More about benefits is driven by the tax code than probably should be. But the issue is much more that many people can't simply buy the same insurance offered by their employer (whether with tax-advantaged dollars or otherwise)--and it's an expensive benefit, which means a lot of people feel they can't afford it unless someone else is paying.

Now, sure, supposedly salaries would go up if the company no longer offered health insurance but there are lots of moving parts and people and any such transition would be difficult.