Currently, the majority of privately insured individuals in the U.S. are insured through their employers. This has significant implications for competition and the ability of a "competitive" insurance industry to assure marginal-cost pricing. The central barrier to competition arises when employers restrict their employees' ability to select among insurance carriers. Several models of insurer profit maximization are explored which demonstrate that supra-marginal cost pricing is likely to persist even when the insurance market appears "competitive.".