The real driver of health benefits tied to employment was that businesses were not allowed to give huge wage hikes during World War II. In order to compete for very scarce workers, businesses added a variety of benefits, including health insurance. Around this time, medicine actually started being effective, which has led to an ever increasing set of costs (now we use million dollar machines and whacky drugs by the bucket load, when it the past they just tried to keep you comfortable or stop you from bleeding to death).
As the cost of health benefits increased, corporations lobbied for tax-exemptions providing this benefit. Congress gladly obliged because it seemed to be an effective way to get everyone (who mattered) insured. This really cemented our current system in place.
> was that businesses were not allowed to give huge wage hikes during World War II
Interestingly war industry wages far as I saw were specified by the government contracts. They were good wages compared to pre WWII. My uncle busted out in WWII because all of his employees left for the shipyards.
As the cost of health benefits increased, corporations lobbied for tax-exemptions providing this benefit. Congress gladly obliged because it seemed to be an effective way to get everyone (who mattered) insured. This really cemented our current system in place.