TEXT Table 1. Full-time employees participating in selected employee benefit Table 2. Part-time1 employees participating in selected employee benefit Table 3. Full-time employees participating in selected employee benefit Technical contact: USDL: 94-42 EBS staff (202)606-6222 Media contact: FOR RELEASE: 10 A.M. (EST) Kathyrn Hoyle (202)606-5902 Thursday, January 27, 1994 BLS REPORTS ON EMPLOYEE BENEFITS IN SMALL PRIVATE INDUSTRY ESTABLISHMENTS, 1992 Seven of 10 full-time workers in small private establishments (those with fewer than 100 workers) participated in employer-provided health care plans, according to 1992 survey data issued by the U.S. Department of Labor's Bureau of Labor Statistics. Specifically: About two-thirds (68 percent) of the full-time workers in small establishments with health care benefits were covered by a traditional fee-for- service plan; Nearly one-fifth (18 percent) of full-time workers with health care coverage participated in Preferred Provider Organizations (PPO), a variant of the fee- for-service plan that encourages the use of specified health care providers; Approximately one-seventh (14 percent) of full-time workers with health care coverage received benefits through a Health Maintenance Organization (HMO); Nearly one-half (47 percent) of full-time employees in small establishments with health care benefits were required to contribute to their health care premiums for individual coverage; for these employees, monthly contributions averaged $37. Seven-tenths (73 percent) were required to contribute for family coverage; monthly contributions averaged $151. Five percent of part-time workers in small establishments participated in employer-provided health care plans. Although the proportion of full-time workers participating in health care plans in 1992 was little changed from the 69 percent reported in the 1990 survey of small establishments, participation in HMO's and, more significantly, the relatively new offerings of PPO's, continued to grow. Also, employees were required to share an increasing part of the health coverage burden through increased employee premiums and deductibles. Data also are available on the incidence of employee benefits in small establishments among major occupational groups: Professional, technical, and related employees; clerical and sales employees; and blue-collar and service employees. In general, benefits were more prevalent among the first two groups of employees. For example, among full-time workers, retirement benefits were provided to about half these workers while about two- fifths of the blue-collar and service employees had such benefits. (See table 1.) The 1992 small establishment survey provides information on the incidence and characteristics of benefit plans for an estimated 44 million employees (nearly two-fifths of the nation's civilian employed persons) in private establishments with fewer than 100 employees. About 34 million full-time and 10 million part-time employees were covered by the survey, which included all private industries, except farms and households. The survey included small establishments that were part of larger enterprises, such as a local service unit of a large manufacturing company, and small independent businesses, such as a local grocery store. Four-fifths of the covered employees were in independent small businesses, and the remainder were in small units of larger companies. BENEFITS FOR FULL-TIME EMPLOYEES IN SMALL ESTABLISHMENTS As in 1990, a large majority of full-time workers in small private industry establishments in 1992 were provided paid holidays, paid vacations, and life and health insurance. The 1992 survey sheds light on recent trends in these and other employee benefits. These recent developments are summarized below. Health Benefits About nine-tenths of the full-time employees in small establishments who received employer-provided health care benefits in 1992 were covered by "managed care" provisions -- measures aimed at controlling health care usage and cost. One-third of full-time workers with health care benefits were covered by non-traditional health care plans -- health maintenance organizations or preferred provider organizations -- designed to limit health care costs. Approximately four-fifths of all employees covered by traditional fee-for-service plans also were subject to features designed to hold down health care costs and usage. HMO's which covered 14 percent of full-time workers with medical care benefits, provide prepaid services to patients from a selected group of doctors and facilities. Care is often free of charge or is available for a fee, for example, $10 or less for an office visit. A point-of- service option, available to a few workers covered by HMOs, allowed patients to seek care from a doctor or facility not affiliated with the HMO. In such cases, the patient paid a greater share of the cost of care. Preferred Provider Organizations are a type of fee- for-service plan that offer individuals a limited choice of health care providers; in 1992, these plans covered 18 percent of full-time workers with health care benefits in small establishments. If the individual chooses a doctor, dentist, hospital, or other facility not on the preferred provider list, the plan pays a smaller share of the cost. For the first time, the 1992 survey presents data that compare cost differences incurred when using a preferred-provider as opposed to a non-preferred provider. Nearly all workers covered by a PPO had a different percent of charges paid by the plan based on who provided the services. For example, a plan might pay 90 percent of charges for hospital services when received from a preferred provider and only 80 percent for the same services when received from a non-preferred provider. About one in five workers covered by a PPO had a different deductible based on who provided the services. (A deductible is an initial payment required to be paid by a patient before the plan begins to pay benefits.) For example, physician services through a preferred provider typically required only a modest copayment, such as $10 per office visit. Visits to non- preferred doctors were commonly covered under major medical benefits that usually required satisfaction of an annual deductible and then paid 80 percent of physicians' charges. Fee-for-service plans, which covered 68 percent of full-time workers with health care benefits in small establishments in 1992, are the traditional means of providing coverage. 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. Approximately four-fifths of all the workers covered by such plans, however, 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 second surgical opinions. When such requirements are not adhered to, the plan reduces or eliminates payments. Virtually all of the participants in fee-for-service plans were subject to an annual deductible that averaged $220 per year. Additionally, nearly nine-tenths of these participants were in plans with an annual limit on individual out-of-pocket expenses; such limits averaged $1,108 per year. Life and Disability Insurance Life insurance protection, typically paid for entirely by employers, was provided to just under two- thirds (64 percent) of full-time workers in small establishments in 1992. About three out of five life insurance plan participants had benefits specified as flat amounts, averaging slightly below $15,000. Most of the remaining participants were provided life insurance benefits based on salary, typically one or two times annual pay. Additional life insurance protection could be obtained by three-tenths of those employees covered by a basic life insurance plan. In nearly all cases, this supplemental coverage, while available at group insurance rates, was paid for entirely by the employee. One-fourth of life insurance participants were in plans that continued benefits after retirement. In nearly all cases, these benefits were reduced at retirement, but remained in effect for life. Sickness and accident insurance plans, which provide either a percentage of a worker's pay or a flat amount per week during a period of disability, were available to one-fourth (26 percent) of full-time workers in the 1992 small establishment survey. A typical sickness and accident insurance plan imposes a 7-day waiting period before benefits (often at half or two-thirds of regular pay) begin, with payments continuing for 26 weeks. When an employee is disabled for a longer period of time, or indefinitely, income replacement benefits may be available through a long-term disability insurance plan. About one-fourth (23 percent) of full-time employees in the 1992 small establishment survey participated in a long-term disability insurance plan; four out of five of these workers had coverage fully paid by their employer. Typical long-term disability insurance plans provided payments equal to 60 percent of pre-disability pay. Defined Contribution Plans One-third (33 percent) of full-time employees in small establishments--11 million workers--participated in one or more defined contribution plan in 1992. These plans, which usually specify the employer's contribution but cannot predetermine the employee's actual amount of benefits, include deferred profit-sharing (covering 16 percent of full-time workers), savings and thrift (14 percent), money purchase pension (5 percent), and stock ownership plans (1 percent). Simplified employee pension plans, or SEPs, which are specifically designed for small establishments to create employee retirement accounts, were rarely found. (Many SEPs cover the self-employed, who are excluded from the survey.) Nearly one-quarter (24 percent) of the full-time workers covered by the survey participated in 401(k) plans (also known as cash or deferred arrangements), reflecting the increased role played by these plans as retirement vehicles since 1990. Virtually all of these plans were salary reduction plans, allowing employees to reduce their taxable income by making voluntary contributions that are not taxed until withdrawn from the plan. For example, savings and thrift plans commonly allow participants to make pretax savings, some or all of which is matched by the employer. Defined Benefit Pension Plans Defined benefit pension plans, which specify a formula for determining an employee's annuity, covered about one-fifth (22 percent) of full-time workers in small establishments in 1992 -- 7 million workers. For the first time, survey data in small private establishments are available on the "portability" of pension benefits, that is, the ability to move accumulated benefits from one employer to another. In 1992, nearly 2 out of 10 full-time employees with a defined benefit pension plan were covered by a portability provision. Most of these participants were covered by a multiemployer plan established by a union; some employees were covered by a single employer plan offered by an establishment with a portability agreement with related establishments. If an employee moved to another employer, benefits from the prior employer, usually in the form of years of credited service, were transferred. Family-Related Benefits The care of family members was addressed by small private employers in a number of ways in 1992. Parental leave plans provide time off for mothers and fathers to care for newborn or newly adopted children. Such plans, as defined for the survey, are separate from vacations, which also may be used for parenting purposes. Nearly one-fifth (18 percent) of full-time employees had unpaid maternity leave available, with the maximum leave averaging 16 weeks. Nearly one-tenth (8 percent) of full- time employees had unpaid paternity leave available. The number of workers covered by parental leave plans in 1992 was virtually the same as the 1990 survey. Paid parental leave was rare. (These data on parental leave were collected prior to the passage of the Family and Medical Leave Act in February, 1993.) Two percent of full-time employees were eligible for child care benefits subsidized by their employer. 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 reimbursement accounts (commonly known as Flexible Spending Accounts or FSAs) which characteristically cover dependent care, health care premiums, or out-of-pocket health care expenses. Fourteen percent of full-time employees were eligible for such accounts, up from 8 percent in 1990. Most often, these accounts are funded solely by employee pre-tax dollars. BENEFITS FOR PART-TIME WORKERS IN SMALL ESTABLISHMENTS Paid vacations and holidays were the most prevalent benefits available to part-time workers in small establishments, while insurance and retirement protection was rare. (See table 2.) 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. About 3 in 10 part-time employees in small establishments in 1992 received paid vacations and paid holidays. When these benefits were provided, they were typically similar to those of full-time workers, but prorated based on the work schedule of the part-time employee. Insurance benefits were generally available to fewer than one-tenth of part-time employees in small establishments. Retirement benefits were offered to just over a tenth, up slightly from the 1990 survey due to a modest increase in the incidence of defined contribution plans, usually with profit-sharing features. BENEFITS BY TYPE OF ESTABLISHMENT Table 3 presents comparative data on employee benefits provided to full-time workers in all small establishments and to those in small independent private businesses in 1992. Once again, the incidence of benefits varied widely: Health care benefits were provided to nearly two-thirds (64 percent) of full-time employees in small independent businesses in 1992, while one-third (34 percent) had retirement plan coverage. Among other benefits: 85 percent of full-time workers received paid vacations; 79 percent received paid holidays; 54 percent had life insurance protection; and 15 percent could receive unpaid maternity leave. Also presented in table 3 are summary data from the 1991 medium and large private establishment survey. 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 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 small 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 Small Private Establishments, 1992, which will be published this spring. Benefits data are available for all covered employees combined and separately for three broad occupational groups: Professional, technical, and related employees; clerical and sales employees; and blue- collar and service employees. Definitions of these occupational groups may be found in the tables at the end of this release. 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 Employee Benefits Survey is collected on a 2- year cycle. During 1993, data were collected on benefits provided to workers in medium and large private establishments (those employing 100 workers or more). The survey of small private establishments will be conducted again in 1994. 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 analysis of these data, the results will be published in the bulletin, Employee Benefits in Small Private Establishments, 1992. 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, 1991 (Bureau of Labor Statistics, Bulletin 2422, May 1993). Data for government employees will be forthcoming in Employee Benefits in State and Local Governments, 1992 (Bureau of Labor Statistics). Combined 1990-91 data, which provide information on benefits provided to all workers in private industry and state and local governments, are available in BLS Reports on Employee Benefits in the United States, 1990-91 (Bureau of Labor Statistics, Summary 93-4, June 1993). Table 1. Full-time employees participating in selected employee benefit programs, small private establishments, United States, 19921 (In percent) _______________________________________________________________________________ | |Professional,| Clerical |Blue-collar| Employee | All | technical, | and | and | benefit |full-time|and related | sales | service | program |employees| employees2 |employees3| employees4| | | | | | Paid time off | | | | | Holidays ......................| 82 | 94 | 90 | 74 | Vacations .....................| 88 | 94 | 94 | 81 | Personal leave ................| 12 | 19 | 16 | 7 | Lunch period ..................| 9 | 12 | 8 | 8 | Rest period ...................| 49 | 40 | 43 | 56 | Funeral leave .................| 50 | 60 | 56 | 43 | Jury duty leave ...............| 58 | 76 | 65 | 47 | Military leave ................| 21 | 33 | 27 | 13 | Sick leave ....................| 53 | 74 | 70 | 35 | Maternity leave ...............| 2 | 3 | 2 | 1 | Paternity leave ...............| 1 | 1 | (5) | (5) | | | | | | Unpaid time off | | | | | Maternity leave ...............| 18 | 27 | 20 | 13 | Paternity leave ...............| 8 | 13 | 9 | 6 | | | | | | Insurance | | | | | Sickness and accident | | | | | insurance ...................| 26 | 24 | 27 | 27 | Long-term disability | | | | | insurance ...................| 23 | 43 | 31 | 10 | Medical care ..................| 71 | 83 | 78 | 61 | Dental care ...................| 33 | 43 | 37 | 27 | Life insurance ................| 64 | 77 | 73 | 53 | | | | | | Retirement | | | | | All retirement6 ...............| 45 | 52 | 52 | 38 | Defined benefit pension .......| 22 | 21 | 25 | 20 | Defined contribution ..........| 33 | 43 | 38 | 26 | Uses of funds: | | | | | Retirement7 ...............| 29 | 38 | 34 | 24 | Capital accumulation8 .....| 4 | 6 | 5 | 3 | Types of plans: | | | | | Savings and thrift ........| 14 | 20 | 17 | 9 | Deferred profit sharing....| 16 | 18 | 19 | 14 | Employee stock ownership...| 1 | 1 | 1 | 1 | Money purchase pension ....| 5 | 9 | 5 | 4 | Simplified employee pension| 1 | 1 | 1 | 1 | 401(k) plans ..................| 24 | 34 | 28 | 18 | | | | | | Other benefits | | | | | Flexible benefits plans .......| 2 | 4 | 4 | (5) | Reimbursement accounts ........| 14 | 24 | 20 | 7 | Child care ....................| 2 | 3 | 3 | (5) | 1 Except for maternity and paternity 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 Less than 0.5 percent. 6 Includes defined benefit pension plans and defined contribution retirement plans. Some employees participated in both types of plans. 7 Includes money purchase pension, profit sharing, savings and thrift, stock bonus, employee stock ownership, and Simplified Employee Pension plans in which employer contributions must remain in the participant's account until retirement age, death, disability, separation from service, age 59-1/2, or hardship. 8 Includes plans in which participants may withdraw employer contributions from their accounts without regard to the conditions listed in footnote 7. Table 2. Part-time1 employees participating in selected employee benefit programs, small private establishments, United States, 19922 (In percent) _______________________________________________________________________________ | | Professional,| Clerical | Blue-collar | Employee | All | technical, | and | and | benefit |part-time| and related | sales | service | program |employees| employees3 | employees4| employees5 | | | | | | Paid time off | | | | | Holidays ..................| 29 | 35 | 37 | 22 | Vacations .................| 31 | 35 | 33 | 30 | Personal leave ............| 3 | 4 | 4 | 3 | Lunch period ..............| 5 | 3 | 2 | 7 | Rest period ...............| 31 | 14 | 40 | 27 | Funeral leave .............| 12 | 20 | 19 | 7 | Jury duty leave ...........| 15 | 22 | 19 | 11 | Military leave ............| 4 | 5 | 6 | 2 | Sick leave ................| 11 | 14 | 17 | 7 | Maternity leave ...........| (6) | - | 1 | - | Paternity leave ...........| - | - | - | - | | | | | | Unpaid time off | | | | | Maternity leave ...........| 7 | 9 | 9 | 6 | Paternity leave ...........| 4 | 5 | 5 | 4 | | | | | | Insurance | | | | | Sickness and accident | | | | | insurance ...............| 11 | 14 | 14 | 8 | Long-term disability | | | | | insurance ...............| 1 | 4 | 1 | (6) | Medical care ..............| 5 | 7 | 7 | 4 | Dental care ...............| 3 | 7 | 4 | 2 | Life insurance ............| 6 | 7 | 8 | 5 | | | | | | Retirement | | | | | All retirement7 ...........| 12 | 7 | 17 | 9 | Defined benefit pension ...| 4 | 1 | 5 | 3 | Defined contribution ......| 9 | 7 | 14 | 6 | | | | | | Other benefits | | | | | Flexible benefits plans ...| 1 | - | 1 | 1 | Reimbursement accounts ....| 2 | 3 | 3 | 1 | Child care ................| 1 | 4 | 1 | (6) | 1 Employees are classified as part-time in accordance with practices of surveyed establishments. 2 Except for maternity and paternity 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: Dash indicates no employees in this category. Table 3. Full-time employees participating in selected employee benefit programs, small private establishments and small independent private businesses, United States, 1992, and medium and large private establishments, United States, 19911 (In percent) ______________________________________________________________________________ | Small private | | | establishments, 1992 | | | All | Full-time | | Employee | full-time | employees | Full-time | benefit | employees | in small | employees in | program | in small | independent | medium and large | | private | private | private | |establishments| businesses |establishments, 1991| | | | | Paid time off | | | | Holidays ..................| 82 | 79 | 92 | Vacations .................| 88 | 85 | 96 | Personal leave ............| 12 | 11 | 21 | Lunch period ..............| 9 | 9 | 8 | Rest period ...............| 49 | 48 | 67 | Funeral leave .............| 50 | 39 | 80 | Jury duty leave ...........| 58 | 48 | 86 | Military leave ............| 21 | 14 | 54 | Sick leave ................| 53 | 45 | 67 | Maternity leave ...........| 2 | 2 | 2 | Paternity leave ...........| 1 | (2) | 1 | | | | | Unpaid time off | | | | Maternity leave ...........| 18 | 15 | 37 | Paternity leave ...........| 8 | 7 | 26 | | | | | Insurance | | | | Sickness and accident | | | | insurance ...............| 26 | 24 | 45 | Long-term disability | | | | insurance ...............| 23 | 13 | 40 | Medical care ..............| 71 | 64 | 83 | Dental care ...............| 33 | 24 | 60 | Life insurance ............| 64 | 54 | 94 | | | | | Retirement | | | | All retirement3 ...........| 45 | 34 | 78 | Defined benefit pension ...| 22 | 12 | 59 | Defined contribution ......| 33 | 27 | 48 | Retirement4 ............| 29 | 25 | 39 | Capital accumulation5 ..| 4 | 2 | 9 | | | | | Other benefits | | | | Flexible benefits plans ...| 2 | (2) | 10 | Reimbursement accounts ....| 14 | 6 | 36 | Child care ................| 2 | (2) | 8 | 1 Except for maternity and paternity leave and reimbursement accounts, benefits paid for entirely by the employee were excluded from the tabulations. 2 Less than 0.5 percent. 3 Includes defined benefit pension plans and defined contribution retirement plans. Some employees participated in both types of plans. 4 Includes money purchase pension, profit sharing, savings and thrift, stock bonus, employee stock ownership, and Simplified Employee Pension plans in which employer contributions must remain in the participant's account until retirement age, death, disability, separation from service, age 59-1/2, or hardship. 5 Includes plans in which participants may withdraw employer contributions from their accounts without regard to the conditions listed in footnote 4.