Summary - Module Quiz 1c - Feldstein & Melnick Chapters 5 & 6 - Because employer-paid health insurance is not considered part of the employee's taxable income, Question 2 options: government tax revenues are increased by hundreds of billions of dollars. the value of this benefit is greater for high income employees. employees have an incentive to select lower-cost health plans. employers are able to purchase less health insurance than employees could purchase on their own