The rate has increased by a third since 2021 and is especially high among workers with chronic medical conditions.²
We call this job lock, one of those bloodless policy expressions that makes a profound restriction on human freedom sound like a minor defect in an employee-benefits manual.
Job lock is the woman who wants to start a business but remains in work she has come to hate. It is the father who can’t reduce his hours to care for a disabled child. It is the employee with cancer who turns down a better opportunity because the new company’s insurance may not cover the same doctors or drugs. It is the older worker who has enough money to retire but remains on the payroll because one serious illness before Medicare eligibility could erase a lifetime of savings.
It isn’t particularly good for employers, either. Companies retain people who would rather be somewhere else, while growing businesses have trouble attracting experienced workers who are afraid to leave the insurance they already have. Career decisions are shaped not by where someone can contribute most, but by which company controls the family’s access to doctors.
The strange part is that the money keeping workers trapped is part of the compensation employers devote to employing them.
We still describe employer-paid health insurance as though it were a gift. The company “provides” it. The employer “pays” for it. But the money comes from the total cost of employing that worker. It could have been paid as salary, a retirement contribution or another benefit. Instead, it is sent to an insurance company.
The Congressional Budget Office describes employer health-premium payments as a form of employee compensation.³ When insurance costs rise, employers don’t discover a new source of money. Over time, the cost is absorbed through some combination of lower wages, smaller raises, increased employee contributions, larger deductibles and reduced benefits.
No one would argue that an employer’s contribution to a 401(k) ceases to belong to the employee because the employer deposited it. Future employers may contribute different amounts, but the account belongs to the worker. Health insurance is treated differently. The contribution is part of compensation while the worker is employed, but the worker loses control of the benefit when the job ends.
In 2025, the average employer-sponsored family policy cost $26,993. Workers paid an average of $6,850 directly, leaving employers to contribute a little more than $20,000.⁴ The federal government also subsidizes the arrangement by excluding employer health contributions from taxable income. The Treasury Department estimates that tax preference will cost $296 billion in fiscal year 2026, making it one of the largest tax expenditures in the federal budget.⁵
We are spending hundreds of billions of dollars subsidizing health insurance that workers usually cannot choose, own or carry with them.
The usual political response is to propose another insurance plan. Democrats talk about a public option. Republicans talk about expanding private choice. Both promise competition and consumer control. But neither promise means much if choosing a different plan requires the worker to surrender the $10,000, $15,000 or $20,000 the employer is already contributing.
That isn’t choice. It is an invitation to buy the same benefit twice.
There is a better principle around which to organize reform: The worker chooses the insurance. Each employer contributes while the worker is employed there.
An employee who likes the company plan could keep it. Employers could continue negotiating group policies, and unions could continue bargaining for better coverage. Medicare, Medicaid and veterans’ health care would remain intact. No one would be forced into a government plan or required to abandon private insurance.
But every worker should also be able to apply the employer’s health contribution toward a qualified private plan or a national public option. The plan would be attached to the person rather than the company. When the worker moved to another job, the new employer would take over the contribution. The amount might change, just as salary, vacation and retirement benefits change, but the insurance wouldn’t automatically disappear.