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Employee compensation reports to include detail by type of insurance.

Albert Schwenk is an economist in the Division of Employment Cost Trends, Bureau of Labor Statistics.

In March 1991, health insurance cost employers in private industry an average 92 cents per employee hour worked. This amounts to about 91 percent of all insurance costs; life insurance accounted for about 5 percent, and sickness and accident for the remaining 4 percent.

These proportions held across broad categories of industry, occupation, geographic region, union status, and establishment employment size.

Although the Bureau has published employer costs per hour worked for wages and benefits since 1987, data until now have been provided only for all insurance items combined? This report provides the March 1991 cost per hour worked for the individual insurance benefits. Individual insurance benefit costs also will be included in the annual report, Employer Costs for Employee Compensation, beginning with the March 1992 data scheduled for release in June.

Estimates of the cost per hour worked for individual insurance benefits were not published in 1987 because survey respondents frequently provided cost data only for all insurance benefits combined. This situation improved in subsequent years.

Individual insurance benefit cost estimates can now be published because improved data collection has substantially reduced the proportion of respondents who do not provide costs by type of insurance benefits. In addition, an examination of costs by type of insurance for respondents who report such data showed that the proportion of total expenditures accounted for by each type of insurance benefit is stable. This stability makes it possible to use data from the establishments that provide benefit costs to apportion the combined insurance costs accurately for establishments that cannot provide the data separately.

Table 1 presents the insurance costs forMarch 1991. Health insurance clearly dominates insurance cost to employers, accounting, on average, for more than 90 percent of the cost, with relatively little variation by industry, occupation, region, union status, or employment size.

Footnote

1 The data by industry and occupation were introduced and explained by Felicia Nathan in "Analyzing employer's costs for wages, salaries, and benefits," Monthly Labor Review, October 1987, pp. 3-11. Data by region and union status were first published in 1988; data by establishment size first appeared in 1990. The compensation cost level data are obtained from the Employment Cost Index (ECI) program.
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Author:Schwenk, Albert
Publication:Monthly Labor Review
Date:May 1, 1992
Words:380
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