Wage and price controls then in effect prevented employers from giving raises, but because the government regarded health insurance as a tax-free benefit, employers used it to fatten compensation packages for workers.
Employers are taxed for health insurance and hate to pay for it. 
mnli hypothesis: Employers are taxed for health insurance and hate to pay for it.  premise: Wage and price controls then in effect prevented employers from giving raises, but because the government regarded health insurance as a tax-free benefit, employers used it to fatten compensation packages for workers.