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, Table 3. Medical care benefits: Percent of participants by required Table 4. Percent of full-time and part-time(1) employees participating in selected employee benefit Table 4. Percent of full-time and part-time(1) employees participating in selected employee benefit Technical contact: USDL: 95-368 EBS Staff (202)606-6222 Media contact: FOR RELEASE: 10 A.M. (EST) Kathyrn Hoyle (202)606-5902 Thursday, September 14, 1995 BLS REPORTS ON EMPLOYEE BENEFITS IN STATE AND LOCAL GOVERNMENTS, 1994 The number of employees with medical care benefits in state and local governments who choose non-traditional health care plans continues to increase, according to a 1994 survey conducted by the U.S. Department of Labor's Bureau of Labor Statistics. About nine-tenths of full-time employees participated in employer-provided medical care plans in both 1994 and 1992, but enrollments continued to shift among the major types of plans. Non-traditional health care plans, such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs), covered 62 percent of the full-time employees with employer-funded medical care benefits in 1994, compared with 57 percent in 1992. Additionally, employers required a greater proportion of covered employees to contribute toward the cost of their coverage in 1994 than in 1992. The 1994 Employee Benefits Survey provides information on the incidence and characteristics of benefit plans for an estimated 15 million employees in state and local governments. Of that total, nearly 13 million employees were full time and about 2 million were part time. BENEFITS FOR FULL-TIME EMPLOYEES IN STATE AND LOCAL GOVERNMENTS As in 1992, the last time BLS conducted this survey, a large majority of full-time workers in state and local governments were provided paid sick leave, retirement plans, and life and health insurance in 1994. Paid holidays and vacations also were widely available to full-time government workers, except teachers. With a few notable exceptions, the incidence of these and other surveyed benefits remained stable (tables 1 and 4). The 1994 survey provides information on recent trends for a variety of employee benefits, that are summarized below. Medical Care Benefits Fee-for-service plans, the traditional way of providing medical care benefits, covered 38 percent of medical care participants in 1994, compared with 43 percent in 1992 and 61 percent in 1990 (table 2). Under such plans, individuals receive medical care from doctors and facilities that they choose; the plan reimburses either the provider or the individual for some or all of the cost. Seven-tenths of the workers covered by fee-for-service plans were required to seek approval from their plan before certain types of health care services were received. Such approval, broadly termed managed care, typically includes requirements for plan certification prior to hospitalization and for mandatory second surgical opinions. When such requirements are not met, the plan reduces or eliminates payments. The non-traditional types of plans described below include managed care features by definition. Preferred provider organizations (PPOs) covered 30 percent of full-time workers with medical care benefits, compared with 29 percent in 1992 and 17 percent in 1990. PPOs are a type of fee-for-service plan that offers individuals a higher benefit for services provided by a network of selected health care providers (such as hospitals and physicians), although participants may choose any provider. For example, a plan might pay 90 percent of charges for hospital services when received from a preferred provider and 80 percent for the same services when received outside the network. Additionally, 34 percent of PPO participants were subject to a lower plan deductible if they used a designated provider. For example, enrollees in PPOs may be subject to a yearly deductible of $100; however, if they go outside of the network, the deductible might be $200. Health maintenance organizations (HMOs), which covered 30 percent of full-time workers with medical care benefits in 1994, compared with 27 percent in 1992 and 22 percent in 1990, provide prepaid services from a selected group of doctors and facilities. Coverage is often in full, or is provided at a nominal fee, for example, $10 or less for an office visit. Care provided outside of the HMO may not be reimbursed, or may be reimbursed at a reduced rate, for the services rendered. One additional type of health care plan, exclusive provider organizations, covered 2 percent of medical care participants in 1994. These plans have arrangements with specific providers to offer medical services at lower prices similar to PPOs. Medical care received from other providers is not paid for by the plan. In 1994, about one-half of the full-time employees with medical coverage were required to contribute toward individual coverage; in cases where a set contribution was required, monthly premiums averaged $30, about the same as in 1992 (table 3). Seven-tenths of covered workers had to pay part of the cost for family coverage, averaging $150 per month or about $12 more per month than in 1992. Although the proportion of employees required to contribute to individual medical care coverage continues to grow, the rate of this growth has diminished since the 1990 survey. Additionally, average employee premium costs for individual coverage have nearly stabilized, and the rate of increase of premiums for family coverage has slowed. Retirement plans Nine-tenths of the full-time workers in state and local governments had retirement coverage through defined benefit pension plans. These plans specify a formula for determining an employee's annuity. Nearly two-thirds of the employees covered by pension plans were eligible for normal (unreduced) benefits at age 55 or earlier upon meeting a service requirement, usually 30 years. Benefits provided usually were based on a terminal earnings formula, which provides a pension equal to a percentage of the employee's annual pay averaged over the years with the highest income. Pension benefits averaged 1.9 percent of earnings times years of service. Nearly three out of four participants were required to help finance their pension plans, commonly contributing 5 to 8 percent of earnings. About 1 in 10 full-time employees participated in one or more defined contribution plans in 1994. These plans, which usually specify the employer's contribution, but cannot predetermine the employee's actual amount of benefits, include savings and thrift plans and money purchase pension plans. Most defined contribution plans required employee contributions. About three-fourths of defined contribution participants were in plans with salary reduction features, such as 401(k) and 403(b) plans. In such arrangements, income taxes on employee contributions to a retirement plan are deferred until the contributions are withdrawn. Family-Related Benefits The Employee Benefits Survey measured the incidence of formal family leave 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 (FMLA) 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, spouse, child, or parent). Generally, these provisions apply to employees with 1 year of service who work 1,250 hours during the year and are employed by establishments with 50 or more workers. There is no requirement to provide paid leave. Virtually all full-time state and local government employees were eligible for unpaid family leave in 1994. About one-third of covered employees were eligible for more than the mandated 12 weeks of benefits; the maximum overall benefit averaged about 6 months. In contrast, the 1992 survey, conducted prior to the FMLA, showed that three-fifths of full-time employees in governments had unpaid maternity leave available, with three-fourths of those also eligible to use the leave for paternity purposes; the maximum maternity leave averaged about 10 months. Several states continue to require employers to provide benefits that are considerably more generous than the FMLA requirement. Paid family leave continued to be rare in 1994. Nine percent of full-time employees in state and local governments were eligible for child care benefits subsidized by their employer, about the same as in 1992. This benefit includes both on-site or near-site child care facilities and reimbursement of employee child care expenses. A more prevalent means of assisting employees with child care expenses was through increasingly common reimbursement accounts (also known as Flexible Spending Accounts, or FSAs) which characteristically cover dependent care, health care premiums, or out-of-pocket health care expenses. Nearly two-thirds of full-time employees were eligible for such accounts, up from one-half in 1992. Most often, these accounts are funded solely by employee pretax dollars. BENEFITS FOR PART-TIME WORKERS IN STATE AND LOCAL GOVERNMENTS Paid sick leave was available to about two-fifths of the part-time state and local government workers, three-tenths participated in a health care plan, and three-fifths were in a retirement plan (table 4). Because of the limited incidence of benefits among part-time workers, plan provisions could not be examined to the same extent as for full-time workers. Two-tenths of part-time employees in state and local governments in 1994 received paid vacations and three-tenths received paid holidays. When these benefits were provided, they typically were similar to those of full-time workers, but prorated based on the work schedule of the part-time employee. 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 employer's cost of wages, salaries, and employee benefits. In addition, data on the cost per hour worked of compensation components are published annually from the ECI. The sample of establishments from which EBS and ECI 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. Benchmark adjustments were applied to the data to estimate current employment in each industry. More details on sampling and estimation procedures will appear in the Technical Note to Employee Benefits in State and Local Governments, 1994, which will be published this fall. Benefits data are available for all covered employees combined and separately for three broad occupational groups: White-collar employees, except teachers; teachers; and blue-collar and service employees. Data also are available for full-time and part-time employees. Workers were classified as either full time or part time in accordance with practices of surveyed establishments. The occupational groups are different from EBS government surveys prior to 1992. The Employee Benefits Survey is collected on a 2-year cycle. During 1994, data were collected on benefits provided to workers in state and local governments and separately for workers in small private establishments (fewer than 100 workers). The survey of medium and large private establishments (100 workers or more) is being conducted again in 1995. Availability of Survey Results Detailed tabulations of the benefit provisions, in addition to estimates of sample error on all data, are currently being developed. Upon completion of a thorough analysis of these data, the results will be published in the bulletin, Employee Benefits in State and Local Governments, 1994. Benefits data for employees in medium and large private establishments (those employing 100 workers or more) are currently available in Employee Benefits in Medium and Large Private Establishments, 1993 (Bureau of Labor Statistics, Bulletin 2456, November 1994). Data for employees in small private establishments will be forthcoming in Employee Benefits in Small Private Establishments, 1994 (Bureau of Labor Statistics). Combined 1992-93 data, which provide information on benefits provided to all workers in private industry and state and local governments, are available in the pamphlet Employee Benefits in the United States, 1992-93 (Bureau of Labor Statistics, March 1995.) 5 Table 1. Percent of full-time employees participating in selected employee benefit programs,(1) state and local governments, 1994 White-collar Blue-collar Employee benefit program All employees employees, Teachers and service except employees teachers Paid time off Holidays........................ 73 86 33 91 Vacations....................... 66 84 9 91 Personal leave.................. 38 30 58 31 Funeral leave................... 62 59 58 70 Jury duty leave................. 94 94 94 93 Military leave.................. 75 80 61 82 Sick leave...................... 94 93 96 94 Family leave.................... 4 4 3 6 Unpaid time off Family leave.................... 93 93 96 90 Insurance Sickness and accident insurance. 21 24 11 26 Long-term disability insurance.. 30 31 37 23 Medical care.................... 87 89 84 86 Dental care..................... 62 62 59 66 Life Insurance.................. 87 87 85 87 Retirement All retirement(2)............... 96 96 97 95 Defined benefit pension......... 91 90 93 91 Defined contribution............ 9 10 7 9 Types of plans: Savings and thrift............ 2 3 1 2 Money purchase pension........ 7 7 5 7 401(k) plans with employer contribution................ 7 8 5 8 See footnotes at end of table. Table 1. Percent of full-time employees participating in selected employee benefit programs,(1) state and local governments, 1994 - Continued White-collar Blue-collar Employee benefit program All employees employees, Teachers and service except employees teachers Other benefits Flexible benefits plans......... 5 5 7 3 Reimbursement accounts.......... 64 68 59 61 Child care...................... 9 11 5 9 1 Except for family leave and reimbursement accounts, benefits paid for entirely by the employee were excluded from the tabulations. 2 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, state and local governments, 1990, 1992, and 1994 Type of fee arrangement 1990 1992 1994 Total........................... 100 100 100 Fee-for-service................. 61 43 38 Health maintenance organization. 22 27 30 Preferred provider organization. 17 29 30 Exclusive provider organization. (1) 1 2 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, state and local governments, 1990, 1992, and 1994 Employee contributions 1990 1992 1994 Individual coverage Total........................... 100 100 100 Employee contribution required.. 38 43 47 Employee contribution not required..................... 62 57 49 Not determinable................ (1) 1 3 Family coverage Total........................... 100 100 100 Employee contribution required.. 65 72 71 Employee contribution not required..................... 35 28 22 Not determinable................ (1) (1) 7 Average monthly contribution(2) Individual...................... $25.53 $28.97 $30.20 Family.......................... 117.59 139.23 149.70 1 Less than 0.5 percent. 2 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. Where applicable, dashes indicate no employees in this category. Table 4. Percent of full-time and part-time(1) employees participating in selected employee benefit programs,(2) state and local governments, 1990, 1992, and 1994 Full-time employees Part-time employees Employee benefit program 1990 1992 1994 1990 1992 1994 Paid time off Holidays........................ 74 75 73 34 34 30 Vacations....................... 67 67 66 26 26 22 Personal leave.................. 39 38 38 20 17 18 Funeral leave................... 63 65 62 38 34 30 Jury duty leave................. 94 97 94 53 52 51 Military leave.................. 81 83 75 39 38 32 Sick leave...................... 95 95 94 49 45 42 Family leave(3)................. 1 1 4 1 1 1 Unpaid time off Family leave(3)................. 51 59 93 28 32 62 Insurance Sickness and accident insurance. 21 22 21 14 14 7 Long-term disability insurance.. 27 28 30 8 9 8 Medical care.................... 93 90 87 38 43 31 Dental care..................... 62 65 62 25 37 27 Life Insurance.................. 88 89 87 36 41 36 Retirement All retirement(4)............... 96 93 96 48 51 58 Defined benefit pension......... 90 87 91 45 48 55 Defined contribution............ 9 9 9 3 4 5 Types of plans: Savings and thrift............ 1 2 2 1 1 1 Money purchase pension........ 8 7 7 2 3 3 401(k) plans with employer contribution................ 8 7 7 (5) (5) 3 See footnotes at end of table. Table 4. Percent of full-time and part-time(1) employees participating in selected employee benefit programs,(2) state and local governments, 1990, 1992, and 1994 - Continued Full-time employees Part-time employees Employee benefit program 1990 1992 1994 1990 1992 1994 Other benefits Flexible benefits plans......... 5 5 5 2 2 3 Reimbursement accounts.......... 31 50 64 12 25 27 Child care...................... 9 8 9 5 2 6 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 Family leave prior to 1994 included only maternity and/or paternity leave. 4 Includes defined benefit pension plans and defined contribution retirement plans. Some employees participated in both types of plans. 5 Data not available. 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.