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U.S. workers receive a wide range of employee benefits.

In 1991, employer-provided benefits accounted for nearly 30 percent of compensation costs. Now, for the first time, comprehensive data are available on the extent of employer-provided benefits available to employees throughout the U.S. economy. The Bureau of Labor Statistics Employee Benefits Survey provides data on the incidence and details of benefit plans offered to employees.

Originally established in 1979, the Employee Benefits Survey has expanded during the past decade to represent more components of the civilian nonfarm economy: small private establishments, State and local governments, part-time employees, and other employees. Data on households and the Federal Government are excluded.

Three parts of the civilian, nonfarm labor force are studied altemately.(1) In even-numbered years, the survey examines benefits available in State and local governments and small private establishments (that is, those with fewer than 100 employees); in odd-numbered years, the survey covers medium and large private establishments.

Data presented in this report are from surveys conducted in 1989 and 1990.(2) About 65 million full-time private industry employees, and 13 million State and local government employees are covered.(3) While the focus is on benefit availability among all workers, obvious differences between small and large establishments or between private industry and government are addressed.

Medical care and life insurance

Employer-provided medical care coverage has been the subject of considerable attention recently. Slightly more than 80 percent of full-time employees received medical care benefits at least partly financed by their employer during the 1989-90 period. (See table 1.) This represents 64 million of the 78 million fulltime employees covered by the survey.

Medical care plans are financed under arrangements which vary depending on whether coverage is for a single participant or for a family. During the period 1989-90, employers paid the entire cost of medical care benefits for three-fifths of participants if individual coverage were chosen, while the remainder shared the costs with their employers. Employers paid the entire cost of family medical care coverage for one-third of participants. (See table 2.)

Medical care benefits in private industry are provided to four-fifths of fulltime employees, while dental care benefits are available to half of all fulltime employees in this sector. Governments have a higher incidence of these benefits. Nine-tenths of full-time State and local government employees have medical care benefits and three-fifths have dental care benefits provided by their employer.

A closer examination of the private sector shows that coverage for medical care benefits varies greatly by establishment size. In medium and large establishments, 9 of 10 employees receive a medical care benefit from their employer; in small establishments, 7 of 10 employees have such a benefit. Dental care benefits are provided to two-thirds of employees in medium and large establishments and to one-third of employees in small establishments.

Among occupational groups in the private sector, white-collar employees participate in health care benefits more often than do blue-collar employees. A little more than 8 of 10 white-collar employees have health care benefits, compared with 3 of 4 blue-collar employees. Dental care benefits are also more prevalent among white-collar employees.

The incidence of life insurance varies little between the private and public sectors. Overall, eight-tenths of all full-time employees are provided life insurance benefits. A little more than one-tenth of employees receiving a life insurance benefit are required to pay part of their premium. In the private sector, employees in larger establishments nearly always receive life insurance benefits, while two-thirds of employees in smaller establishments have such coverage.

Leave benefits

The most prevalent benefit provided by employers is paid leave. Nearly ninetenths of full-time employees receive paid vacations and holidays. These benefits are most frequently provided to private sector workers, especially whitecollar employees.

The incidence of paid holidays and vacations is lower in State and local governments, attributable mainly to the low incidence of such benefits among teachers. Teachers are typically employed and paid for a fixed number of days----such as 180 schooldays per year. This work schedule procedure eliminates vacation leave and some holidays for many teachers. State and local government employees, other than teachers, do receive vacations and holidays; two-thirds of them are provided vacation leave and three-quarters have paid holidays. Other frequently observed paid leave benefits available to all workers include funeral leave, which is slightly more prevalent in the private sector, and sick leave, which is more prevalent in the public sector.

A benefit recently receiving attention throughout the United States pertains to the time taken by employees for the birth or care of their children. Unpaid maternity leave is available to 31 percent of full-time employees, and unpaid paternity leave is available to 16 percent. Half of State and local government employees could receive unpaid matemity leave and one-third could receive unpaid paternity leave. Among private sector employees, unpaid maternity (27 percent) and paternity (13 percent) leave is less prevalent. Paid parental leave is rarely provided.

Retirement plans

Retirement income is available from a variety of sources. For all private sector workers and many government workers, Social Security is available--funded through required employer and employee contributions. Many employers voluntarily provide retirement benefits beyond Social Security; twothirds of full-time employees receive such a benefit from their employer.

The most prevalent type of retirement benefit is the defined benefit pension, which specifies a formula for calculating an employee's pension. Defined benefit pensions are offered to half of all fulltime employees. These plans are more prevalent among government workers, where nine-tenths of all participants receive this benefit, compared with fourtenths of private sector employees.

The financing of a defined benefit pension varies greatly between the two sectors of the economy the survey studied. Overall, of the employees who participate in a defined benefit pension, three-fourths have their benefit wholly financed by theft employer. In the public sector, three-fourths of defined benefit pension plan participants are required to contribute toward plan costs. In contrast, nearly all defined benefit pension participants in the private sector receive their plan at no cost to the employee.

Another type of retirement benefit is a defined contribution plan, which specities the contribution an employer and an employee must make to the plan, but does not guarantee what future benefits will be. One-third of the employees covered by the survey are enrolled in at least one defined contribution plan. Fourtenths of private sector employees participate in this benefit, while one-tenth of State and local government employees take part in these plans. The Employee Benefit Survey collected data on six defined contribution plans: savings and thrift, deferred profit sharing, employee stock ownership, money purchase pensions, stock bonuses, and Simplified Employee Pensions.(4)

New benefits

Among new benefits emerging in the work force arena, flexible benefits plans have received considerable attention. Flexible benefits plans, also known as cafeteria plans, allow employees to choose among various benefits. For example, an employee may have a choice of medical care plans, different levels of life insurance protection, extra vacation days, or cash in lieu of certain benefits. One of twenty surveyed employees are participants in a flexible benefits plan. Reimbursement accounts, which may be part of a flexible benefits plan or provided independently, allow employees to set aside pretax dollars to pay for particular benefits. Nearly two-tenths of all fulltime employees participate in reimbursement accounts. Flexible benefits plans are most prevalent among private sector, white-collar employees, while reimbursement accounts are found more often among State and local government employees. Reimbursement accounts are typically funded by employees.

THESE NEW DATA On benefits in the work force can now provide a gauge to evaluate the composition of and variation in benefits in the private and public sectors. Information on plan details is essential for further investigation into this subject. Data on the incidence of employee benefits and selected provisions for all fulltime and part-time workers from the 1990 and 1991 Employee Benefits Surveys will be available in early 1993.(5)

Footnotes

1 From 1979 to 1986 and in 1988, the Employee Benefits Survey was conducted in medium and large establishments only. In 1987, the first Employee Benefits Survey in State and local governments was conducted. The expansion of the Employee Benefits Survey is part of a broader initiative, funded by Congress, and known as the white-collar pay and benefits survey.

2 A few changes in surveys between 1989 and 1990 may affect data comparisons. Prior to 1990, executive management and traveling operating employees, such as airline pilots, were excluded from the survey. Also, surveys prior to 1990 were based on benefits data for all workers in a sampled establishment; beginning in 1990, data were collected for a representative sample of occupations in each establishment. Additional information on the survey is available in Employee Benefits in Small Private Establishments, 1990, Bulletin 2388 (Bureau of Labor Statistics, 1991 ).

3 Data on benefits for another 20 million parttime workers in private industry and State and local governments are not included.

4 A Simplified Employee Pension is a retirement plan available only to small employers. It allows an employer to establish a retirement account, similar to an Individual Retirement Account, in the name of an employee.

5 Data on plan provisions are provided separately by survey sector through the bulletins and articles published by the Employee Benefits Survey, Complete survey details are available in Employee Benefits in Medium and Large Firms, 1989, Bulletin 2363 (Bureau of Labor Statistics, 1990); Employee Benefits in Small Private Establishments, 1990, Bulletin 2388 (Bureau of Labor Statistics, 1991); and Employee Benefits in State and Local Governments, 1990, Bulletin 2398 (Bureau of Labor Statistics, 1992). Recent publications include the April 1991 issue of the Monthly Labor Review, which discusses health care and profit-sharing issues, and an article in the August 1991 issue which investigates pension benefits.

A compendium of Monthly Labor Review articles based on Employee Benefits Survey data from 1982-89, and covering detailed provisions of employee benefits, is available. See Employee Benefits Survey: An MLR Reader, Bulletin 2363 (Bureau of Labor Statistics, 1990).

Glenn M. Grossman is an economist in the Division of Occupational Pay and Employee Benefit Levels, Bureau of Labor Statistics.
COPYRIGHT 1992 U.S. Bureau of Labor Statistics
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Author:Grossman, Glenn M.
Publication:Monthly Labor Review
Date:Sep 1, 1992
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