when medical care is reimbursed through employer provided insurance whose welfar
ID: 1168509 • Letter: W
Question
when medical care is reimbursed through employer provided insurance whose welfare is ultimately affected when cost of medical care rises: the owners of the firm that pays the premiums, the government whose revenues are reduced because insurance benefits are not taxable as wages, or the public in their roles as workers, consumers, and taxpayers? Is there any difference between short term and long term effects? when medical care is reimbursed through employer provided insurance whose welfare is ultimately affected when cost of medical care rises: the owners of the firm that pays the premiums, the government whose revenues are reduced because insurance benefits are not taxable as wages, or the public in their roles as workers, consumers, and taxpayers? Is there any difference between short term and long term effects? when medical care is reimbursed through employer provided insurance whose welfare is ultimately affected when cost of medical care rises: the owners of the firm that pays the premiums, the government whose revenues are reduced because insurance benefits are not taxable as wages, or the public in their roles as workers, consumers, and taxpayers? Is there any difference between short term and long term effects?Explanation / Answer
Short term effect-
The company who is providing HRA to their employees would suffer a loss when cost of medical care rises.
For example a company XYZ is set a standard medical care up to 3 lakh per annum for employee whose salary is 2 lakh per annum. The employee during his service gets ill and admitted into the hospital. The doctor examines the employee and explains that he has cancer and clear that the total expending could be above 12 lakh. In this case the total expending would be paid by the employee. Hence there would be occur a huge loss for the owner of the company.
The government would be also bears loss because he would not get any tax.
Long term effect-
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