It is a tale of federally mandated wage control and specialized tax breaks. A quick google will show many articles outlining how we got here.
Why is car insurance not tied to employers? In general how much better does car insurance work than health? Are the prices not much more straightforward and is it easy to shop around? If you are treated poorly by your car insurance company, can you easily tell all your friends and change companies?
This is the real problem here. Most folks have no choice and no skin in the game, which leads to all these crazy stories about zero pricing information and no ability to change companies.
If the tax breaks simply got removed, and people had to actually pay directly for their insurance and could switch companies, the vast majority of these problems would go away.