In 1943, at the height of World War II, when the American armies and industries needed every troop or worker they could find, the Internal Revenue Service tweaked the tax code, granting tax-free status to employer-based health insurance. This didn’t seem to be a big deal, certainly nothing to rival the headlines about the German surrender in Stalingrad or Allied landings on Sicily. At the time, only about 9 percent of American workers received private health coverage as a job benefit. But with the new tax-free status, businesses set about attracting scarce workers by offering health insurance.
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