits instead.
B. Employers, though they appear to have no costs, make some indirect legal contribution.
C. Employees are offered insurance plans at lower rates through group programs.
D. The amount paid by employees are tax-free only when employers make no contribution.

Answer 1

Employees benefit from lower rates on insurance plans offered through employer group programs, even when employers do not directly contribute to the plan's costs.

Step-by-step explanation:

Insurance plans offered by employers benefit employees through group rate reductions, even when employers do not pay any of the costs associated with the plans. One of the primary benefits is that employees are offered insurance plans at lower rates through group programs compared to what they would pay for individual insurance plans. Because insurance companies have a large number of clients in such group insurance programs, they have the leverage to negotiate with health care and other service providers for lower rates than an individual would typically be able to obtain on their own. This collective bargaining power dramatically increases the benefit to employees, saving them money on premiums and medical expenses.