Comment by johnnyanmac

Very long history I suggest you look into, because it's very interesting, but the oversimplified explaination:

after WW2, there was very obviously inflation. It was crazy in the EU and Japan, but the US still experienced some too. To fight this, the government made a then-common tactic of wage controls: basically cap off the maximum amount an employer can compensate workers, in order to fight the inflation spiral.

But there was an imporant exemption. This was only on wages and not any benefits given to employees in order to try and quell the inevitably angry employees. So when companies couldn't attract talent with more money, they offered more benefits. including employer sponsored healthcare. Perfect since these contributions were free from income tax.

And the modeled spiraled from there. a tax code passed in 1954 to let these contributions be business expenses, Medicaid came in the 60's, etc. It was great back then, but it was getting more expensive to navigate and companies started compromising to manage it. up to our favorite healthcare starting its vertical integration 20 years ago to come into what we know them for today.