Originally, employers thought providing tax-free health benefits and paying all incidental medical expenses was a great way to compensate employees, with federal, state and city governments paying about half the bill through hidden tax subsidies. This subsidy was even larger for decision-making executives in high income tax brackets because the marginal federal personal income tax rate for people earning over $135,000/year ranged between 91% and 70% from 1959-1981. By the mid-1970s, employer-sponsored health benefits and/or employer health insurance with virtually no deductibles were almost universal among major employers.

As part of the Affordable Care Act (ACA), employers are required to report the cost of health benefits coverage under an employer-sponsored group health plan.   

The health reform law requires employers (with more than 50 employees) to pay a penalty of $2000 per employee (which is substantially less than what they spend on employee health benefits) if they choose to cancel health coverage after 2014.

According to Derek Thompson of the Atlantic, Andrew Webber, President and CEO of the National Business Coalition on Health, a national, not-for-profit organization that represents public and private sector employers fears health reform means the end of group health insurance.

The Associated Press reported that some firms are considering ending or reducing coverage for their workers. According to Paul Keckley of Deloitte (a major accounting and consultant firm), if one large firm decides to cancel benefits, many will likely follow:

The employer can use an ERISA and HIPAA-compliant defined contribution health plan to contribute to employees' individual health insurance costs without violating federal law.

A group (also known as "employer-sponsored") health insurance plan covers an individual and their family members.  Unlike individual health insurance, group health insurance is purchased by an individual (or family member) indirectly through the individual's (or family member's) employer.  Group health insurance is dependent on an individual's (or family member's) employment.

Group health insurance plans are declining in the United States.  The number of people covered by group health insurance plans has substantially declined—less than 50% of small businesses offer group health insurance today.

The Health Care Reform bill requires certain employers to offer health insurance, else pay a tax penalty:

Last month, Professor Pilzer put up a post suggesting that Health Care Reform will cause employers to drop their health benefits programs.