TEXT Table 1. Percent of full-time employees participating in selected employee benefit Table 1. Percent of full-time employees participating in selected employee benefit Table 2. Medical care benefits: Percent of participants by fee arrangement, full-time Table 3. Medical care benefits: Percent of participants by required contribution, Table 4. Percent of part-time(1) employees participating in selected employee benefit Table 4. Percent of part-time(1) employees participating in selected employee benefit Table 5. Percent of full-time employees participating in selected employee benefit Table 5. Percent of full-time employees participating in selected employee benefit Technical contact: USDL: 95-367 Staff 202--606-6222 Media contact: For release: 10:00 a.m. EDT Kathryn Hoyle 202--606-5902 Thursday, September 14, 1995 BLS REPORTS ON EMPLOYEE BENEFITS IN SMALL PRIVATE INDUSTRY ESTABLISHMENTS, 1994 Most full-time employees of small establishments (fewer than 100 workers) in private industry are covered by diverse employee benefits in addition to their wages, as shown by 1994 data issued by the Department of Labor's Bureau of Labor Statistics. For example: Two out of three (66 percent) full-time workers in small establishments participated in a health benefits plan provided by their employers; Seven out of eight (88 percent) had paid vacation plans, and four out of five (82 percent) had paid holidays; One out of two (50 percent) had paid sick leave, and one out of four (26 percent) had employer-provided sickness and accident insurance plans; Three out of five (61 percent) participated in life insurance programs provided by their small-establishment employers; and Two out of five (42 percent) participated in retirement plans. Data are available on the incidence of 30 different employee benefits covered by the Employee Benefits Survey. For 15 major benefits, detailed data are available on specific provisions of the benefit plans for full-time employees. Data also are available on the incidence of benefits for part-time employees and for employees classified into major occupational groups: Professional, technical, and related employees; clerical and sales employees; and blue-collar and service employees. Though not shown in this release, data are available by broad geographic region, by industry sector of the employer, and by union and nonunion status. The 1994 Employee Benefits Survey of small private establishments covered an estimated 48.6 million employees (35.9 million full time, 12.7 million part time) in the private economy, excluding farms and private households. This represented about 55 percent of the total private nonfarm economy employment. The survey covered employees in small independent businesses, as well as employees in small establishments that are part of larger businesses. Three out of four employees covered by the survey work in small independent businesses. Complete survey results will be published this fall in a BLS bulletin, Employee Benefits in Small Private Establishments, 1994. Health benefits Full-time employee participation in employer-provided health plans changed over the 2 years since the last small establishment survey. Employee participation was lower, at 66 percent, in 1994 than 2 years earlier (71 percent). The trend away from traditional fee-for-service plans was significant in the small establishments surveyed, as had been observed in larger private sector firms. Just over one-half of the employees in medical plans were covered by traditional fee-for-service plans in 1994, down from the two-thirds recorded in 1992 (55 versus 68 percent). Traditional fee-for-service health plans allow participants unrestricted choice in selecting the doctors and facilities that will supply their care; the plan reimburses either the provider or the individual for some or all of the cost. The remaining 45 percent of full-time employees in medical plans were enrolled in non-traditional health plans in 1994. Twenty-four percent received their medical benefits from preferred provider organizations (up from the 18 percent recorded in 1992); and 19 percent were enrolled in prepaid health maintenance organizations (up from 14 percent). Preferred provider organizations are a type of fee-for-service plan that offers higher reimbursement rates if services are provided from a network of selected health care providers (such as hospitals and physicians), although participants may choose any provider. Health maintenance organizations provide prepaid services from a selected group of doctors and facilities. Coverage is fully prepaid, or is provided for only a nominal copayment. Services provided by doctors and facilities outside the health maintenance organization are not covered, or are covered at reduced rates. Eighty-six percent of participants were enrolled in health plans with "managed care" provisions - measures aimed at controlling health care costs and usage. These workers were evenly divided between those enrolled in preferred provider and health maintenance organizations and those enrolled in traditional fee-for-service plans with managed care features. The most common of these features require or encourage performing necessary tests prior to hospital admissions, certifying the need for hospitalizations, and obtaining second surgical opinions. Another trend in controlling health care benefit plan costs has been the imposition of deductible and coinsurance payment responsibilities on the patient beginning the first day of a hospital confinement. For example, in other than health maintenance organization plans, in 1994 these payments were required of the vast majority of medical plan participants in small establishments for hospital room and board (72 percent), inpatient surgery (85 percent), and inpatient physician visits (85 percent). A deductible is the amount of covered expenses that an individual must pay before any charges are paid by the medical care plan. Once the deductible is met, plans pay a percentage of covered expenses, known as the coinsurance percentage or rate. One-half (52 percent) of participating employees had to contribute to the cost of their individual medical coverage, a somewhat higher proportion than in 1992 (47 percent). Three-quarters contributed to the cost of their family coverage, about the same proportion as in 1992. From 1992 to 1994, average monthly employee contributions increased from $37 to $41 for individual coverage and from $151 to $160 for family coverage. Retirement benefits About two out of five (42 percent) full-time employees in small establishments participated in employer-provided retirement plans -- a slightly lower proportion than 2 years earlier (45 percent). This reflected declining participation in defined benefit plans (22 versus 15 percent) over the period, coupled with stable participation in defined contribution plans (34 percent in 1994). Defined benefit plans characteristically specify a formula for determining an employee annuity at retirement. Alternately, defined contribution plans specify the employer's contributions, but do not predetermine the actual retirement dollar benefit. Defined contribution plans include savings and thrift plans (covering 17 percent of employees), deferred profit sharing plans (13 percent), money purchase pensions (5 percent), as well as employee stock ownership and simplified employee pension plans (1 percent each). Family leave benefits The Employee Benefits Survey measured the incidence of formal family leave benefits for the first time in 1994. Previously, the survey estimated parental leave, generally in the form of maternity and paternity leave. The passage of the Family and Medical Leave Act of 1993 created a federal mandate for employers to provide employees with up to 12 weeks of unpaid leave for the birth or adoption of a child and for family illness (employee, child, spouse or parent). Generally, these provisions apply to employees with 1 year of service who work 1,250 hours during the year and who are employed by companies with 50 or more workers. There is no mandate to provide paid leave. In 1992, prior to passage of the Family and Medical Leave Act, almost one out of five (18 percent) full-time employees in small establishments had unpaid maternity or paternity benefits available to them. In 1994, almost one out of two (47 percent) had an unpaid family leave benefit. In both years, paid benefits were rare. Other findings The incidence of employee benefits for full-time employees in small establishments was roughly uniform across occupations, with three notable exceptions -- health insurance, sick leave, and retirement benefits. For each of these benefits, employees in professional and technical occupations were significantly more likely to participate in the benefit than were employees in blue-collar and service occupations. Participation by employees in clerical and sales occupations fell between. Among the factors that may influence the composition of employee benefits in small establishments is their reduced ability, compared with larger employers, to defray high plan administration costs commonly associated with certain benefits. For example, in 1994, full-time employee participation in defined benefit pension plans amounted to 9 percent in small establishments that were unaffiliated with larger companies. The participation rate was 56 percent for full-time employees of private establishments with 100 or more employees in 1993. This same relationship exists for formal flexible benefit plans (1 percent compared with 12 percent) and employee reimbursement accounts (11 percent compared with 52 percent). Formal flexible benefit plans allow employees to customize their total benefit packages, choosing from options within certain guidelines set by the employer. Flexible benefit plans also are known as cafeteria benefit plans. Reimbursement accounts, also called flexible spending accounts, let employees pay for expenses not covered by their usual benefit package with pretax contributions to a fund established for this purpose. Part-time employees in small establishments were far less likely to be covered in the benefit programs. The most common benefits for part-time employees were paid leave benefits which could be prorated to reflect the shorter workweeks of the part-time employees. Benefits with costs that could not be prorated easily were less likely to cover part-time employees. For example, the incidence rates for paid vacations and holidays for part-timers, at 31 and 26 percent, were roughly a third of the corresponding rates for full-time workers. However, the participation rate of part-time workers in employer-provided health benefits was just a tenth that of full-time workers (7 versus 66 percent). TECHNICAL NOTE The Employee Benefits Survey (EBS) data are collected jointly with the BLS Employment Cost Index (ECI). The ECI provides quarterly data on the changes in employers' costs of wages, salaries, and employee benefits. In addition, data on the average costs per hour worked of compensation components are published annually from the ECI. The sample of establishments from which the ECI and EBS data are collected is updated periodically. Each year, new sample establishments in selected industries are introduced into the survey, while older sample establishments are removed from the survey. In addition, a group of newly opened establishments in all industries is included in the EBS sample to ensure representation of the current mix of establishments by longevity. Benchmark adjustments are applied to the data to estimate current employment in each major industry sector. More details on sampling and estimation procedures will appear in the Technical Note to the bulletin, Employee Benefits in Small Private Establishments, 1994, which will be published this fall. Benefits data are available for all covered employees and separately for three broad occupation groups: Professional, technical, and related employees; clerical and sales employees; and blue-collar and service employees. Definitions of these occupation groups may be found in the tables at the end of this release. Data are also available for full-time and part-time employees. Workers were classified as either full-time or part-time in accordance with practices in the surveyed establishments. The EBS is collected on a 2-year cycle. During 1994, data were collected on benefits provided to workers in small private establishments (employing fewer than 100 workers) and to workers in state and local government establishments. These will be surveyed again in 1996. In odd numbered years (e.g., 1993 and 1995), data are collected on the benefits provided to workers in medium and large private establishments (employing 100 or more workers). Detailed tabulations of the benefit provisions, in addition to estimates of sample error on all data, are currently being developed for the 1994 small private establishment survey. When the analyses of these data are complete, they will be published in the bulletin, Employee Benefits in Small Private Establishments, 1994. Benefits data for workers in medium and large private establishments were last published in BLS Bulletin 2456, Employee Benefits in Medium and Large Private Establishments, 1993. Corresponding data for workers in state and local government establishments were last published in BLS Bulletin 2444, Employee Benefits in State and Local Governments, 1992. Public sector data for 1994 will be released in a news release and in another bulletin, in late fall 1995. A summary of employee benefits data for the entire private and state and local government sectors appears in the pamphlet, Employee Benefits in the United States, 1992-93. Table 1. Percent of full-time employees participating in selected employee benefit programs,(1) small private establishments, 1994 Professional, Clerical and Blue-collar Employee benefit program All employees technical, and sales and service related employees(3) employees(4) employees(2) Paid time off Holidays........................ 82 91 89 75 Vacations....................... 88 92 93 83 Personal leave.................. 13 21 17 7 Funeral leave................... 50 58 55 45 Jury duty leave................. 58 74 66 48 Military leave.................. 17 23 19 13 Sick leave...................... 50 69 61 36 Family leave.................... 2 5 2 1 Unpaid time off Family leave.................... 47 53 50 43 Insurance Sickness and accident insurance. 26 27 27 25 Long-term disability insurance.. 20 36 27 10 Medical care.................... 66 80 70 57 Dental care..................... 28 40 31 22 Life Insurance.................. 61 73 68 52 Retirement All retirement(5)............... 42 53 47 35 Defined benefit pension......... 15 16 16 15 Defined contribution............ 34 45 39 26 Types of plans: Savings and thrift............ 17 23 20 13 Deferred profit sharing....... 13 16 17 10 Employee stock ownership...... 1 2 1 1 Money purchase pension........ 5 9 5 4 Simplified employee pension... 1 1 1 1 401(k) plans with employer contribution................ 20 28 23 15 See footnotes at end of table. Table 1. Percent of full-time employees participating in selected employee benefit programs,(1) small private establishments, 1994 - Continued Professional, Clerical and Blue-collar Employee benefit program All employees technical, and sales and service related employees(3) employees(4) employees(2) Other benefits Flexible benefits plans......... 3 2 5 2 Reimbursement accounts.......... 19 28 23 13 Child care...................... 1 2 1 1 1 Except for family leave and reimbursement accounts, benefits paid for entirely by the employee were excluded from the tabulations. 2 Includes professional, technical, executive, and administrative occupations. 3 Includes clerical, administrative support, and sales occupations. 4 Includes production, craft, repair, laborer, and service occupations. 5 Includes defined benefit pension plans and defined contribution retirement plans. Some employees participated in both types of plans. NOTE: Workers reported in family leave plans and the category, other benefits, are eligible for these benefits, but may not participate. For all other benefits reported, workers participate in the plans. Table 2. Medical care benefits: Percent of participants by fee arrangement, full-time employees, small private establishments, 1992 and 1994 Professional, Clerical and Blue-collar Type of fee arrangement All employees technical, and sales and service related employees employees employees 1992 Total........................... 100 100 100 100 Fee-for-service................. 68 63 71 68 Health maintenance organization. 14 14 13 16 Preferred provider organization. 18 24 16 16 Exclusive provider organization. (1) (1) (1) (1) 1994 Total........................... 100 100 100 100 Fee-for-service................. 55 53 55 57 Health maintenance organization. 19 20 19 20 Preferred provider organization. 24 27 24 23 Exclusive provider organization. 1 (1) 2 1 1 Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dashes indicate no employees in this category. Table 3. Medical care benefits: Percent of participants by required contribution, full-time employees, small private establishments, 1994 Professional, Clerical and Blue-collar Employee contributions All employees technical, and sales and service related employees employees employees Individual coverage Total........................... 100 100 100 100 Employee contribution required.. 52 50 55 51 Employee contribution not required..................... 46 48 43 47 Not determinable................ 2 3 2 2 Family coverage Total........................... 100 100 100 100 Employee contribution required.. 75 76 79 70 Employee contribution not required..................... 19 17 15 24 Not determinable................ 6 7 6 6 Average monthly contribution(1) Individual...................... $40.97 $46.83 $40.98 $38.35 Family.......................... 159.63 180.73 159.56 148.84 1 The average monthly contribution includes those plans requiring the employee to pay a flat monthly contribution. NOTE: Because of rounding, sums of individual items may not equal totals. Table 4. Percent of part-time(1) employees participating in selected employee benefit programs,(2) small private establishments, 1994 Professional, Clerical and Blue-collar Employee benefit program All employees technical, and sales and service related employees(4) employees(5) employees(3) Paid time off Holidays........................ 26 29 40 18 Vacations....................... 31 31 44 24 Personal leave.................. 4 2 7 3 Funeral leave................... 15 19 21 11 Jury duty leave................. 25 17 27 25 Military leave.................. 3 4 6 2 Sick leave...................... 9 14 12 7 Family leave.................... (6) 1 1 (6) Unpaid time off Family leave.................... 28 17 33 27 Insurance Sickness and accident insurance. 17 20 18 16 Long-term disability insurance.. 1 3 1 (6) Medical care.................... 7 11 9 5 Dental care..................... 3 2 5 2 Life Insurance.................. 6 4 11 4 Retirement All retirement(7)............... 10 9 17 7 Defined benefit pension......... 5 2 8 3 Defined contribution............ 6 7 11 4 Types of plans: Savings and thrift............ 3 1 5 1 Deferred profit sharing....... 3 2 5 2 Employee stock ownership...... (6) (6) (6) 1 Money purchase pension........ 1 3 1 1 Simplified employee pension... (6) 1 1 1 401(k) plans with employer contribution................ 3 2 5 1 See footnotes at end of table. Table 4. Percent of part-time(1) employees participating in selected employee benefit programs,(2) small private establishments, 1994 - Continued Professional, Clerical and Blue-collar Employee benefit program All employees technical, and sales and service related employees(4) employees(5) employees(3) Other benefits Flexible benefits plans......... (6) 1 1 (6) Reimbursement accounts.......... 5 3 4 6 Child care...................... 1 3 1 1 1 Employees are classified as part time in accordance with practices of surveyed establishments. 2 Except for family leave and reimbursement accounts, benefits paid for entirely by the employee were excluded from the tabulations. 3 Includes professional, technical, executive, and administrative occupations. 4 Includes clerical, administrative support, and sales occupations. 5 Includes production, craft, repair, laborer, and service occupations. 6 Less than 0.5 percent. 7 Includes defined benefit pension plans and defined contribution retirement plans. Some employees participated in both types of plans. NOTE: Workers reported in family leave plans and the category, other benefits, are eligible for these benefits, but may not participate. For all other benefits reported, workers participate in the plans. Where applicable, dashes indicate no employees in this category. Table 5. Percent of full-time employees participating in selected employee benefit programs,(1) small private establishments, 1992 and 1994, small independent businesses, 1994, and medium and large private establishments, 1993 Small private Small private Small Medium and Employee benefit program establish- establish- independent large private ments, 1992 ments, 1994 businesses, establish- 1994 ments, 1993 Paid time off Holidays........................ 82 82 80 91 Vacations....................... 88 88 86 97 Personal leave.................. 12 13 11 21 Funeral leave................... 50 50 42 83 Jury duty leave................. 58 58 51 90 Military leave.................. 21 17 11 53 Sick leave...................... 53 50 44 65 Family leave(2)................. 2 2 2 3 Unpaid time off Family leave(2)................. 18 47 37 60 Insurance Sickness and accident insurance. 26 26 24 44 Long-term disability insurance.. 23 20 14 41 Medical care.................... 71 66 62 82 Dental care..................... 33 28 23 62 Life Insurance.................. 64 61 54 91 Retirement All retirement(3)............... 45 42 35 78 Defined benefit pension......... 22 15 9 56 Defined contribution............ 33 34 29 49 Types of plans: Savings and thrift............ 14 17 12 29 Deferred profit sharing....... 16 13 13 13 Employee stock ownership...... 1 1 1 3 Money purchase pension........ 5 5 5 8 Simplified employee pension... 1 1 1 1 See footnotes at end of table. Table 5. Percent of full-time employees participating in selected employee benefit programs,(1) small private establishments, 1992 and 1994, small independent businesses, 1994, and medium and large private establishments, 1993 - Continued Small private Small private Small Medium and Employee benefit program establish- establish- independent large private ments, 1992 ments, 1994 businesses, establish- 1994 ments, 1993 Retirement 401(k) plans with employer contribution................ 19 20 15 36 Other benefits Flexible benefits plans......... 2 3 1 12 Reimbursement accounts.......... 14 19 11 52 Child care...................... 2 1 1 7 1 Except for family leave and reimbursement accounts, benefits paid for entirely by the employee were excluded from the tabulations. 2 Family leave prior to 1994 included only maternity and/or paternity leave. 3 Includes defined benefit pension plans and defined contribution retirement plans. Some employees participated in both types of plans. NOTE: Workers reported in family leave plans and the category, other benefits, are eligible for these benefits, but may not participate. For all other benefits reported, workers participate in the plans. Where applicable, dash indicates no employees in this category.