Opinion: Employers don’t pay for contraceptive care Trump wants to take away — you do

Employers who don’t want their health insurance plans to cover contraceptives for women are kidding themselves about who’s actually paying for the policies. Short version: It’s not them; it’s their workers.

Nevertheless, the Trump administration is readying a proposal to let employers opt out of the contraceptive mandate for religious or moral reasons, which makes little sense economically. It would give your employer more power over money that is, for all intents and purposes, yours.

The money that your employer spends on health insurance is no more or less theirs than the money they spend on your salary, 401(k) matching contributions, life insurance policy and commuter benefits. It’s all part of the cost associated with you as an employee. Put another way, it’s compensation that your employer decided to put into something other than wages, hoping that it will help them compete better for talent.

That’s not to say employers’ contributions are small. According to the nonpartisan Kaiser Family Foundation, employers covered 71% of their workers’ premiums on average in 2016. But the Internal Revenue Service still considers the contribution your employer makes to your insurance to be part of your income — it’s just not taxed, thanks to an exclusion in federal law for group health premiums.

So when the Obama administration issued a rule requiring all new health insurance policies to cover contraceptives for women with no out-of-pocket costs (with an exception for those offered by religious groups), it wasn’t forcing employers to subsidize those products and services as much as it was requiring the workers who signed up for policies to do so. Even in the case of self-insured plans, where employers may end up paying more claims in a given year than they collected in premiums, the risk of the cost of contraceptive coverage exceeding the premiums paid is vanishingly small. Remember, one of the reasons insurers have supported the contraceptive mandate is that it helps avoid the much larger cost of maternity care.

Once you recognize that you’re essentially paying the full cost of your health benefits at work, you can begin to see how disempowering the Trump administration’s proposal is.

Under the leaked draft of the plan, which would take effect as soon as it is formally submitted to the Federal Register, any employer with a religious or moral objection to contraception can drop that coverage from their workers’ policies. That’s a bit like your boss telling you that she won’t match your 401(k) contributions if you choose a mutual fund that holds oil company stocks. Those matching dollars aren’t her money — they were promised to you so that you’d take the job.

And besides, the Trump proposal would allow publicly traded companies to opt out of the mandate. Whose religious or moral beliefs should hold sway in those companies? The chief executive’s? The board of directors’? The shareholders’?

The draft proposal argues that women who need help buying contraceptives still can get it from federally subsidized family planning programs, conveniently omitting the fact that the administration is trying to defund the main source of that assistance, Planned Parenthood (although, in fairness, the budget proposes no change in the amount of family planning aid available to other providers). But again, this isn’t a question of whether women will be able to obtain birth control. It’s whether their employer can deny them the ability to get it in the most affordable way, at their own expense.

There’s a lot of fiction surrounding the economics of healthcare — for example, the idea that preventive services are “free” just because there’s no out-of-pocket costs. As noted above, there are costs associated with the contraceptive mandate, and they’re borne by the people who buy insurance. (Although several studies based on theoretical models suggest that the mandate saves money over the long run, there are measurable expenses in the short term.) But it’s a surface truth that employers pay any of those costs. The underlying reality is that workers pay the full premium, directly and through foregone wages. The IRS recognizes this, but the Trump administration does not.

jon.healey@latimes.com

Twitter: @jcahealey