Question

If the aggregate labor supply curve were highly responsive to increased wages (elastic) instead of very inelastic as we have stated, how would an employer-mandated health insurance plan affect the country's international competitiveness?

Answer 1

Many employers offer health coverage to its employees with the concepts of the wellbeing of the employees and as good business. This can even attract and retain the best employees. Employers propose tempting and varied compensation packages, to allure and retain the employees. The compensation packages include the wages, health insurance coverage and retirement plans. The benefits packages along with the salary affect the employee retention. The elastic nature of the labour supply curve also supports the importance of benefit packages on employee retention and supply.

One of the fundamental aspects of America’s health care system is the Employer-sponsored health coverage.

Around 155 million people under the age group of 65 years receive their health coverage through an employer which is almost two-thirds of the total population.

Employer-sponsored coverage also has additional benefits like tax exemptions.

In US health care is one of the most important issues a family deals with and the medical care expenses without the insurance can affect the family’s economic stability. The employer-sponsored health insurance system as the joint venture of employer and employee.

The countries international competitiveness also will move to the positive side as the employee-employer satisfaction is more. Retention of employees for a long time will benefit the organization and country. Employee benefits can attract and retain the best talents, which in turn adds to the economic development of the country.