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Comment by dv_dt | Hacker News Reader

Wait, why should she lose her flexible medical benefits? Shouldn't recovery of the expense fraud be a separate legal process from taking of personal medical accounts?

Why do we connect medical benefits to employers?

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>Wait, why should she lose her flexible medical benefits?

Because it was one of those "healthcare savings flex accounts" where the company puts in "virtual dollars" to pay for some types of health care. Unlike unused vacation days that requires payout on the last paycheck by law, or a 401k account, this type of "flex account" is really a convenient accounting category that's administered purely by corporate discretion.

If the employee gets fired for just cause, the company decided it didn't want to let him/her walk away with the flex account. For the retirees that left on good terms, they do. It's just the way they did things. I think the idea is that the the ex-employee is now viewed as a criminal so the company feels justified in withdrawing discretionary benefits.

The regular type of employee health insurance that one could extend with Obamacare or COBRA was a separate thing.

(Ninja edit to reply below: it was not an FSA or "cafeteria" plan that deducted real dollars from the employee's paycheck. It was literally "virtual dollars" that the company allocated to the employee. But the virtual money turned into real money when the retiree used it to pay Medicare premiums. If there's an industry-wide jargon for this type of virtual bank account for healthcare that the employee never directly contributed to, I don't know what it is.)

Maybe you're talking about a different kind of account, but FSA dollars come out of the employee's own paycheck.

Sounds like they're referring to an HRA account[1][2]. It's a fully employer-funded, employer-owned, and employer-controlled reimbursement account. It's similar in function to an HSA account, but it doesn't actually belong to the employee and doesn't follow the employee when they're terminated. My employer offers both HRA and HSA based high deductible plans, as well as a PPO plan. The HRA plan is definitely the best plan on paper, especially since the unused HRA funds rollover[3], but a huge caveat being that you lose any HRA balance that you've accumulated over time if you ever leave or get terminated, since it doesn't actually belong to you.

[1] https://www.investopedia.com/terms/h/hra.asp

[2] http://www.aetna.com/producer/aetnalink/2009-4q/natlink_hra_...

[3] Employers have significant leeway over how the HRA is structured, what it will cover, whether you have to use any FSA funds you have beforehand, whether unused balances will rollover or reset next year, etc. My employer happens to have a really good HRA structure, including rollover balances and using HRA funds before FSA funds.

FSA dollars come out of your own paycheck, but any unspent dollars revert to your employer when your employment terminates.

On the other hand, if you save $2500/yr in your FSA, spend it in one month after only after a little over $200 has been deducted from your paycheck, then quit, you just got an extra $2300 out of your employer you didn't pay for, so it goes both ways.

HRA - Health Reimbursement Arrangement, perhaps. They are entirely funded by the employer and do not involve paycheck deductions like an FSA or HSA would.

Why are our healthcare benefits so convoluted? Not being able to take the benefit with you away from an employer is a major negative that most people I'm guessing won't calculate in up front - at least it muddies the compensation question and comparisons to other employers.

Employer-related healthcare is largely exempt from taxes.

Many would suggest it's because multi-billion dollar industries (insurance, medical administration, tax, accounting) are partially dependent upon its enormous complexity for their existence. Or, perhaps because the lobbying of a few said billion dollar industries is more persuasive ($$$) to our legislators than the occasional rant from a common citizen.

Or maybe... it's because playing the game is advantageous to those who know how to play. "To the victor belong the spoils."

>Why do we connect medical benefits to employers?

It could arguably be traced back to the war time rationing of WWII:

>To combat inflation, the 1942 Stabilization Act was passed. Designed to limit employers' freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead.

[0] https://www.griffinbenefits.com/employeebenefitsblog/history...

[1] https://www.chicagotribune.com/news/opinion/commentary/ct-ob...

Ironically that is probably a contributing factor for the lack of socialized healthcare in the US. The law of unintended consequences strikes again.

Almost certainly. And then post-WWII, good medical benefit plans got enshrined in a lot of collective bargaining agreements and became pretty much the standard for large employers generally. At which part, taking them away is going to be very difficult.

Good question. It's a very strange method of motivation or coercion that we've all just kind of accepted into our lives, and we feel lucky to even have that.

Well all of us in the US, anyway. For some reason it doesn't work that way in most places on earth.

Medical job-lock is a real thing that happens, and most of us just discount the possibility completely until an unexpected problem crops up. AMHIK. Everyone be grateful for your health while you can, and plan for the future.

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