General Verrilli made a comment that illustrates a lack of understanding of both the individual insurance market and current tax code.  He claimed that that the individual market does not provide affordable care because subsidies are not available.

The most recent Kaiser Foundation study on group and individual premiums shows that in every state the average individual premium rate is lower than the average group insurance rate.  This spread can be as low as 3-4% in states like Massachusetts and Vermont to as high as 60-65% in states like Alabama and California.

The reasons for the differences in premium can be attributed to carrier risk selection, greater choice in plan designs and greater competition among carriers.

I am assuming that the  “lack of subsidies” comment means that the employer is not contributing to the individually purchased health insurance.  It is true that the employer can not directly pay for an individual health insurance policy, it is not true that it is not possible for an employer to provide funding for an employee’s health care and insurance expenses.  Section 105 of the IRS code permits employer funding of insurance premiums and any other section 213d expense via an employer funded Health Reimbursement Arrangement (fancy name for Section 105).  The accounts are subject to ERISA and offer the same tax advantages to the employer and employee as a traditional plan.

Setting up a benefit program in this way is the same thing as offer a 401(k) instead of a Defined Benefit Pension plan.  Employers can still provide compensation that is specifically targeted to health care expenses, but employees get to make their own choices in a personal and private setting.

I can wait to get past the first 30 seconds of the General’s open remarks from Tuesday.