Foodstuff Benefits

Imagine if food were a standard corporate benefit like health care.  After all it is a necessity; how can any responsible employer fail to provide it?

Of course each company won’t be able to offer its own foodstuff benefit so, instead, there will be major third-party payers in the system.  When you go to the grocery store, instead of taking out your Visa or American Express, you’ll whip out your United Foodstuff card instead.  Then there will be a long pause, consultation with the manager, and a few phone calls to determine what sort of copay you are required to make on the various items in your shopping basket.  You’ll end up having to put the Twinkies back because they are excluded from your foodstuff plan.

Some food stores are off-limits to you because they do not accept your foodstuff provider.  Others require that you pay in full and then request reimbursement from the provider.  There is a lower copay for some generic store brands than for name brands like Coke and Pepsi.

Shopping on vacation is a real problem since United Foodstuff doesn’t have agreements with any grocery chains south of the Mason-Dixon Line.  Out of the country, fuhgetaboutit.

Months after each shopping trip you are still receiving bills for the unreimbursed portion of the expense of the nutrition consultant who vetted your shopping list after the fact to assure that you haven’t bought ingredients either singly or in combination that you might later sue either the grocery store or your employer over.  You also receive a letter urgently requiring that you prove that you have not claimed reimbursement for food used to make any meals covered by your children’s school lunch program or Meals on Wheels.

When your employer decides to switch foodstuff carriers, you have to change your shopping habits both to be in-network for the new carrier and to minimize your copay since the rules have changed.  However, if you live in Vermont, you can count on the fact that the State requires coverage for both tofu and maple syrup in all policies and, in New Jersey, cannoli never require a copay.

You must be very careful not to have a gap in foodstuff coverage between employers; individual foodstuff policies are very expensive – some say prohibitively so. And most food stores are very reluctant to deal with people with no coverage at all. Prices are 50% higher for food not bought under a foodstuff plan.  Even when you get a new policy from a new employer, pre-existing cravings are not covered.

The value of the foodstuff coverage you will be given is an important part of the total compensation you receive from an employer.  When weighing job offers, you may want to use a consultant to figure out the relative value of the foodstuff portions of these offers.  But, unless you are protected by a union or an Enron-type executive contract, your employer is free to change the foodstuff plan at will after you are hired.

“OK,” you say. “Enough.  This is plainly absurd”

So is employer-funded healthcare, even though it does have an insurance as well as a bill-paying component.

Third party payers add enormous cost and complexity to the health care system.  Health care choices are distorted by labyrinthine plans which often seem to be designed NOT to pay benefits.  The health care delivery system is largely incapable of charging for care EXCEPT through these plans.  When individuals pay directly, even at the point of care, they are charged more even though the cost of collecting from them is much less.

Employers are motivated to cut the cost of the benefit.  Third-party payers are motivated to pay out in benefits as small a portion of the premiums they receive as possible.  Participants (us and the health care providers) are motivated to game what we perceive as an unfair system.

Employers are only in the healthcare benefit business because, during World War II wage and price controls, these benefits were a legal alternative to raises (see this post on unintended consequences) and because there is currently a tax benefit to having employers rather than employees pay for healthcare.

It is now past time for two major changes:

Employers should pay people salaries with which people buy whatever food, toys, and health care they want (noted that it is debatable whether people should be allowed to go without coverage but this isn’t an employer issue).

Paying for routine healthcare like checkups, immunizations, drugs at reasonable costs and reasonable quantities, belly-aches, cuts and bruises, etc. etc. should be just like any other predictable expense such as food or transportation (noted that it is debatable – at least as long as there is government backup to health care – whether people should be allowed to go without checkups and immunizations). Absolutely no reason for a third party to be involved and all the reasons in the world for them not to be.  Insurance for major unpredictable expenses is entirely different and is a legitimate insurance function which must be separated from paying routine bills and from paychecks.

As you can probably guess, more posts on this to come.