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Illustration: Sarah Grillo/Axios

It’s a practice that has not received much attention, but some employers have moved to "progressive," or wage-related, health benefits in recent years. That's where their lower wage employees pay a smaller share of insurance premiums, deductibles or health account contributions than higher-wage employees do.

Why it matters: Unlike consumers in the Affordable Care Act marketplaces, lower wage workers in the far larger group market don’t get any help with premiums or cost sharing. With premiums and deductibles rising and wage growth stubbornly flat, progressive benefits are one way for employers to help their low wage employees with their health care costs.

The back story: We don’t have great data on how many employers are cushioning the costs of health care for their lower wage workers, but we have some:

  • We asked about this in our 2014 Kaiser-HRET Employer Health Benefits Survey, and found that 25% of very large firms (more than 5,000 workers) asked lower wage employees to pay less for premiums, compared with just 1% for firms with less than 200 workers. Preliminary data from this year’s survey suggests these numbers have not changed much.
  • In a 2016 survey of large firms, The National Business Group on Health found that 27% of large firms adjust premiums contributions for lower wage workers, 13% reduce contributions required for health accounts, and 2% reduce deductibles.
  • It’s understandable why workers might need help. The average cost of a family premium in the group market was $18,764 in 2017, with workers paying $5,714 of that. Lower wage workers pay somewhat more — $6,001 — in companies with large numbers of low wage employees.

More large non-profits seem interested in progressive benefits than corporations do. I wrote about Harvard University doing this in the Wall Street Journal in 2015. The University of Miami has a similar program.

The big picture: Premiums, deductibles and other out of pocket costs have been rising at a time when wages have been relatively flat, increasing the pain from out-of-pocket costs for employees and especially for lower wage workers. That's why progressive health benefits may get a closer look — but they're not a panacea.

Economists take it as an article of faith that any break on benefits comes from wages. As an employer, I know that it's always a dilemma for employers to decide between wages and benefits, and employers balance the tradeoff in different ways depending on a myriad of factors (it’s not a straight economic calculation).

There are other complexities:

  • What wage level is fair?
  • Will employees just above the level feel aggrieved or seek a salary cut to reduce their health costs?
  • How complicated is the policy to administer?
  • How will this play out in unionized work forces?

What to watch: Despite the challenges, at a time when the 155 million Americans who get their insurance at work are getting no relief from health costs, don't be surprised if more employers give lower wage workers some help by linking premiums or other out-of-pocket costs to wage levels.

Go deeper

1 hour ago - Health

CDC: It's time for "universal face mask use"

Photo: Paul Hennessy/SOPA Images/LightRocket via Getty

The CDC is urging “universal face mask use” for the first time since the coronavirus pandemic began, citing recent case spikes as the U.S. has entered a phase of “high-level transmission” before winter officially begins.

Why it matters: Daily COVID-related deaths across the U.S. hit a new record on Wednesday. Face coverings have been shown to increase protection of the wearer and those around them, despite some Americans' reluctance to use them.

3 hours ago - World

Saudi Arabia and Qatar near deal to end standoff, sources say

Qatar's prime minister (R) attends the 2019 Gulf Cooperation Council summit in Saudi Arabia. Photo: Fayez Nureldine/AFP via Getty

Saudi Arabia and Qatar are close to a deal to end the diplomatic crisis in the Gulf following U.S.-mediated reconciliation talks this week, sources familiar with the talks tell me.

Why it matters: Restoring relations between Saudi Arabia and Qatar would bring a sense of stability back to the Gulf after a 3.5 year standoff. It could also notch a last-minute achievement for the Trump administration before Jan. 20.

House passes bill to decriminalize marijuana

Rep. Earl Blumenauer (D-Ore.), a longtime marijuana legalization advocate and co-sponsor of the bill. Photo: Pete Marovich For The Washington Post via Getty Images

The House on Friday voted 228-164 in favor of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, marking the first time a congressional chamber has voted in favor of decriminalizing marijuana at the federal level.

Why it matters: The Washington Post describes the bill as a "landmark retreat in the nation’s decades-long war on drugs," which has disproportionately affected people of color.