Employee Benefits in Small

Private Establishments, 1996

U.S. Department of Labor

Alexis M. Herman, Secretary

Bureau of Labor Statistics

Katharine G. Abraham, Commissioner

April 1999

Bulletin 2507
This bulletin presents results of a 1996 Bureau of Labor

Statistics (BLS) survey of the incidence and detailed provisions of selected employee benefit plans in small private

establishments. The survey provides representative data

for 54 million employees in the Nation’s private nonagricultural industries. Appendix A provides a detailed description of the coverage and statistical procedures used in

the survey.

The 1996 Employee Benefits Survey (EBS) reports on

benefits provided to employees in establishments with fewer

than 100 workers in all private non-farm industries. This

is the fourth time this survey was conducted; earlier surveys were conducted in 1990, 1992, and 1994. Between

1979 and 1986, the survey provided benefits data on fulltime employees in medium and large establishments, those

with either 100 or 250 employees or more, depending on

the industry; coverage in the services industries was limited. The 1987 survey examined benefits provided to fulltime employees in State and local governments. In 1988,

1989, 1991, 1993, and 1995, expanded surveys of medium

and large establishments covered full-time employees in

establishments employing 100 workers or more in all private industries.

Beginning in 1990, the Employee Benefits Survey included both full-time and part-time employees in all private industries and State and local governments. In that

year, the survey covered small private establishments and

governments. At the present time, small private establishPreface

ments and State and local governments are surveyed in evennumbered years (with the exception of 1996, when only

small private establishments were surveyed), and medium

and large private establishments are surveyed in odd-numbered years.

The 1996 Employee Benefits Survey provides a “survey

highlights” section (chapter 1) with a number of key findings for major benefits, such as time-off benefits; disability

benefits; medical, dental, and vision care; life insurance;

and defined benefit pension and defined contribution plans.

Individual chapters, with general information and details

describing the benefit provisions, follow along with the respective tables for each benefit.

Material in this publication is in the public domain and,

with appropriate credit, may be reproduced without permission. This information is available to sensory impaired

individuals upon request. Voice phone: (202) 606-7828;

Federal Relay Service: 1-800-877-8339.

The public may access Employee Benefits Survey data

at http://stats.bls.gov/ebshome.htm, the Bureau of Labor

Statistics website for the Employee Benefits Survey. Questions on the data in this publication should be referred to

the staff of the Employee Benefits Survey at (202) 606-6222

or via E-mail: OCLTINFO@bls.gov.

Pictured on the cover of this bulletin is The Jury Room

by Norman Rockwell, February 14, 1959, The Curtis Publishing Company.
Data for this bulletin were compiled and analyzed in the

Office of Compensation Levels and Trends by Cathy Baker,

Iris Diaz, Daniel Elmore, John Foster, Avy Graham, Marc

Kronson, Anthony Lombardozzi, Cynthia Thompson, and

Arthur Williams, under the direction of Allan Blostin and

John Morton. Cathy Baker, James Moore, and Sidney

Samuel prepared most of the tables. Natalie Kramer, Sydney

Samuel, and James Houff prepared survey analysis under

the direction of Frances Harris. Text was prepared for publication by Mashell Greene.

Other table preparation, computer programming, and

systems design for the survey were provided by Aholivah

Maier, Pat O’Brian, and Cheryl Sims of the Division of

Acknowledgments

Directly Collected Periodic Surveys, under the direction of

Leslie Chappel. Thomas Kelly and Christina L. McCarthy

of the Statistical Methods Group (Office of Compensation

and Working Conditions) were responsible for the sample

design, nonresponse adjustments, sample error computations, and other statistical procedures, under the direction

of Terry Burdette. Data collection for the survey was directed by the Bureau’s Assistant Regional Commissioners

for Operations.

The Bureau wishes to express its particular appreciation

to employers for their continued cooperation in providing

data for the small establishment segment of the Employee

Benefits Survey.
v

Page

Chapter 1. Results of the 1996 survey ................................................................................................................... 1

Work schedules, paid time off, and family leave .............................................................................................. 1

Disability benefits .............................................................................................................................................. 2

Health care ......................................................................................................................................................... 2

Life insurance .................................................................................................................................................... 2

Defined benefit and defined contribution plans ................................................................................................ 3

Reimbursement accounts and flexible benefits plans ....................................................................................... 3

Other benefits .................................................................................................................................................... 3

Plan administration ........................................................................................................................................... 3

Chapter 2. Work schedules, paid time off, and family leave ................................................................................. 12

Work schedules .................................................................................................................................................. 12

Paid time off ...................................................................................................................................................... 12

Paid holidays ..................................................................................................................................................... 12

Paid vacations .................................................................................................................................................... 12

Paid personal leave ............................................................................................................................................ 12

Paid funeral leave, jury-duty leave, and military leave .................................................................................... 12

Family leave....................................................................................................................................................... 13

Chapter 3. Disability benefits................................................................................................................................. 24

Paid sick leave ................................................................................................................................................... 24

Short-term diability coverage ............................................................................................................................ 25

Long-term disability insurance ......................................................................................................................... 25

Chapter 4. Medical, dental, and vision care .......................................................................................................... 36

Medical care ...................................................................................................................................................... 36

Employee contributions ..................................................................................................................................... 36

Type of medical care plans ................................................................................................................................ 36

Fee-for-service plans ......................................................................................................................................... 37

Preferred provider organizations ....................................................................................................................... 37

Health maintenance organizations .................................................................................................................... 37

Cost containment ............................................................................................................................................... 38

Hospital coverage .............................................................................................................................................. 38

Alternatives to hospitalization .......................................................................................................................... 38

Surgical coverage .............................................................................................................................................. 39

Outpatient physicians visits and diagnostic services ........................................................................................ 39

Prescription drug benefits ................................................................................................................................. 39

Mental health coverage and substance abuse treatment ................................................................................... 40

Pre-existing condition limitation ...................................................................................................................... 40

Coverage for retired workers ............................................................................................................................. 40

Dental care ......................................................................................................................................................... 41

Vision care ......................................................................................................................................................... 41

Contents

Page
vi

Page

Chapter 5. Life insurance ....................................................................................................................................... 59

Types and amounts of benefit formulas ............................................................................................................ 59

Coverage for older active workers and retirees................................................................................................. 59

Related protection .............................................................................................................................................. 59

Service requirements ......................................................................................................................................... 60

Accidental death and dismemberment .............................................................................................................. 60

Survivor income benefits ................................................................................................................................... 60

Chapter 6. Defined benefit plans ........................................................................................................................... 67

Benefit formulas ................................................................................................................................................ 67

Private benefits and Social Security payments ................................................................................................. 68

Maximum and minimum benefit provisions .................................................................................................... 68

Methods of payment .......................................................................................................................................... 68

Survivor annuities ............................................................................................................................................. 68

Preretirement survivor benefits ......................................................................................................................... 69

Normal retirement ............................................................................................................................................. 69

Early retirement ................................................................................................................................................. 69

Disability retirement .......................................................................................................................................... 70

Vesting ............................................................................................................................................................... 70

Portability .......................................................................................................................................................... 71

Postretirement pension increases ...................................................................................................................... 71

Employee contributions ..................................................................................................................................... 71

Participation requirements ................................................................................................................................ 71

Chapter 7. Defined contribution plans .................................................................................................................. 78

Plan types ........................................................................................................................................................... 78

Savings and thrift plans .................................................................................................................................... 78

Employee contributions ............................................................................................................................... 79

Employer-matching contributions............................................................................................................... 79

Investment decisions ................................................................................................................................... 79

Withdrawals and loans ................................................................................................................................ 79

Distribution .................................................................................................................................................. 79

Participation requirements .......................................................................................................................... 79

Vesting ......................................................................................................................................................... 79

Deferred profit-sharing plans ............................................................................................................................ 80

Money purchase pension plans ......................................................................................................................... 80

Stock plans......................................................................................................................................................... 80

Cash or deferred arrangements ......................................................................................................................... 80

Simplified employee pension plans................................................................................................................... 80

Chapter 8. Flexible benefits plans and reimbursement accounts .......................................................................... 87

Chapter 9. Benefits by selected characteristics ...................................................................................................... 89

Small, independent businesses .......................................................................................................................... 89

Geographic region ............................................................................................................................................. 90

Industry .............................................................................................................................................................. 90

Part-time employees .......................................................................................................................................... 90

Appendixes:

A. Technical note............................................................................................................................................... 104

B. Survey response ............................................................................................................................................ 107

C. Availability of survey data ............................................................................................................................ 110

Contents—Continued
vii

Page

Tables:

Full-time employees in small private establishments, 1996:

1. Selected benefits: Percent participating ...................................................................................................... 4

2. Selected benefits: Number participating ..................................................................................................... 6

3. Other benefits: Percent eligible ................................................................................................................... 8

4. Other benefits: Number eligible .................................................................................................................. 9

5. Insurance and retirement plans: Type of plan sponsor ............................................................................... 10

Work schedules:

6. Hours scheduled per week and per day ....................................................................................................... 14

 7. Type of work schedule ................................................................................................................................. 15

8. Weeks scheduled per year ............................................................................................................................ 15

Paid time off:

9. Holidays and vacations: Average number of days ...................................................................................... 16

10. Holidays: Number of days provided each year ............................................................................................ 17

Vacations:

11. Number of days provded for selected periods of service ............................................................................. 18

12. Method of payment for vacation periods .................................................................................................... 20

13. Length of service required to take vacation ................................................................................................ 20

14. Unused vacation policy................................................................................................................................ 21

15. Average number of days by length of service and unused vacation policy ................................................ 21

16. Personal leave: Number of days provided per year ..................................................................................... 22

17. Funeral leave: Number of days available per occurrence ........................................................................... 22

18. Jury-duty leave: Number of days available per occurrence ........................................................................ 23

19. Military leave: Number of days available per year ..................................................................................... 23

Unpaid family leave:

 20. Duration of benefits ...................................................................................................................................... 23

Paid sick leave:

21. Type of provision ......................................................................................................................................... 26

 Annual plans:

22. Number of days ............................................................................................................................................ 27

23. Average number of days at full pay ............................................................................................................. 28

24. Unused sick leave policy and carryover provisions .................................................................................... 28

25. Average number of days at full pay by unused sick leave policy ................................................................ 29

26. Length-of-service requirements for participation ....................................................................................... 29

27. Other uses of sick leave ............................................................................................................................... 30

Short-term disability:

28. Method of funding ....................................................................................................................................... 30

29. Method of payment ...................................................................................................................................... 30

30. Fixed percent of earnings amounts ............................................................................................................. 31

31. Type of waiting period ................................................................................................................................. 31

32. Length of waiting period ............................................................................................................................. 32

33. Duration of benefits ..................................................................................................................................... 32

34. Eligibility requirements ............................................................................................................................... 33

35. Employee contribution provisions............................................................................................................... 33

Contents—Continued
viii

Page

Long-term disability insurance:

36. Benefit waiting period ................................................................................................................................. 34

37. Method of payment ...................................................................................................................................... 34

38. Maximum benefits based on percent of earnings formulas ........................................................................ 35

39. Eligibility requirements ............................................................................................................................... 35

Medical care:

40. Summary of selected features ...................................................................................................................... 42

41. Contributory status by funding arrangement .............................................................................................. 43

42. Amount and type of employee contributions for individual coverage ........................................................ 45

43. Amount and type of employee contributions for family coverage .............................................................. 46

44. Fee arrangement and financial intermediary .............................................................................................. 47

45. Amount of individual deductibles in non-HMOs ....................................................................................... 48

46. Relationship of individual and family deductibles in non-HMOs .............................................................. 49

47. Coinsurance rates in non-HMOs ................................................................................................................. 50

48. Maximum out-of-pocket expense provisions in non-HMOs ...................................................................... 51

49. Maximum benefit provisions in non-HMOs ............................................................................................... 52

50. Averages for major medical provisions ....................................................................................................... 53

51. Extent of coverage for surgical services in non-HMOs .............................................................................. 54

52. Selected features in HMOs .......................................................................................................................... 54

53. Coverage for selected categories of care in HMOs ..................................................................................... 55

54. Extent of coverage for physician’s office visits in HMOs........................................................................... 55

55. Summary of coverage for outpatient prescription drug benefits ................................................................ 56

56. Brand name drug provisions in non-HMOs ............................................................................................... 56

57. Brand name drug provisions in HMOs ....................................................................................................... 57

58. Eligibility requirements ............................................................................................................................... 57

59. Effect of retirement on coverage and source of plan funding ..................................................................... 58

Dental care:

60. Eligibility requirements ............................................................................................................................... 58

Life insurance:

61. Summary of provisions ................................................................................................................................ 61

62. Method of determining basic coverage ....................................................................................................... 61

63. Flat dollar benefit amounts ......................................................................................................................... 62

64. Multiple of earnings benefit amounts ......................................................................................................... 63

65. Maximum benefits placed on multiple of earnings formulas ..................................................................... 64

66. Retiree coverage .......................................................................................................................................... 65

67. Reduction in benefits for retirees ................................................................................................................ 65

68. Supplemental coverage ................................................................................................................................ 65

69. Dependent coverage .................................................................................................................................... 66

70. Eligibility requirement ................................................................................................................................ 66

Defined benefit plans:

71. Summary of plan provisions ....................................................................................................................... 72

72. Primary formula and availability of alternate formula ............................................................................... 72

73. Terminal earnings formula .......................................................................................................................... 73

74. Definition of terminal earnings ................................................................................................................... 73

75. Integration with social security ................................................................................................................... 74

76. Requirements for normal retirement ........................................................................................................... 75

77. Requirements for early retirement .............................................................................................................. 76

78. Early retirement reduction .......................................................................................................................... 77

Contents—Continued
ix

Page

Savings and thrift plans:

79. Maximum employee contributions .............................................................................................................. 82

80. Method of determining pretax contribution ................................................................................................ 82

81. Maximum pretax employee contributions .................................................................................................. 83

82. Method of employer matching contributions .............................................................................................. 83

83. Employee contributions by employer specified matching percentage ........................................................ 84

84. Service requirements ................................................................................................................................... 85

401(k) salary reduction plans:

85. Maximum pretax employee contributions .................................................................................................. 86

86. Service requirements ................................................................................................................................... 86

Flexible benefits plans:

87. Reimbursement accounts: Eligibility by expenses covered ........................................................................ 88

Benefits for full-time employees in small independent businesses, 1996:

88. Summary: Participation in selected employee benefit programs ................................................................ 91

89. Other benefits: Eligibility for specified benefits ......................................................................................... 93

Benefits for full-time employees by geographic region:

90. Summary: Participation in selected employee benefit programs ................................................................ 94

91. Other benefits: Eligibility for specified benefits ......................................................................................... 96

Benefits for full-time employees by industry:

92. Summary: Participation in selected employee benefit programs, goods-producing

 and service-producing industries .............................................................................................................. 97

93. Other benefits: Eligibility for specified benefits, goods-producing and

 service-producing industries ..................................................................................................................... 98

Benefits for nonunion full-time employees:

94. Summary: Participation in selected employee benefit programs ................................................................ 99

95. Other benefits: Eligibility for specified benefits ......................................................................................... 100

Benefits for part-time employees:

96. Summary: Participation in selected employee benefit program ................................................................. 101

97. Other benefits: Eligibility for specified benefits ......................................................................................... 103

Appendix tables:

 A1. Survey scope: Full-time employees ............................................................................................................... 108

 A2. Survey scope: Part-time employees ............................................................................................................... 109

Contents—Continued
1

The Bureau’s 1996 survey of small private industry establishments provides data on employee work schedules and

on the incidence and detailed characteristics of employee

benefits paid for, at least in part, by the employer.1 These

benefits include holidays, vacations, and personal, funeral,

jury duty, military, family, and sick leave; short-term disability, long-term disability, and life insurance; medical,

dental, and vision care, and private retirement plans. Because the survey data are limited to formal plans, this bulletin may understate the extent of such benefits as military

and jury duty leave.

Data also are collected on the incidence of several other

benefits, including severance pay, child-care assistance,

wellness programs, employee assistance programs, and educational assistance. In addition, information is obtained on

flexible benefits plans, reimbursement accounts, and unpaid family leave.

For the 1996 survey of benefits in small private establishments, BLS collected information on both full-time and

part-time employees. Employees were classified as either

full-time or part-time workers in accordance with their

employers’ practices. Part-time workers typically are scheduled to work fewer hours per week than full-time workers

engaged in the same type of work activity. In addition, data

were collected on the incidence of employee benefits by

union status, broad industry grouping, and broad geographic

region.

Major highlights of the survey for full-time employees

in small private establishments are reported later in this

chapter. Detailed information on the provisions of the benefits studied appears in chapters 2 through 9.

Among the most frequently observed benefits provided

to full-time employees in small private establishments in

1996 were medical care, life insurance, holidays, vacations,

and paid jury duty leave. The majority of full-time workers

in these small establishments received each of these benefits (table 1). In contrast, less prevalent among full-time

workers were such benefits as personal leave, dental care,

defined benefit pension plans, short-term disability insurance, and long-term disability insurance.

Work schedules, paid time off, and family leave

Seventy-nine percent of full-time employees had weekly

work schedules of 40 hours, based on five 8-hour days.

Most other employees worked 7 or 71⁄2 hours a day, 5 days a

week. (See chapter 2.)

Vacation leave was the most prevalent type of paid timeoff benefit in the survey. Paid vacations, provided to 7 out

of 8 full-time employees, averaged 8 days after 1 year of

service, 14 days after 10 years of service, and 16 days after

25 years of service. The majority of employees covered by

vacation plans were required to work a specified minimum

period of time before being able to take a vacation. For just

over three-fifths of the workers, the minimum was 1 year.

One-fourth of the workers were allowed to carry-over at

least some of their unused vacation days into the following

year; slightly over one-fifth could cash in some or all of

their vacation days at the end of the year.

When other types of leave were provided, data revealed

the following:

• Four-fifths of the workers were provided paid holidays, averaging 8 days per year;

• Just over one-half of the workers were eligible for

paid leave to attend funerals for family members (usually 3 days); eligibility for funeral leave was more

common among white-collar workers than among

blue-collar workers;

• Nearly three-fifths of the workers were covered by

jury duty leave, the majority on an as needed basis;

• One-seventh of the workers were provided paid personal leave averaging 3 days per year;

• Just under one-fifth of the workers were provided coverage for military leave. This leave averaged 12 days

per year.

The Employee Benefits Survey measures the incidence

of formal family leave benefits. Prior to 1994, 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 or family illness

(employee, child, spouse, or parent). Generally, these proChapter 1. Results of the 1996 Survey

1 There are a few exceptions to this general rule. The survey provides

estimates on the availability of postretirement medical care and life insurance, dependent life insurance, supplemental life insurance, and long-term

care insurance even if an employee or retiree must pay for such coverage

fully. This is because the guarantee of insurability and availability of coverage at group premium rates can be considered a benefit. In addition, reimbursement accounts, salary reduction plans, and family leave plans are tabulated even if the employer bears no cost beyond administrative expenses.
2

visions apply to employees with 1 year of service who work

at least 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, 18 percent of full-time employees in small private establishments had unpaid maternity leave and 8 percent had unpaid paternity leave benefits

available to them. In 1996, 48 percent had an unpaid family leave benefits. Paid benefits were rare.

Disability benefits

Employees may be protected from loss of income during

illnesses or injuries by sick leave, short-term disability benefits, and long-term disability insurance.2

 (See chapter 3.)

Short-term disability (STD) protection was provided to 29

percent of full-time employees and paid sick leave covered

one-half of the full-time workers. Twenty-two percent of

full-time employees were covered by long-term disability

(LTD) insurance. Sick leave, LTD, and STD were more

prevalent among white-collar workers than among bluecollar and service workers.

Almost nine-tenths of covered workers were allowed a

fixed number of paid sick days per year, with an average of

8 days after 1 year of service, 10.3 days after 5 years, 10.5

days after 15 years, and 10.9 days after 25 years. Almost

two-fifths of full-time employees covered by annual sick

leave plans were allowed to carry over and accumulate unused sick leave from year to year, but most of these workers

had limits on the amount of sick leave that could be carried

over.

Twenty-nine percent of all workers were covered by shortterm disability benefits, and among them:

• Close to one-half of covered workers had to meet an

eligibility requirement before being able to join the

plan, usually 3 months or less.

• Almost four-fifths had their benefits determined by a

flat percentage of earnings, usually 50, 60, or 67 percent;

• Benefits were typically available for up to 26 weeks;

Almost all (94 percent) full-time workers with long-term

disability (LTD) insurance protection received their benefit

as a fixed percent of predisability earnings. For 61 percent,

the benefit formula was 60 percent of pre-disability monthly

pay. Eighty-four percent of workers with percent of earnings benefits had a dollar maximum imposed on their

monthly benefit, averaging $6,973 per month.

Health care

Medical care was among the most widespread benefits for

full-time employees in small private establishments__64

percent of workers participated in such plans. Participation

in medical plans varied widely across occupational

groups__76 percent of professional technical, and related

employees were in medical plans compared with 56 percent of blue-collar and service employees.

Other health-related benefits were less widespread__31

percent of full-time employees participated in a dental care

plan and 12 percent had vision care coverage. (See chapter

4.)

Just over one-half (52 percent) of all medical care participants had to contribute to the cost of their individual

coverage, unchanged since 1994. Three-fourths paid at least

part of the cost for family coverage, also the same as in

1994. When workers contributed to the cost of medical

care, their fixed monthly premiums averaged $43 for individual coverage and $182 for family coverage ($41 and

$160, respectively in 1994).

Almost two-thirds of medical care participants were covered by non-traditional plans, nearly always health maintenance organizations (HMOs) or preferred provider organizations (PPOs). The remainder of the participants were in

traditional fee-for-service plans. In 1994, the last time the

small private establishment survey was conducted, just over

two-fifths of workers were enrolled in non-traditional plans.

Life insurance

Life insurance protection was available to 62 percent of fulltime employees in small private establishments in 1996.

(See chapter 5.) Employers paid the full cost of basic life

insurance for 4 out of 5 full-time employees with the benefit. Life insurance benefits for full-time employees included

the following:

• Almost two-thirds of participants had a flat dollar

amount of insurance; averaging $16,189; this type of

benefit was more common among blue-collar workers than among white-collar workers;

• One-third of participants were covered by a multipleof-earnings formula, most often one or two times earnings; this formula for life insurance benefits was more

common for white-collar workers than blue-collar

workers;

• One-fourth of participants had life insurance benefits

supplementing their basic benefit; the employee

almost always paid the full cost of supplemental life

insurance;

2

 The definitions of paid sick leave and short-term disability (previously,

sickness and accident insurance) were changed since the last survey of small

private establishments. Paid sick leave now only includes plans that either

specify a maximum number of days per year or place no limit on the number

of days of sick leave available. Short-term disability now includes all insured, self-insured, and state-mandated plans available on a per-disability basis

as well as the unfunded per-disability plans previously reported as sick leave.

Sickness and accident insurance, reported in years prior to 1995, only included insured, self-insured, and state-mandated plans providing per-disablitity

benefits at less than full pay.
3

• Three-tenths had dependent life insurance protection.

Accidental death and dismemberment insurance was

available to almost one-half of full-time employees. This

insurance provides additional benefits if a worker dies or

loses an eye or a limb in an accident.

Defined benefit and defined contribution plans

Forty-six percent of all full-time workers in small private

establishments were covered by at least one retirement plan.

Defined benefit plans, which specify a formula for determining future benefits, were available to 15 percent of fulltime employees. (See chapter 6.)

Defined contribution plans specify employer and employee contributions but do not guarantee future benefits.

Such plans are considered to be vehicles for financing retirement benefits because funds usually cannot be withdrawn

easily; plans that do allow pre-retirement withdrawals generally place restrictions on withdrawals. Defined contribution plans were available to 38 percent of the full-time workers and were more prevalent among white-collar than

blue-collar workers. (See chapter 7.)

The most frequently observed types of defined contribution plans were savings and thrift plans and deferred profitsharing plans. Savings and thrift plans enrolled 23 percent

of full-time workers; 12 percent were covered by a deferred

profit-sharing plan. Other less prevalent types of defined

contribution plans were money purchase pension plans (4

percent of employees), employee stock ownership plans (1

percent of employees), and simplified employee pension

plans (1 percent of employees).

Reimbursement accounts and flexible benefits plans

Reimbursement accounts allow employees to use pretax

dollars to pay for certain expenses not covered by benefit

plans (for example, employee premium costs and plan

deductibles for medical care). Employer-sponsored reimbursement accounts covered 12 percent of full-time employees.

• Nearly 70 percent of employees with reimbursement

accounts could use them to pay for health plan premiums;

• Three-fourths of employees with reimbursement accounts could allocate funds for medical care deductibles, coinsurances, and other health expenses not

covered by their medical plan or for dependent care

expenses.

Employees in small private establishments occasionally

received their benefits as part of a package, complete with

options. These benefit packages are known as flexiblebenefits or cafeteria plans. (See chapter 8.) Flexible-benefits plans covered 4 percent of full-time employees.

Other benefits

In addition to the major benefit areas just described, the

survey estimated the incidence of 21 other benefits (tables

3-4). These data show the percent of workers eligible for a

specific benefit, but not the proportion of employees actually taking advantage of that benefit.

Among full-time employees in small private establishments:

• Forty-four percent were eligible for cash nonproduction bonuses, the most prevalent other benefit studied;

• About 38 percent were eligible for job-related educational assistance; assistance for non-job-related training was rare;

• Almost 15 percent were eligible for employee assistance programs (referral or services for alcohol and

drug abuse, marital difficulties, and financial, legal,

and emotional problems);

• Employee wellness programs, long-term care insurance, and child care benefits were rare.

Plan administration

In addition to collecting the data on individual benefit plans,

the survey looked at how insurance and retirement benefits

were administered (table 5). At least nine-tenths of fulltime participants were in single-employer plans for medical care, life insurance, funded short-term disability benefits, long-term disability insurance, and savings and thrift

plans. Three-fourths of defined benefit pension plans were

in single-employer plans; nearly all of the remaining employees were in multiemployer plans. Some of the employees with single-employer short-term disability benefits were

covered by mandated benefits such as State temporary

disabiltiy insurance plans in New York and New Jersey.
4

Table 1. Summary: Participation1 in selected employee benefit programs,

full-time employees, small private establishments, 1996

(In percent)

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Paid time off:

Holidays .......................................... 80 86 91 71

Vacations ........................................ 86 90 95 79

Personal leave ................................ 14 21 18 8

Funeral leave .................................. 51 60 60 42

Jury duty leave ............................... 59 74 68 47

Military leave ................................... 18 25 22 12

Family leave ................................... 2 3 3 1

Unpaid family leave .......................... 48 53 52 43

Disability benefits2:

Paid sick leave ................................ 50 66 64 35

Short-term disability ........................ 29 32 33 25

Long-term disability insurance ........ 22 39 30 10

Survivor benefits:

Life insurance ................................. 62 72 68 54

Accidental death and

dismemberment ............................ 49 59 53 42

Survivor income benefits ................ 1 3 () 1 1

Health care benefits:

Medical care ................................... 64 76 69 56

Dental care ..................................... 31 40 35 24

Vision care ...................................... 12 14 11 12

Outpatient prescription drug

coverage ....................................... 57 67 61 50

See footnotes at end of table.
5

Table 1. Summary: Participation1 in selected employee benefit programs,

full-time employees, small private establishments, 1996

(In percent) — Continued

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Retirement income benefits:

All retirement4 ................................. 46 56 53 37

Defined benefit ........................... 15 12 16 15

Defined contribution5 .................. 38 51 46 28

Savings and thrift .................... 23 32 29 16

Deferred profit sharing ............ 12 13 17 9

Employee stock ownership ..... 1 2 2 1

Money purchase pension ....... 4 6 3 3

Stock bonus ............................ 3 ( ) 3 ( ) 3 ( ) 3 ( )

Simplified employee pension .. 1 2 1 1

Other ....................................... 3 ( ) 3 ( ) 3 ( ) 3 ( )

Cash or deferred arrangements:

With employer contributions ....... 24 30 31 17

Salary reduction ...................... 24 30 31 17

Savings and thrift6 .............. 21 28 26 14

Deferred profit sharing ........ 2 1 3 2

Other ................................... 1 1 1 1

Deferral of profit sharing

allocation .............................. 3 () - 1 3 ( )

No employer contributions .......... 4 8 4 3

1 Participants are workers covered by a paid time off, insurance, or retirement plan. Employees

subject to a minimum service requirement before they are eligible for benefit coverage are counted

as participants even if they have not met the requirement at the time of the survey. If employees are

required to pay part of the cost of a benefit, only those who elect the coverage and pay their share

are counted as participants. Except for family leave, benefits for which the employees must pay the

full premium are outside the scope of the survey. Only current employees are counted as

participants; retirees are excluded. 2 The definitions for paid sick leave and short-term disability (previously sickness and accident

insurance) were changed for the 1996 survey. Paid sick leave now only includes plans that either

specify a maximum number of days per year or unlimited days. Short-term disability now includes

all insured, self-insured, and state-mandated plans available on a per disability basis as well as the

unfunded per disability plans previously reported as sick leave. Sickness and accident insurance,

reported in years prior to this survey, only included insured, self-insured, and state-mandated plans

providing per disability benefits at less than full pay. 3 Less than 0.5 percent. 4 Includes defined benefit pension plans and defined contribution retirement plans. The total is

less than the sum of the individual items because many employees participated in both types of

plans. 5 The total is less than the sum of the individual items because some employees participated in

more than one type of plan. 6 Participants in savings and thrift plans usually are allowed to make pretax contributions. In the

1996 survey, provisions governing pretax contributions were not determinable for about one-tenth of

the employees with savings and thrift plans.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash

indicates that no data were reported.
6

Table 2. Summary: Participation1 in selected employee benefit programs, full-time employees, small

private establishments, 1996

Benefit All

employees

Professional,

technical, and

related

employees

Clerical and

sales employees

Blue-collar

and

service

employees

Total number of employees .............. 39,816,173 7,979,698 12,279,707 19,556,767

Paid time off:

Holidays .......................................... 31,990,755 6,840,544 11,186,585 13,963,626

Vacations ........................................ 34,410,319 7,184,567 11,681,675 15,544,077

Personal leave ................................ 5,531,089 1,692,639 2,200,006 1,638,444

Funeral leave .................................. 20,407,616 4,775,618 7,423,705 8,208,293

Jury duty leave ............................... 23,519,087 5,870,493 8,406,422 9,242,172

Military leave ................................... 7,019,988 1,994,474 2,760,881 2,264,633

Family leave ................................... 731,559 206,768 353,946 170,845

Unpaid family leave .......................... 18,940,666 4,193,930 6,331,225 8,415,512

Disability benefits2:

Paid sick leave ................................ 20,019,511 5,228,362 7,904,648 6,886,501

Short-term disability ........................ 11,503,163 2,530,498 4,092,653 4,880,012

Long-term disability insurance ........ 8,773,735 3,092,477 3,726,348 1,954,910

Survivor benefits:

Life insurance ................................. 24,634,985 5,764,413 8,326,943 10,543,630

Accidental death and

dismemberment ............................ 19,451,093 4,716,268 6,510,266 8,224,560

Survivor income benefits ................ 247,466 28,681 90,144 128,641

Health care benefits:

Medical care ................................... 25,598,746 6,070,350 8,485,809 11,042,587

Dental care ..................................... 12,223,551 3,153,317 4,296,692 4,773,543

Vision care ...................................... 4,798,209 1,109,782 1,376,624 2,311,803

Outpatient prescription drug

coverage ....................................... 22,521,609 5,319,629 7,443,664 9,758,316

See footnotes at end of table.
7

Table 2. Summary: Participation1 in selected employee benefit programs, full-time employees, small

private establishments, 1996 — Continued

Benefit All

employees

Professional,

technical, and

related

employees

Clerical and

sales employees

Blue-collar

and

service

employees

Retirement income benefits:

All retirement3 ................................. 18,328,263 4,479,704 6,518,565 7,329,994

Defined benefit ........................... 5,883,296 968,843 2,012,541 2,901,912

Defined contribution4 .................. 15,186,989 4,030,764 5,698,729 5,457,495

Savings and thrift .................... 9,313,766 2,584,920 3,550,367 3,178,479

Deferred profit sharing ............ 4,897,063 1,032,154 2,051,822 1,813,086

Employee stock ownership ..... 488,814 152,827 195,436 140,551

Money purchase pension ....... 1,508,457 448,897 395,052 664,507

Stock bonus ............................ 8,799 2,288 6,297 214

Simplified employee pension .. 439,254 173,244 108,880 157,129

Other ....................................... 70,253 37,485 15,363 17,405

Cash or deferred arrangements:

With employer contributions ....... 9,563,065 2,428,068 3,803,450 3,331,547

Salary reduction ...................... 9,501,088 2,428,068 3,757,316 3,315,704

Savings and thrift5 .............. 8,220,168 2,232,175 3,183,440 2,804,553

Deferred profit sharing ........ 871,155 87,365 406,689 377,101

Other ................................... 409,764 108,528 167,186 134,051

Deferral of profit sharing

allocation .............................. 127,351 - 68,198 59,153

No employer contributions .......... 1,635,255 634,191 491,123 509,941

1 Participants are workers covered by a paid time off, insurance, or retirement plan. Employees subject to a minimum

service requirement before they are eligible for benefit coverage are counted as participants even if they have not met the

requirement at the time of the survey. If employees are required to pay part of the cost of a benefit, only those who elect the

coverage and pay their share are counted as participants. Except for family leave, benefits for which the employees must pay

the full premium are outside the scope of the survey. Only current employees are counted as participants; retirees are excluded. 2 The definitions for paid sick leave and short-term disability (previously sickness and accident insurance) were changed for

the 1996 survey. Paid sick leave now only includes plans that either specify a maximum number of days per year or unlimited

days. Short-term disability now includes all insured, self-insured, and state-mandated plans available on a per disability basis as

well as the unfunded per disability plans previously reported as sick leave. Sickness and accident insurance, reported in years

prior to this survey, only included insured, self-insured, and state-mandated plans providing per disability benefits at less than full

pay.3 Includes defined benefit pension plans and defined contribution retirement plans. The total is less than the sum of the

individual items because many employees participated in both types of plans. 4 The total is less than the sum of the individual items because some employees participated in more than one type of plan. 5 Participants in savings and thrift plans usually are allowed to make pretax contributions. In the 1996 survey, provisions

governing pretax contributions were not determinable for about one-tenth of the employees with savings and thrift plans.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash indicates that no data were

reported.
8

Table 3. Other benefits: Eligibility for specified benefits, full-time

employees, small private establishments, 1996

(In percent)

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Income continuation plans:

Severance pay ...................... 15 23 19 9

Supplemental unemployment

benefits ............................... 1 () - 1 ( ) 1 ( )

Family benefits:

Employer assistance for child

care ..................................... 2 4 2 1 ( )

Employer provided funds .. 1 2 2 1 ( )

On-site child care .............. 1 2 1 ( ) 1 ( )

Off-site child care .............. 1 2 1 ( ) 1 ( )

Adoption assistance ............. 1 3 2 1

Long-term care insurance ..... 1 2 2 1

Flexible workplace ................ 1 4 1 1 ( )

Health promotion programs:

Wellness programs ............... 8 11 9 5

Employee assistance

programs ............................ 14 18 19 10

Fitness center ....................... 4 6 5 3

Miscellaneous benefits:

Job-related travel accident

insurance ............................ 12 17 16 7

Nonproduction bonuses ........ 44 44 46 43

Subsidized commuting ......... 1 3 2 1

Education assistance:

Job-related ........................ 38 56 45 27

Not job-related .................. 5 6 6 4

Section 125 cafeteria benefits2: 23 31 29 16

Flexible benefit plans ............ 4 6 6 2

Reimbursement plans ........... 12 18 16 7

Premium conversion plans ... 7 7 7 7

1 Less than 0.5 percent. 2 Includes all types of plans under Internal Revenue Code Section 125. Flexible benefits

plans include reimbursement account features.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates that no data were reported.
9

Table 4. Other benefits: Eligibility for specified benefits, full-time employees, small private

establishments, 1996

Benefit All

employees

Professional,

technical, and

related

employees

Clerical and

sales employees

Blue-collar

and

service

employees

Total number of employees 39,816,173 7,979,698 12,279,707 19,556,767

Income continuation plans:

Severance pay ...................... 5,841,683 1,800,209 2,366,849 1,674,625

Supplemental unemployment

benefits ............................... 78,777 - 11,979 66,798

Family benefits:

Employer assistance for child

care ..................................... 623,793 321,743 218,520 83,529

Employer provided funds .. 399,169 152,057 203,498 43,614

On-site child care .............. 209,231 131,849 26,380 51,002

Off-site child care .............. 241,164 172,357 28,293 40,514

Adoption assistance ............. 579,713 200,189 192,003 187,520

Long-term care insurance ..... 554,769 161,888 215,935 176,946

Flexible workplace ................ 502,908 304,030 172,929 25,948

Health promotion programs:

Wellness programs ............... 3,076,815 871,846 1,160,018 1,044,951

Employee assistance

programs ............................ 5,743,592 1,465,409 2,323,173 1,955,010

Fitness center ....................... 1,662,245 482,346 665,690 514,209

Miscellaneous benefits:

Job-related travel accident

insurance ............................ 4,819,837 1,389,803 1,965,986 1,464,048

Nonproduction bonuses ........ 17,613,211 3,538,712 5,615,899 8,458,600

Subsidized commuting ......... 559,321 218,410 224,937 115,975

Education assistance:

Job-related ........................ 15,191,856 4,442,611 5,556,250 5,192,995

Not job-related .................. 1,994,798 477,924 753,091 763,783

Section 125 cafeteria benefits1: 9,144,521 2,485,893 3,548,225 3,110,403

Flexible benefit plans ............ 1,712,179 475,129 793,717 443,333

Reimbursement plans ........... 4,738,878 1,445,228 1,916,377 1,377,273

Premium conversion plans ... 2,693,464 565,537 838,131 1,289,796

1 Includes all types of plans under Internal Revenue Code Section 125. Flexible benefits plans include reimbursement

account features.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash indicates that no data

were reported.
10

Table 5. Plan administration: Type of plan sponsor for selected employee benefit programs,

full-time employees, small private establishments, 1996

(In percent)

Plan sponsor Medical

care

Life

insurance

Funded

short-term

disability1

Long-term

disability

insurance

Defined

benefit

pension

Savings

and thrift

All participants

Total2 ........................ 100 100 100 100 100 100

Single employer .............. 92 95 93 99 73 98

Multiemployer3 ................ 6 4 6 1 27 4 ( )

Employer association5 .... 2 1 4 ( ) 4 ( ) 4 () 1

Professional, technical, and

related

Total2 ........................ 100 100 100 100 100 100

Single employer .............. 96 98 99 100 85 97

Multiemployer3 ................ 3 1 1 4 ( ) 14 4 ( )

Employer association5 .... 1 1 - 4 () 1 3

Clerical and sales

Total2 ........................ 100 100 100 100 100 100

Single employer .............. 95 98 97 99 91 98

Multiemployer3 ................ 3 1 3 4 () 8 1

Employer association5 .... 2 1 4 () 1 4 () 1

Blue-collar and service

Total2 ........................ 100 100 100 100 100 100

Single employer .............. 87 92 87 98 56 99

Multiemployer3 ................ 11 7 12 2 44 -

Employer association5 .... 2 1 4 ( ) 4 () 1 4 ( )

1 Includes participants in funded short-term disability plans only. See chapter 3 for further discussion of funded

and unfunded short-term disability plans. 2 Total may include participants in plans for which the sponsor was not determinable. 3 Individual employers in the same or in a related industry contributing a negotiated amount to a trust fund

providing benefits for employees covered under a collective bargaining agreement. 4 Less than 0.5 percent. 5 Band of small employers in a common trade or business, for example, savings and loan associations. The plan

sponsored by the association is not negotiated with the employees.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash indicates no

employees in this category.
11

A Note On the Tables

The majority of the tables presented throughout this bulletin indicate the percent of

all employees, or of a selected group of employees, covered by particular benefits and

benefit features. Understanding the group of employees about whom data are being

presented is the key to using these tables; this information is contained in the first row of

each table. Some tables indicate the percent of all employees covered by the survey who

have a certain benefit; other tables show the percent of employees covered by a certain

benefit who have a certain plan feature. Rows where there are no participants reported

are deleted from the tables.

For example, table 1 indicates that 64 percent of all full-time employees were covered by a medical care plan. In chapter 4, most of the tables present data on the percent

of workers with medical care who have certain provisions. Workers with medical care

equal 100 percent in these tables, with smaller percentages indicating the availability of

plan features. For example, in table 44, 100 percent refers to those workers with medical

care plans, and 36 percent indicates those workers with medical care covered by a feefor-service plan.

Another type of table estimate presented throughout the bulletin displays average

benefit values rather than percentages of workers. These averages are presented for all

covered workers; averages exclude workers without the plan provision.

Appendix A discusses all of these data calculations in more detail.
12

The majority of full-time employees work a 40-hour week.

Time off with pay is available to employees in several different forms__from a few days of personal leave to annual

vacations of several weeks. The EBS covers the following

paid time-off benefits: Holidays and vacations; and personal,

funeral, jury-duty, and military leave. Paid and unpaid family leave are also surveyed (tables 6-20). Information on

paid sick leave is discussed under Disability Benefits and

appears in chapter 3.

Work schedules

Weekly work schedules of 40 hours are predominant among

the full-time employees covered by the survey of small private establishments. However, alternatives, such as 35 or

371/

2

 hours per week, are also found among these workers.

Many of full-time employees work five 8-hour days.

A small number of workers studied have either formal

flexible work arrangements or some other form of non-fixed

schedule, which give employees the opportunity to begin

and end work within a range of hours. Limits on the amount

of flexibility vary from plan to plan but, generally, employees have to be at work during midday core hours. Whitecollar workers are more likely to have non-fixed work schedules than are blue-collar workers.

Paid time off

Paid holidays. Paid holidays, commonly 6 to 10 days per

year, are provided to most full-time employees. Floating

holidays and “personal holidays,” such as employee birthdays, are included in the holiday plans reported.

Among the common paid holidays are: New Year’s Day;

Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day. Employers may provide additional days for some holidays, such as the day after

Thanksgiving or Christmas. When a holiday falls on a

scheduled day off, such as a Saturday or Sunday, another

day off is regularly granted to most employees receiving

paid holidays.

Paid vacations. Paid vacations are provided to most fulltime employees in small private establishments. Common

vacation pay provisions for all employees are 5 or 10 days

after 1 year of service; 10 or 15 days after 10 years; and 10,

15 and 20 days after 15 years. Plans covering white-collar

employees, on average, provide slightly more vacation days

than those for blue-collar employees.

In cases when holiday, vacation, sick, or personal leave

are combined under one leave category and cannot be shown

separately, the total amount of leave is reported as vacation

time. For small employers, this was rare. These consolidated leave plans or “leave banks” have been adopted by a

number of establishments, most notably those that must always remain open, such as hospitals and nursing homes.

Almost all full-time employees receive their regular salaries or earnings during vacation periods; the remainder receives either a flat-sum payment or payments based on a

percentage of regular earnings. Anniversary-year bonus

vacation days, such as an extra week of vacation at 10 and

20 years of service, are included in the count of regular

vacation time.

The majority of plans require workers to complete a specified period of time before being able to take a vacation.

The most prevalent length-of-service requirement is 1 year.

The survey also examines carryover and cash-in provisions for unused vacation time. Some full-time workers

are allowed to carry over at least some of their unused vacation days into the next year; others can cash in some or

all of their vacation days at the end of the year. However,

the majority of workers does not have carryover or cash-in

coverage and lose unused vacation days at the end of the

year. White-collar workers are more likely to have carryover

provisions than blue-collar workers, who, in turn, are often

more likely to receive cash-in provisions.

Paid personal leave. Most small employers provide paid

vacations, but few provide formal personal leave. Such leave

allows employees to be absent from work with pay for a

variety of reasons not covered by other specific leave plans.

Most commonly, employees provided personal leave are

eligible for 1 to 3 days per year. A few employees are provided as much personal leave as needed.

Paid funeral leave, jury-duty leave, and military leave.

Approximately half of full-time workers in small private

establishments are eligible for paid leave to attend funerals

of family members. Eligible employees usually receive a

set number of days, commonly 3 days, per occurrence.

However, plans may vary the number of days off by family

relationship to the deceased. For example, a plan may proChapter 2. Work Schedules, Paid Time Off,

and Family Leave
13

vide 3 days off for the death of a spouse, parent, or child,

and 1 day off for the death of other relatives. For employees who do not have a funeral leave plan, some employers

may provide an informal benefit or allow employees to use

other types of paid leave, such as paid sick leave days, to

attend a funeral.

A majority of workers are eligible for paid leave while

serving as a juror. Paid time off for jury duty is usually

provided “as needed”; employer payments commonly make

up the difference between the employee’s regular pay and

the court’s jury allowance.

Military leave, pay for absence from work to fulfill military training or duty commitments, often is not available in

small private establishments. When provided, a common

provision is 10 days off per year, but some establishments

provide paid military leave as needed. Pay for military leave

is either regular pay or the difference between regular pay

and military pay.3

Family leave

The Employee Benefits Survey measures the incidence of

formal family leave benefits (table 20). Previously, the survey estimated parental leave, generally in the form of maternity and paternity leave. 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

during any 12-month period for various family matters.

Employees are now eligible for parental leave for the birth

or adoption of a child and for family illness (employee, child,

spouse, or parent).4 These provisions apply to employees

with 1 year of service who work at least 1,250 hours during

the year and who are employed by companies with 50 or

more workers. In addition, various States require all employers, regardless of employment size, to provide a minimum amount of unpaid parental leave, such as 6 weeks in

Minnesota and 4 months in California.

Paid family leave in small establishments is rare.

3

 For further information on leave items in all sectors, see Michael Miller,

"Time-off Benefits in Small Establishments," Monthly Labor Review, March

1992, pp. 3-8. 4 For more information, see Issues in Labor Statistics: Parental Leave

Benefits Provided by Employers, Summary 93-1, Bureau of Labor

Statistics, 1993.
14

Table 6. Work schedule: Percent of full-time employees by

hours scheduled per week and per day,1 small private

establishments, 1996

Work schedule

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

work schedule .................... 39,816 7,980 12,280 19,557

Percent

Total ................................ 100 100 100 100

Hours per week:

Under 30 ....................... 1 2 () 1 1

30 .................................. 1 1 1 1

Over 30 and under 35 ... 2 1 1 3

35 .................................. 5 6 5 4

Over 35 and under 37.5 2 2 2 2

37.5 ............................... 4 5 6 2

Over 37.5 and under 40 1 1 2 1

40 .................................. 79 77 75 82

Over 40 ......................... 5 8 6 4

Hours per day:

Under 5 ......................... 2 ( ) 2 ( ) 2 ( ) 2 ( )

5 .................................... 2 ( ) 2 ( ) 2 () 1

Over 5 and under 6 ....... 2 () 2 2 ( ) 2 ( )

6 .................................... 1 1 1 1

Over 6 and under 7 ....... 1 2 () 1 2

7 .................................... 4 4 5 4

Over 7 and under 8 ....... 6 7 10 4

8 .................................... 80 78 77 82

Over 8 and under 9 ....... 1 1 2 1

9 .................................... 1 2 2 1

Over 9 and under 10 ..... 2 ( ) 2 () 1 2 ( )

10 .................................. 2 3 1 2

Over 10 ......................... 1 2 2 () 1

1 Work schedule data includes paid lunch and paid rest periods. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
15

Table 7. Work schedule: Percent of full-time employees by

type of work schedule, small private establishments, 1996

Work schedule

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Participants (in thousands) 39,816 7,980 12,280 19,557

Percent

 Total ............................... 100 100 100 100

With fixed work schedule ...... 96 93 97 96

With flexible work schedule .. 1 1 1 1

With rotating work schedule 1 ( ) 1 1 ( ) 1 ( )

With non-fixed work schedule 2 5 2 2

Other ..................................... 1 ( ) 1 ( ) 1 ( ) -

Data not available ................. 1 ( ) 1 ( ) 1 ( ) 1 ( )

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 8. Work schedule: Percent of full-time employees by

weeks scheduled per year, small private establishments, 1996

Work schedule

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

work schedule ..................... 39,816 7,980 12,280 19,557

Percent

Total .................................... 100 100 100 100

Weeks per year:

Under 36 ........................... 1 3 1 ( ) 2

36 and under 52 ............... 3 2 1 4

52 ...................................... 96 95 99 94

Weeks per year not

available ..................... 1 ( ) - - 1 ( )

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
16

Table 9. Paid holidays and vacations: Average number of days for

full-time employees, small private establishments, 1996

Item

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Paid holidays .............................................. 7.6 8.5 7.7 7.0

Paid vacation by minimum length of

service requirement:1

At 1 year2 .............................................. 8.1 10.0 8.6 6.8

At 3 years ............................................. 10.2 11.7 10.5 9.2

At 5 years ............................................. 11.9 13.8 12.3 10.7

At 10 years ........................................... 13.9 16.0 14.3 12.5

At 15 years ........................................... 14.8 17.0 15.4 13.4

At 20 years ........................................... 15.4 17.6 16.1 13.8

At 25 years ........................................... 15.7 17.8 16.4 14.1

At 30 years3 .......................................... 15.7 17.9 16.5 14.2

1 Employees are either granted a specific number of days after completion of the

indicated length of service, or accrue days during the next 12-month period. The total

number of days are assumed available for use immediately upon completion of the

described length-of-service interval. 2 Employees receiving vacation days, but none at 1 year of service, were included

only for the service periods for which they receive vacations. 3 The average (mean) was essentially the same for longer lengths of service.

NOTE: Computation of average included partial days and excluded workers with zero

holidays or vacation days. Methods used to calculate the average number of paid

holidays were revised in 1994 to count partial holidays more precisely. The average

holidays in this table are comparable to those reported in the 1994 survey of small private

establishments but are not comparable to those reported in 1992.
17

Table 10. Paid holidays: Percent of full-time employees by

number of paid holidays provided each year, small private

establishments, 1996

Number of days

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid holidays ....................... 31,991 6,841 11,187 13,964

Percent

Total with paid holidays ............ 100 100 100 100

Less than 6 days .............. 12 6 9 18

6 days ............................... 26 14 29 29

6.1-6.9 days ...................... 1 1 1 1

7 days ............................... 16 15 14 19

7.1-7.9 days ...................... 1 2 1 1 ( )

8 days ............................... 12 16 12 9

8.1-8.9 days ...................... 1 1 2 1

9 days ............................... 8 11 9 6

9.1-9.9 days ...................... 1 3 1 1

10 days ............................. 10 12 10 8

10.1-10.9 days .................. 1 2 1 1 ( )

11 days ............................. 5 6 7 3

11.1-11.9 days .................. 1 2 1 ( ) 1 ( )

12 days ............................. 3 3 3 2

13 days ............................. 1 2 1 1

13.1-13.9 days .................. 1 ( ) 1 ( ) 1 () -

14 days ............................. 1 () 1 1 ( ) 1 ( )

More than 14 days ............ 1 2 1 1 ( )

Number of days not available 1 ( ) 1 ( ) 1 ( ) 1 ( )

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.
18

Table 11. Paid vacations: Percent of full-time employees by

number of paid vacation days provided for selected periods of

service, small private establishments, 1996 — Continued

Vacation policy

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Percent

After 10 years of service:

Over 5 and under 10

days ........................ 2 2 1 2

10 days ......................... 25 17 24 29

Over 10 and under 15

days ........................ 3 3 3 3

15 days ......................... 40 45 44 35

Over 15 and under 20

days ........................ 3 4 4 3

20 days ......................... 10 16 10 7

Over 20 and under 25

days ........................ 1 2 1 1

25 days ......................... 3 () 1 3 ( ) 3 ( )

Over 25 days ................ 3 5 3 2

After 15 years of service:

5 days ........................... 10 2 7 15

Over 5 and under 10

days ........................ 2 2 1 2

10 days ......................... 22 15 22 26

Over 10 and under 15

days ........................ 2 2 2 2

15 days ......................... 31 36 32 28

Over 15 and under 20

days ........................ 3 3 3 3

20 days ......................... 21 27 24 16

Over 20 and under 25

days ........................ 1 3 2 1

25 days ......................... 1 2 2 1

Over 25 and under 30

days ........................ 1 2 1 3 ( )

30 days ......................... 3 ( ) 3 ( ) 3 () 1

Over 30 days ................ 2 3 2 1

After 20 years of service:

5 days ........................... 10 2 7 15

Over 5 and under 10

days ........................ 2 2 1 2

10 days ......................... 22 15 22 26

Over 10 and under 15

days ........................ 2 2 2 2

15 days ......................... 26 31 26 24

Over 15 and under 20

days ........................ 2 1 2 3

20 days ......................... 22 27 25 18

Over 20 and under 25

days ........................ 2 4 2 1

25 days ......................... 5 6 6 4

Over 25 and under 30

days ........................ 1 2 1 3 ( )

30 days ......................... 1 1 1 1

Over 30 days ................ 2 4 2 1

See footnotes at end of table.

Table 11. Paid vacations: Percent of full-time employees by

number of paid vacation days provided for selected periods of

service, small private establishments, 1996

Vacation policy

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid vacations ..................... 34,410 7,185 11,682 15,544

Percent

Total with paid vacations1 ......... 100 100 100 100

Vacation days by minimum

length-of-service

requirement2

After 1 year of service:

Under 5 days ................ 3 2 1 4

5 days ........................... 47 25 40 62

Over 5 and under 10

days ........................ 4 3 3 4

10 days ......................... 35 50 44 21

Over 10 and under 15

days ........................ 3 5 5 1

15 days ......................... 2 6 2 1

Over 15 and under 20

days ........................ 1 1 1 3 ( )

20 days ......................... 3 () 1 3 ( ) 3 ( )

Over 20 days ................ 2 4 2 1

After 3 years of service:

Under 5 days ................ 1 1 1 2

5 days ........................... 15 5 11 24

Over 5 and under 10

days ........................ 5 3 3 6

10 days ......................... 63 64 69 59

Over 10 and under 15

days ........................ 5 7 7 3

15 days ......................... 4 10 4 2

Over 15 and under 20

days ........................ 1 2 1 3 ( )

20 days ......................... 1 2 3 ( ) 3 ( )

Over 20 days ................ 3 5 2 2

After 5 years of service:

Under 5 days ................ 1 1 1 1

5 days ........................... 11 3 8 16

Over 5 and under 10

days ........................ 3 2 2 5

10 days ......................... 45 35 46 49

Over 10 and under 15

days ........................ 5 6 6 5

15 days ......................... 27 38 31 18

Over 15 and under 20

days ........................ 1 2 1 1

20 days ......................... 2 4 1 1

Over 20 days ................ 3 6 3 2

After 10 years of service:

Under 5 days ................ 1 1 1 1

5 days ........................... 10 2 8 15

See footnotes at end of table.
19

Table 11. Paid vacations: Percent of full-time employees by

number of paid vacation days provided for selected periods of

service, small private establishments, 1996 — Continued

Vacation policy

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Percent

After 25 years of service:

5 days ........................... 10 2 7 15

Over 5 and under 10

days ........................ 2 2 1 2

10 days ......................... 22 15 22 26

Over 10 and under 15

days ........................ 2 2 2 2

15 days ......................... 25 31 25 23

Over 15 and under 20

days ........................ 2 1 2 3

20 days ......................... 20 26 21 16

Over 20 and under 25

days ........................ 2 4 2 1

25 days ......................... 8 8 10 6

Over 25 and under 30

days ........................ 1 2 1 3 ( )

30 days ......................... 1 2 1 2

Over 30 days ................ 2 4 2 1

After 30 years of service4

5 days ........................... 10 2 7 15

Over 5 and under 10

days ........................ 2 2 1 2

10 days ......................... 22 15 22 26

Over 10 and under 15

days ........................ 2 2 2 2

15 days ......................... 25 31 25 23

Over 15 and under 20

days ........................ 2 1 2 3

20 days ......................... 19 26 21 15

Over 20 and under 25

days ........................ 2 4 2 1

25 days ......................... 8 7 10 6

Over 25 and under 30

days ........................ 1 2 1 3 ( )

30 days ......................... 2 2 2 2

Over 30 days ................ 2 4 2 1

Vacation policy not available .... 2 2 1 2

1 Employees receiving no paid vacations in their early years of service

are included in the overall percentage of workers provided paid vacations;

however, they are disregarded in computing the distributions by

length-of-service up to the service period at which they become eligible for

vacations. 2 Employees either are granted a specific number of days after

completion of the indicated length-of-service, or accrue days during the next

12 month period. The total number of days are assumed available for use

immediately upon completion of the described length-of-service interval. 3 Less than 0.5 percent. 4 Provisions were virtually the same after longer years of service.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.
20

Table 12. Paid vacations: Percent of full-time employees by

method of payment for vacation periods, small private

establishments, 1996

Type of plan

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with paid

vacation .................................. 34,410 7,185 11,682 15,544

Percent

Total .............................................. 100 100 100 100

Regular salaries or earnings ..... 96 97 98 95

Percent of annual earnings

plans ................................... 1 1 () 1 2

Other2 ....................................... 1 1 ( ) 1 () 1

Data not available ..................... 2212

1 Less than 0.5 percent. 2 Includes flat-sum payments.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.

Table 13. Paid vacations: Percent of full-time employees by

length of service required to take vacation, small private

establishments, 1996

Length-of-service requirement

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with paid

vacations ................................ 34,410 7,185 11,682 15,544

Percent

Total with paid vacations .............. 100 100 100 100

With service requirement .......... 89 85 89 91

1 month ................................. 5962

2 months ............................... 1 1 1 1 ( )

3 months ............................... 5744

4-5 months ............................ 1 ( ) 1 () 1 1 ( )

6 months ............................... 15 21 19 10

7-11 months .......................... 1 ( ) 1 ( ) 1 ( ) 1 ( )

1 year .................................... 62 46 58 72

Over 1 year ........................... 1 - 1 () 1

Without service requirement ..... 9 14 8 7

Service requirement not

determinable ....................... 2132

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.
21

Table 14. Paid vacations: Percent of full-time employees by

unused vacation policy, small private establishments, 1996

Type of plan

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid vacations ..................... 34,410 7,185 11,682 15,544

Percent

Total with paid vacations .......... 100 100 100 100

Carryover only ...................... 18 31 18 12

Cash-in only .......................... 13 7 11 17

Carryover and cash-in .......... 8 8 7 9

Unused benefit lost ............... 57 50 60 57

Data not available ................. 4 4 4 5

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.

Table 15. Paid vacations: Average number of days for full-time employees by carryover and cash-in

provisions, small private establishments, 1996

Paid vacation by minimum

length of service requirement1 All plans

Carryover,

cash-in, or

both

Carryover

only

Cash-in

only

Carryover

and

cash-in

No

caryover or

cash-in

All employees

After 1 year2 ................. 8.1 9.1 10.1 7.5 9.5 7.3

After 3 years ................. 10.2 11.2 12.0 10.3 11.2 9.3

After 5 years ................. 11.9 13.3 14.5 11.9 13.0 10.8

After 10 years ............... 13.9 15.5 16.8 14.0 15.2 12.6

After 15 years ............... 14.8 16.5 17.9 14.8 16.0 13.6

After 20 years ............... 15.4 17.0 18.5 15.2 16.8 14.2

After 25 years ............... 15.7 17.4 19.1 15.3 17.0 14.4

After 30 years3 .............. 15.7 17.4 19.1 15.3 17.1 14.5

1 Employees either are granted a specific number of days after completion of the indicated length of service, or accrue

days during the next 12 month period. The total number of days are assumed available for use immediately upon

completion of the described length-of-service interval. 2 Employees receiving vacation days, but none at 1 year of service, were included only for the service periods for which

they receive vacations. 3 The average (mean) was essentially the same for longer lengths of service.
22

Table 16. Paid personal leave: Percent of employees by

number of paid personal leave days available per year, small

private establishments, 1996

Number of days

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid personal leave ............ 5,531 1,693 2,200 1,638

Percent

Total with paid personal leave .. 100 100 100 100

1 day ..................................... 14 10 20 11

2 days ................................... 27 26 30 24

3 days ................................... 23 30 18 22

4 days ................................... 6 4 6 10

5 days ................................... 7 7 7 7

More than 5 days .................. 6 7 7 2

No maximum specified1 ........ 15 16 11 20

Number of days not available 2 2 () 1 5

Average

 Average days per year ............ 3.0 3.1 2.9 2.9

1 Personal leave provided as needed. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.

Table 17. Paid funeral leave: Percent of employees by number

of paid funeral leave days available per occurrence, small

private establishments, 1996

Number of days

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid funeral leave ............... 20,408 4,776 7,424 8,208

Percent

Total with paid funeral leave ..... 100 100 100 100

1 day ..................................... 4 3 4 6

2 days ................................... 8 9 7 8

3 days ................................... 61 57 61 64

4 days ................................... 1 2 2 1

5 days ................................... 7 10 8 5

More than 5 days .................. 1 ( ) 1 ( ) 1 () 1

No maximum specified2 ........ 14 15 16 11

Number of days not available 4 4 4 4

Number of days varies by

relationship to deceased3 23 20 23 25

Average

 Average days per occurrence .. 3.0 3.1 3.0 2.9

1 Less than 0.5 percent. 2 Funeral leave is provided as needed. 3 The maximum number of days for any occurrence was included in the

distribution of funeral leave day.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.
23

Table 20. Unpaid family leave:1 Percent of full-time employees by duration of

benefits, small private establishments, 1996

Duration All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Number (in thousands) with

unpaid family leave ................. 18,941 4,194 6,331 8,416

Percent

Total with unpaid family leave .. 100 100 100 100

Under 12 weeks ................ 10 11 10 9

12 weeks .......................... 82 78 83 84

Over 12 weeks .................. 8 11 7 7

Average

Average weeks ......................... 12.45 12.43 12.60 12.35

1 The maximum number of weeks available was included in the distribution of unpaid

family leave weeks.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates that no data were reported.

Table 18. Paid jury-duty leave: Percent of employees by

number of paid jury-duty leave days available per occurrence,

small private establishments, 1996

Number of days

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid jury-duty leave ............ 23,519 5,870 8,406 9,242

Percent

Total .......................................... 100 100 100 100

Under 10 days ...................... 8 5 7 12

10 days ................................. 6 5 7 6

Over 10 ................................ 2 1 2 3

No maximum specified1 ........ 83 89 84 80

Number of days not available 2 ( ) 2 ( ) 2 ( ) 2 ( )

1 Jury-duty leave is provided as needed. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.

Table 19. Paid military leave: Percent of employees by

number of paid military leave days available per occurrence,

small private establishments, 1996

Number of days

All

employees

Professional,

technical,

and related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid military leave ............... 7,020 1,994 2,761 2,265

Percent

Total .......................................... 100 100 100 100

Under 10 days ...................... 3 1 2 5

10 days ................................. 47 46 47 48

Over 10 days ........................ 9 5 10 11

No maximum specified1 ........ 40 48 40 35

Number of days not available 1 - 1 2

Average

Average days per year ............. 11.8 11.2 11.4 12.7

1 Military leave is provided as needed.

NOTE: Because of rounding, sums of individual items may not equal totals.

Where applicable, dash indicates no employees in this category.
24

This chapter discusses three types of disability benefits: Sick

leave, short-term disability coverage, and long-term disability insurance. Paid sick leave and short-term disability

plans protect workers against loss of income during temporary absences from work due to illness or accident. During

more extended periods of disability, workers’ incomes may

be continued through long-term disability insurance plans

(tables 21-39). Among the disability benefit provisions

surveyed by the EBS are:

• Plan eligibility requirements

• Benefits waiting periods1

• Amount of benefits

• Duration of benefits

Temporary disability protection, through sick leave, or

short-term disability benefits, or both, is provided to a majority of full-time employees in small private establishments.

Sick leave benefits are designed to replace 100 percent of

the worker’s usual earnings, whereas short-term disability

plans usually replace 50 to 67 percent of pay. (Sick leave

plans may also provide days off at partial pay in addition to

those at full pay. All sick leave tables shown at the end of

this chapter exclude days paid at partial pay.) In small

private establishments, paid sick leave is the main method

for providing protection against income loss due to brief

health-related absences from work.

The definitions of paid sick leave and short-term disability (previously, sickness and accident insurance) were

changed since the last survey of small private establishments. Paid sick leave now includes plans that either specify

a maximum number of days per year or place no limit on

the number of days of sick leave available. Short-term disability now includes all insured, self-insured, and Statemandated plans available on a per-disability basis as well

as the unfunded plans previously reported as per disability

sick leave benefits. Sickness and accident insurance reported in years prior to 1995 only included insured, selfinsured, and State-mandated plans providing per disablitity

benefits at less than full-pay.

Sick leave is provided to half of full-time employees;

short-term disability benefits are available to a smaller number of full-time workers. Workers may have short-term disability coverage in addition to sick leave, with the two benefits coordinated. Coordination can take two forms: Starting

short-term disability benefits after sick leave pay has ended,

or paying both benefits simultaneously. When payments are

made from both sources, sick leave pay is reduced by the

amount of the short-term disability benefits so that the total

benefit does not exceed full salary.

Long-term disability insurance (LTD), which usually

pays 60 percent of earnings, is available to a minority of

full-time employees in small private establishments. LTD

insurance payments most oftenbegin after 3 or 6 months of

disability and continue until retirement age or for a specified number of months, depending on the worker’s age at

the time of disability.

Disability benefits are more prevalent among white-collar workers than among blue-collar and service workers.

Workers in small private establishments, however, are less

likely to be covered for all forms of disability protection

than are their counterparts in medium and large private

establishments.

Paid sick leave

Of the employees covered by paid sick leave plans, the vast

majority are allowed a fixed number of days, such as 8 days

per year (annual sick leave plans). Others might receive

sick leave as needed.

Some employees having annual sick leave plans see an

increase in the number of days granted as their length of

service increases, such as 8 days after 1 year of service, 10

days after 5 and 10 years, and 11 days after 15 years or

longer. Others have fixed benefits regardless of service.

Workers covered by annual plans generally receive full pay

while they are sick and do not normally have to fulfill a

waiting period before benefits begin.

Annual sick leave plans also allow many employees to

carry over and accumulate unused sick leave from year to

year. However, cumulative plans often limit the amount of

sick leave that can be carried over to the next year to 30

days. Other cumulative plans allow workers to accumulate

an unlimited amount of sick leave. Noncumulative plans

commonly provide a greater number of days per year than

cumulative plans. This difference increases as employees

stay on the job longer.

Chapter 3. Disability Benefits

5

 Plan eligibility requirements refer to the length of time that must elapse

between an employee’s first day at work and the day he or she becomes eligible to participate in a benefit plan. Benefits waiting periods refer to the

length of time an employee must wait for the benefits to begin after the onset

of disability. For example, some employees must wait 8 days after they become disabled for benefits to begin under short-term disability plans.
25

Workers are often not eligible for sick leave benefits when

first employed by small private employers. A majority have

to meet service requirements, frequently 3 months, before

they are allowed to join sick leave plans.

Although sick leave is commonly used to replace lost

income while an employee is ill or injured, the majority of

workers use their benefits for other reasons. For example,

using sick leave to care for a sick child or to take care of

personal business is common.

Short-term disability coverage

Short-term disability plans protect employees against income losses due to disabilities lasting up to several months.

The majority of plan participants in small private establishments had their benefits fully paid by their employer

through funded plans, usually self-insured or insured by a

commercial carrier. Unfunded plans include per-disability

plans previously reported as sick leave.

Benefit payments under funded short-term disability

plans are either a percent of employee earnings or a flat

dollar amount. White-collar participants are more likely to

be covered by plans with earnings-based formulas than are

blue-collar participants.

Under earnings-based formulas, the percent of earnings

is usually fixed__commonly 50, 60, or 67 percent__although

some plans may vary the percent by length of service or

length of disability. Some participants in earnings-based

plans have a dollar limit on the amount of the weekly benefit.

Blue-collar workers are the most frequent recipients of

scheduled dollar amount benefits, which provide either a

flat weekly amount, for example, $150 or $200, or weekly

benefits varying by service, earnings, or length of disability.

Short-term disability benefits, unlike sick leave, usually

require a waiting period before benefits begin, most commonly 7 days. Waiting periods may be shortened or eliminated entirely for employees who have been involved in an

accident or hospitalized. For the duration of waiting periods, employees who are offered both types of benefits may

be covered by a sick leave plan.

Virtually all participants were in plans with fixed benefits duration. The maximum number of weeks of coverage was commonly 26 weeks.

Many of the employees with short-term disability insurance have to be on the job for a specified time before the

plan will cover them. This service requirement is usually 3

months or less.

Workers in two States, New Jersey and New York, are

covered by mandatory temporary disability insurance plans

that are at least partially employer financed. Both of these

State plans pay benefits based on a proportion of the worker’s

earnings for up to 26 weeks with a limit on the weekly benefit.6

 The State of Hawaii requires that employers provide

a minimum level of temporary disability income protection

for up to 26 weeks.

Long-term disability insurance

Long-term disability insurance provides a monthly benefit

to employees who, due to illness or injury, are unable to

work for an extended period of time. Generally, LTD benefit payments begin after 3 or 6 months of disability although for some participants, LTD benefits commence after the expiration of sick leave and short-term disability

insurance benefits. Benefits continue until retirement age

or some other specified age. If an employee becomes disabled close to or after the age of 60, the LTD benefits may

continue until the employee turns 65 and becomes eligible

for retirement or Social Security benefits.

Most of the LTD participants in small private establishments have their coverage fully provided by their employers. Those who contribute towards the cost of their LTD

plan may be charged a monthly amount per $100 of covered earnings, for example, $0.20 per $100 of coverage.7

The degree of LTD availability, low overall, varies widely

among employee groups, with white-collar workers more

likely to have the insurance than blue-collar workers. However, employees not covered under LTD insurance may be

eligible for an immediate disability pension through their

retirement plan (chapter 6).

Full-time participants often have to wait 3 or 6 months

after the onset of disability before beginning to receive LTD

payments. Many LTD plan participants receive their LTD

benefit as a fixed percent of predisability earnings, commonly 60 percent of monthly pay.

Most LTD plans have a monthly maximum limit, either

a dollar maximum in plans that pay a fixed percent of earnings, a disability income ceiling, or a combination of both.

Disability income ceilings affect benefits only if the amount

payable from the LTD plan plus income from other sources,

such as Social Security payments, exceed a specified percentage (for example, 70 or 75 percent) of predisability earnings.

Many plans impose service requirements before LTD

coverage begins, often 1 or 3 months.

6

 Both States permit an employer to substitute a private plan for the State

plan if the benefits provided are at least equivalent. In New York, many employers agree to pay the employee’s share of plan costs. California and Rhode

Island also have mandated temporary disability insurance plans, but these

plans require no employer contribution and, thus, are not included in this

survey. 7

 Covered earnings are that portion of a worker’s earnings to which the

replacement rate formula is applied. For example, if an LTD plan pays 60

percent of earnings with a maximum monthly benefit of $3,000, covered earnings would be $5,000 ($3,000 is 60 percent of $5,000).
26

Table 21. Paid sick leave: Percent of full-time employees by

type of provision,1 small private establishments, 1996

Provision

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid sick leave .................... 20,020 5,228 7,905 6,887

Percent

Total with paid sick leave .. 100 100 100 100

Sick leave provision:

Specified number of days2 ... 87 83 88 88

As needed3 ........................... 8 11 8 6

Other basis4 .......................... 5 5 4 5

Policy not available ............... 1 1 1 1

1 Beginning in 1995, plans that provide a specified number of days for

each disability are included under short-term disability benefits. This change

in definition makes comparisons of sick leave between 1994 and later years

difficult. Additionally, because changes in the composition of the employer

sample occur over time, the user should be cautious when making any 

inter-year comparisons of table details. 2 Employees earn or accrue a specified number of sick leave days per

year. This number may vary by length of service. 3 Plan does not specify maximum number of days. 4 Includes formal plans that change from a specified number of days per

year to a specified number of days per absence after a certain service period.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
27

Table 22. Paid annual sick leave: Percent of full-time

employees by number of days,1 small private establishments,

1996 — Continued

Sick leave policy2 All

employees

Whitecollar

employees

Blue-collar

and

service

employees

Percent

After 15 years of service:

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 1 1 1

60 and under 120 days ... 2 2 1

120 and under 180 days 1 1 2

180 days or more ............ - - -

After 20 years of service:

Total ................................ 99 99 98

Under 5 days .................. 13 11 17

5 and under 10 days ....... 55 56 54

10 and under 15 days ..... 24 25 21

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 1 1 1

60 and under 120 days ... 2 2 1

120 and under 180 days 1 1 2

180 days or more ............ 4 ( ) 4 ( ) -

After 25 years of service5

:

Total ................................ 99 99 98

Under 5 days .................. 13 11 17

5 and under 10 days ....... 55 56 54

10 and under 15 days ..... 24 25 21

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 1 1 1

60 and under 120 days ... 2 2 1

120 and under 180 days 1 1 2

180 days or more ............ 4 ( ) 4 ( ) -

1 Beginning in 1995, plans that provide a specified number of days for

each disability are included under short-term disability benefits. This change in

definition makes comparisons of sick leave between 1994 and later years

difficult. Additionally, because changes in the composition of the employer

sample occur over time, the user should be cautious when making any 

inter-year comparisons of table details. 2 Employees receiving partial pay only or no sick leave in their early years

of service are included in the overall percentages of workers provided sick

leave; however, they are disregarded in computing the distributions by length

of service up to the service period at which they become eligible for full sick

leave pay. 3 Employees are either granted a specific number of days after completion

of the indicated length of service, or accrue days during the next 12-month

period. The total number of days are assumed available for use immediately

upon completion of the described length-of-service interval. 4 Less than 0.5 percent. 5 Provisions were virtually the same after longer periods of service.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates that no data were reported.

Table 22. Paid annual sick leave: Percent of full-time

employees by number of days,1 small private establishments,

1996

Sick leave policy2 All

employees

Whitecollar

employees

Blue-collar

and

service

employees

Number (in thousands) with

paid annual sick leave ...... 17,363 11,281 6,082

Percent

Total with paid annual sick

leave3 ............................... 100 100 100

After 1 year of service:

Total ................................ 98 99 96

Under 5 days .................. 15 13 18

5 and under 10 days ....... 57 58 55

10 and under 15 days ..... 22 25 18

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 4 ( ) 1 4 ( )

60 and under 120 days ... 4 ( ) 1 -

120 and under 180 days 1 4 ( ) 2

180 days or more ............ - - -

After 3 years of service:

Total ................................ 99 99 98

Under 5 days .................. 15 12 19

5 and under 10 days ....... 55 56 54

10 and under 15 days ..... 24 26 20

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 2 2 1

60 and under 120 days ... 1 1 4 ( )

120 and under 180 days 1 4 ( ) 2

180 days or more ............ - - -

After 5 years of service:

Total ................................ 99 99 98

Under 5 days .................. 14 11 18

5 and under 10 days ....... 55 56 54

10 and under 15 days ..... 24 26 20

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 1 1 1

60 and under 120 days ... 2 3 1

120 and under 180 days 1 4 ( ) 2

180 days or more ............ - - -

After 10 years of service:

Total ................................ 99 99 98

Under 5 days .................. 13 11 17

5 and under 10 days ....... 56 56 54

10 and under 15 days ..... 24 25 21

15 and under 30 days ..... 2 2 2

30 and under 60 days ..... 1 1 1

60 and under 120 days ... 2 3 1

120 and under 180 days 1 1 2

180 days or more ............ - - -

After 15 years of service:

Total ................................ 99 99 98

Under 5 days .................. 13 11 17

5 and under 10 days ....... 55 56 54

10 and under 15 days ..... 24 25 21

See footnotes at end of table.
28

Table 23: Paid annual sick leave: Average number of

days1 at full pay for full-time employees, small private

establishments, 1996

Sick leave policy

All

employees

Whitecollar

employees

Bluecollar

and

service

employees

Paid annual sick leave days2 by

minimum length-of-service:

After 1 year ......................... 8.0 7.6 8.8

After 3 years ....................... 8.7 8.4 9.2

After 5 years ....................... 9.5 9.5 9.6

After 10 years ..................... 10.3 10.3 10.1

After 15 years ..................... 10.5 10.7 10.1

After 20 years ..................... 10.8 11.2 10.1

After 25 years3 .................... 10.9 11.3 10.1

1 Beginning in 1995, plans that provide a specified number of

days for each disability are included under short-term disability

benefits. This change in definition makes comparisons of sick

leave between 1994 and later years difficult. Additionally, because

changes in the composition of the employer sample occur over

time, the user should be cautious when making any inter-year

comparisons of table details. 2 Employees are either granted a specific number of days after

completion of the indicated length of service, or accrue days during

the next 12-month period. The total number of days are assumed

available for use immediately upon completion of the described

length-of-service interval. 3 The average (mean) was virtually the same after longer years

of service.

NOTE: Computation of average excluded days at partial pay and

workers with only partial pay days or zero days of sick leave.

Table 24: Paid annual sick leave:1 Percent of full-time

employees by unused sick leave policy and carryover

provisions, small private establishments, 1996

Unused sick leave and

carryover provisions

All

employees

Whitecollar

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid annual sick leave ........ 17,363 11,281 6,082

Percent

Total with paid annual sick

leave ................... 100 100 100

Carryover only .......................... 33 37 27

Cash-in only .............................. 13 12 17

Carryover and cash-in .............. 5 5 6

Unused benefit lost ................... 46 45 49

Data not available ..................... 2 3 1

Total with carryover

provisions ............... 100 100 100

Unlimited accumulation ............ 29 29 28

Limit on total number of days

accumulated

Total ...................................... 70 70 69

Under 10 days ...................... 7 6 8

10 days ................................. 3 3 3

11-19 days ............................ 8 7 10

20 days ................................. 6 6 5

21-24 days ............................ 1 1 2 ( )

25 days ................................. 2 2 1

26-29 days ............................ 2 () 1 -

30-39 days ............................ 15 13 18

40-49 days ............................ 6 4 9

50 days ................................. 2 2 3

51-64 days ............................ 8 9 4

65 days ................................. 1 1 2 ( )

66-79 days ............................ 2 3 -

80-89 days ............................ 2 ( ) 2 () -

90-99 days ............................ 5 6 3

100-109 days ........................ 1 1 2 ( )

120-129 days ........................ 1 1 1

130 days ............................... 3 3 2

Over 130 days ...................... 1 1 1

Other3 ....................................... 1 2 () 2

1 Beginning in 1995, plans that provide a specified number of

days for each disability are included under short-term disability

benefits. This change in definition makes comparisons of sick

leave between 1994 and later years difficult. Additionally, because

changes in the composition of the employer sample occur over

time, the user should be cautious when making any inter-year

comparisons of table details. 2 Less than 0.5 percent. 3 Carryover provisions vary by length of service.

NOTE: Because of rounding, sums of individual items may not

equal totals. Where applicable, dash indicates that no data were

reported.
29

Table 26: Paid annual sick leave:1 Percent of full-time

employees by length of service requirement for participation,

small private establishments, 1996

Length of service requirement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid annual sick leave ........ 17,363 4,360 6,921 6,082

Percent

Total with paid annual sick

leave ............................. 100 100 100 100

With service requirement .......... 67 60 66 73

1 month ................................. 15 17 14 16

2 months ............................... 3 2 3 4

3 months ............................... 23 21 24 22

4-5 months ............................ 2 ( ) 2 ( ) 2 ( ) 2 ( )

6 months ............................... 11 10 10 13

7-11 months .......................... 2 () - 2 () -

1 year .................................... 14 11 14 18

Over 1 year ........................... 1 - 1 2

Without service requirement ..... 32 40 33 26

Data not available ..................... 1 2 () 1 2 ( )

1 Beginning in 1995, plans that provide a specified number of days for

each disability are included under short-term disability benefits. This change

in definition makes comparisons of sick leave between 1994 and later years

difficult. Additionally, because changes in the composition of the employer

sample occur over time, the user should be cautious when making any 

inter-year comparisons of table details. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 25: Paid annual sick leave:1 Average

number of days at full pay for full-time

employees by accumulation policy, small

private establishments, 1996

Sick leave policy All

occupations

Sick leave days by minimum

length-of-service

requirement:2

After 1 year of service:

Cumulative plan ................ 8.1

Noncumulative plan .......... 8.0

After 3 years of service:

Cumulative plan ................ 8.4

Noncumulative plan .......... 9.0

After 5 years of service:

Cumulative plan ................ 8.8

Noncumulative plan .......... 10.1

After 10 years of service:

Cumulative plan ................ 9.1

Noncumulative plan .......... 11.1

After 15 years of service:

Cumulative plan ................ 9.2

Noncumulative plan .......... 11.5

After 20 years of service:

Cumulative plan ................ 9.2

Noncumulative plan .......... 12.0

After 25 years of service:3

Cumulative plan ................ 9.2

Noncumulative plan .......... 12.1

Data not available ..................... 4 ( )

1 Beginning in 1995, plans that provide a specified

number of days for each disability are included under

short-term disability benefits. This change in definition

makes comparisons of sick leave between 1994 and

later years difficult. Additionally, because changes in

the composition of the employer sample occur over

time, the user should be cautious when making any 

inter-year comparisons of table details. 2 Employees are either granted a specific number

of days after completion of the indicated length of

service, or accrue days during the next 12-month

period. The total number of days are assumed

available for use immediately upon completion of the

described length-of-service interval. 3 The average (mean) was virtually the same at

longer years of service. 4 Less than 0.5 percent.

NOTE: Computation of average excluded days paid

at partial pay and workers with only partial pay days or

zero days of sick leave.
30

Table 28. Short-term disability: Method of funding, full-time

employees, small private establishments, 1996

Type of funding

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

short-term disability ............ 11,503 2,530 4,093 4,880

Percent

Total with short-term disability .. 100 100 100 100

Unfunded1 ............................ 9 12 13 5

Insured .................................. 31 27 32 32

Self-insured .......................... 24 32 23 20

Legally required .................... 32 29 29 35

Unknown ............................... 2 2 () 2 4

Other ..................................... 2 2 () 1 4

1 Includes per disability sick leave plans, formerly reported under sick

leave. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 29. Short-term disability: Method of payment, full-time

employees, small private establishments, 1996

Method of payment

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

funded short-term disability 10,446 2,237 3,566 4,643

Percent

Total with funded short-term

disability .............................. 100 100 100 100

Flat dollar amount ................. 15 8 8 23

Flat percent of earnings ........ 77 85 80 71

Percent varies1 ..................... 5 6 7 3

Dollar amount varies1 ........... 2 1 2 2

Other ..................................... 1 1 2 -

Not determinable .................. 2 () - 2 () 1

1 Benefits may vary by earnings, length of service, or length of disability. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 27: Paid annual sick leave:1 Percent of full-time

employees in plans allowing use of sick leave for other

purposes, small private establishments, 1996

Other purposes

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

paid annual sick leave ........ 17,363 4,360 6,921 6,082

Percent

Total with paid annual sick

leave ................... 100 100 100 100

Other purposes allowed2 .......... 73 76 74 71

Funerals ................................ 20 20 20 21

Doctors’ appointments .......... 67 72 66 65

Personal business ................ 21 20 21 23

Care of sick child .................. 58 63 61 52

Other ..................................... 13 11 14 12

Other purposes not allowed ...... 21 17 21 24

Data not available ..................... 6 8 6 5

1 Beginning in 1995, plans that provide a specified number of days for

each disability are included under short-term disability benefits. This change

in definition makes comparisons of sick leave between 1994 and later years

difficult. Additionally, because changes in the composition of the employer

sample occur over time, the user should be cautious when making any 

inter-year comparisons of table details. 2 This total is smaller than the sum of the components because some

employees could use sick leave for more than one other purpose.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
31

Table 30. Short-term disability: Fixed percent of earnings

amounts, full-time employees, small private establishments,

1996

Fixed percent of earnings

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

fixed percent of earnings

benefit ................................. 8,050 1,895 2,867 3,288

Percent

Total with flat percent of

earnings benefit .................. 100 100 100 100

Less than 50 percent ........... 1 1 () - 2

50 percent ............................. 41 32 35 51

51 - 59 percent ..................... 2 1 2 3

60 percent ............................. 19 32 16 14

61 - 69 percent ..................... 26 22 33 21

70 percent ............................. 7 5 8 7

71 - 79 percent ..................... 1 2 1 () -

80 percent or more ............... 4 5 6 2

Average2

Average fixed percent of

earnings benefit .................. 60 61 62 57

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 31. Short-term disability: Type of waiting period,

full-time employees, small private establishments, 1996

Waiting period

provision

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

funded short-term disability 10,446 2,237 3,566 4,643

Percent

Total with funded short-term

disability .......................... 100 100 100 100

Waiting period not

dependent on sick

leave ........................... 85 81 83 89

Waiting period begins after

sick leave .................... 5 10 5 2

Later of waiting period or

sick leave1 .................. 2 3 1 2

Earlier of waiting period or

sick leave2 .................. 3 ( ) 3 () 1 3 ( )

Not determinable .............. 8 6 10 7

1 Benefits begin when sick leave is exhausted or the waiting period is

completed, whichever is later. 2 Benefits begin when sick leave is exhausted or the waiting period is

completed, whichever is earlier. 3 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals.
32

Table 32. Short-term disability: Length of waiting period,

full-time employees, small private establishments, 1996

Length of waiting period

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

funded short-term disability 10,446 2,237 3,566 4,643

Percent

Total with funded short-term

disability .............................. 100 100 100 100

Immediate ............................. 1 () – 1 ( ) 1 ( )

Less than 5 days .................. 3 5 2 3

5 days ................................... 5 2 6 5

6 days ................................... 1 ( ) 1 () 1 –

7 days ................................... 65 58 58 73

8 days ................................... 9 13 10 6

9 days ................................... 1 () 1 1 () –

10 days ................................. 2 4 2 2

Greater than 10 days ............ 8 12 11 4

Not determinable .................. 8 6 10 7

Average

Average waiting period (in

days) ................................... 8997

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 33. Short-term disability: Duration of benefits, full-time

employees, small private establishments, 1996

Duration of benefits

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

funded short-term disability 10,446 2,237 3,566 4,643

Percent

Total with funded short-term

disability .............................. 100 100 100 100

Fixed duration ....................... 95 94 92 98

Less than 13 weeks .......... 5 7 8 2

13 weeks .......................... 12 10 12 13

14 - 25 weeks ................... 5 11 4 2

26 weeks .......................... 68 63 63 75

27 - 51 weeks ................... 1 ( ) 1 ( ) 1 ( ) 1 ( )

52 weeks .......................... 4 3 4 5

Greater than 52 weeks ..... 1 – 1 () 1

Duration varies ..................... 3 2 7 2

Not determinable .................. 1 4 1 1

 Average2

Average benefit duration (in

weeks) ................................ 25 24 24 26

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals.
33

Table 34. Short-term disability: Eligibility requirements,

full-time employees, small private establishments, 1996

Eligibility requirement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

funded short-term disability 10,446 2,237 3,566 4,643

Percent

Total with funded short-term

disability .............................. 100 100 100 100

With a service requirement ... 44 41 47 42

1 month ............................. 13 16 13 11

2 months ........................... 6 3 7 7

3 months ........................... 18 15 18 19

4 -5 months ....................... 1 () - 1 () -

6 months ........................... 4 4 5 4

7 - 11 months .................... 1 () - - 1 ( )

12 months ......................... 2 4 3 1

Greater than 12 months .... 1 ( ) 1 () 1 -

Without a service

requirement .................... 49 51 46 51

Not determinable .................. 7 8 6 7

Average2

Average service requirement (in

months) ............................... 3.5 3.4 4.2 2.9

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 35. Short-term disability: Employee contribution

provisions, full-time employees, small private

establishments, 1996

Employee

contribution

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands)

with funded

short-term disability 10,446 2,237 3,566 4,643

Percent

Total with short-term

disability .................. 100 100 100 100

With required

employee

contribution ......... 26 22 27 27

Dollar amount ....... 11 10 10 13

Percent of

earnings .......... 6386

Varies ................... 1 3 1 1 ( )

Composite rate ..... 5355

Flexible benefit ..... 2211

Other ..................... 1 1 1 1 ( )

Contribution,

amount

unknown ......... 1 1 () 1 1

No required

employee

contribution ......... 66 71 65 65

Not determinable ...... 8778

1 Less then 0.5 percent.

NOTE: Because of rounding, sums of individual items may not

equal totals. Where applicable, dash indicates no employees in this

category.
34

Table 36. Long-term disability insurance: Benefit waiting

period,1 full-time employees, small private establishments,

1996

Length of waiting period

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

long-term disability

insurance ............................ 8,774 3,092 3,726 1,955

Percent

Total with long-term disability

insurance ............................ 100 100 100 100

Fixed duration month ............ 80 81 78 83

Less than 3 months .......... 5 5 5 3

3 months ........................... 34 37 33 30

4 - 5 months ...................... 1 1 2 () 2

6 months ........................... 36 35 37 35

Greater than 6 months ...... 5 2 3 13

Expiration of short-term

disability benefits ............ 14 13 15 13

Other ..................................... 1 2 1 1

Not determinable .................. 5 5 5 4

Average3

Average fixed duration (in

months) ............................... 5.0 4.6 4.6 6.4

1 Length of time between onset of disability and beginning of long-term

disability insurance payments. 2 Less than 0.5 percent. 3 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 37. Long-term disability insurance: Method of payment,

full-time employees, small private establishments, 1996

Method of payment

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

long-term disability

insurance ............................ 8,774 3,092 3,726 1,955

Percent

Total with long-term disability

insurance ............................ 100 100 100 100

Fixed percent of earnings ..... 94 95 94 94

Less than 50 percent ........ 2 1 2 2

50 percent ......................... 9 7 10 11

51 - 59 percent ................. 1 ( ) 1 ( ) 1 ( ) 1 ( )

60 percent ......................... 61 66 54 67

61 - 66 percent ................. 3 3 4 1

67 percent ......................... 13 10 17 12

70 percent ......................... 5 6 7 1 ( )

Greater than 70 percent ... 1 1 1 ( ) 1 ( )

Percent varies by earnings ... 2 2 2 1

Percent varies by other than

earnings .......................... 1 1 () 2 1

Flat dollar amount (per

month) ............................ 3 2 2 4

Other ..................................... 1 ( ) 1 ( ) 1 () -

Dollar amount varies ............. 1 ( ) 1 () - -

Average2

Average fixed percent of

earnings .............................. 60.5 60.8 60.8 59.4

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
35

Table 38. Long-term disability insurance: Maximum benefits1

based on percent of earnings formulas, full-time employees,

small private establishments, 1996

Maximum benefit

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

percent of earnings benefit 8,512 3,012 3,623 1,877

Percent

Total with percent of earnings

benefit ................................. 100 100 100 100

With maximum ...................... 84 81 87 81

Flat maximum per month .. 82 81 85 78

$1,500 or less ............... 4 2 2 12

$1,501 - $2,000 ............ 4 3 4 3

$2,001 - $3,000 ............ 6 6 6 6

$3,001 - $4,000 ............ 3 4 2 3

$4,001 - $5,000 ............ 29 32 25 32

$5,001 - $7,500 ............ 14 17 13 9

$7,501 - $10,000 .......... 14 8 22 8

$10,001 or more ........... 9 8 11 5

Other maximum2 .............. 2 3 () 2 2

No maximum ........................ 16 19 13 19

Average4

Average flat maximum benefit

(per month) ......................... $6,973 $6,676 $7,939 $5,455

1 Excludes limits on all disability income, which restrict long-term

disability insurance payments if income from all sources exceeds a specified

amount. 2 Includes maximums that vary by length of service. 3 Less than 0.5 percent. 4 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 39. Long-term disability insurance: Eligibility

requirements, full-time employees, small private

establishments, 1996

Length of service

requirement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

long-term disability

insurance ............................ 8,774 3,092 3,726 1,955

Percent

Total with long-term disability

insurance ............................ 100 100 100 100

With a service requirement ... 65 58 70 66

1 month ............................. 21 20 26 11

2 months ........................... 3 2 3 4

3 months ........................... 23 20 22 29

4 -5 months ....................... 1 ( ) 1 ( ) 1 () -

6 months ........................... 12 9 13 15

7 - 11 months .................... 1 () 1 - -

12 months ......................... 5 5 4 6

Greater than 12 months .... 1 1 2 1

Without a service

requirement .................... 28 35 21 28

Not determinable .................. 8 7 10 6

Average2

Average service requirement (in

months) ............................... 4.1 3.8 4.2 4.5

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
36

Medical Care

Many full-time employees in small private establishments

have medical care benefits. The Employee Benefits Survey

covers a number of medical care benefit provisions, discussed throughout this chapter, including:

• Required employee contributions

• Types of plans

• Coverage for hospitalization and surgery

• Plan cost containment features

• Prescription drug benefits

• Mental health and substance abuse treatment benefits

• Coverage for retired workers

• Details of dental and vision care plan provisions

Employee contributions

About one-half of full-time medical care benefit participants

had to pay part of the cost for individual coverage; threefourths of full-time participants were required to contribute

toward family coverage (tables 41-43).

Employees required to contribute toward the cost of their

medical care coverage may be given the opportunity to do

so with pretax dollars. These employees have the advantage of reducing their taxable income when purchasing

medical coverage. Pretax contributions may be required or

optional, and they may be offered as part of a flexible benefits arrangement. (For definition, see chapter 8.)

Types of medical care plans

Either traditional fee-for-service plans, preferred provider

organizations (PPO), or health maintenance organizations

(HMO) covered full-time workers having medical benefits

(table 44). These plans represent differences in fee arrangements, that is, the method of selecting medical service providers and paying for care.

In a traditional fee-for-service plan, a type of fee arrangement, patients may choose any provider and pay for specific medical procedures as expenses are incurred. There

are three main arrangements for financing plan benefits:

Self-insured plans, commercially insured plans, and Blue

Cross/Blue Shield plans. Under self-insured plans, the plan

sponsor—usually the employer—bears the financial risk of

paying for covered medical services. Commercially insured

plans and Blue Cross/Blue Shield plans cover most of the

other traditional fee-for-service participants. In addition, a

small proportion of traditional fee-for-service participants

has their benefits financed by more than one source.

Establishments that self-insure their medical care benefits may enter into an “administrative services only” (ASO)

contract with a third party to pay claims and handle other

administrative details. In such a case, the employer is still

responsible for financing all medical care claims. Another

arrangement available to self-insured plans is a minimum

premium plan, which is insurance coverage to pay claims

above a specified amount. Such arrangements limit the

employer’s liability in the case of catastrophic expenses.

PPOs, which have become widespread since first studied in the Employee Benefits Survey of medium and large

private establishments in 1986, offer a higher level of reimbursement for services rendered by designated health

care providers (such as hospitals and physicians), although

participants are free to choose any provider. Designated

providers agree in advance to a given fee schedule.

Financing arrangements for PPOs are similar to those

used for traditional fee-for-service plans. Typically, PPOs

are financed through a commercial insurer, a Blue Cross/

Blue Shield organization, or are self-insured.

PPOs are a type of fee-for-service plan because care providers are not reimbursed until services are performed. In

this way, traditional fee-for-service plans and PPOs can be

contrasted with HMOs (described below), which prepay

providers a fixed amount for services performed over a given

time period. Throughout this chapter, features found in

HMOs are contrasted with those found in non-HMOs (both

fee-for-service plans and PPOs).

HMOs, another arrangement that increased enrollment

during the 1980’s, provide a prescribed set of benefits to

enrollees for a fixed payment. The HMO thus bears the

risk associated with delivering care.8

 Commonly, HMOs

are classified as either group/staff, with services provided

Chapter 4. Medical, Dental, and Vision Care

8 For a more detailed discussion on HMOs, see Thomas P. Burke and Rita

S. Jain, “Trends in Employer-Provided Health Care Benefits,” Monthly

Labor Review, February 1991, pp. 24-30.
37

in central facilities, or as individual practice associations

(IPAs), with providers working from their own offices. Some

HMOs combine features of both of these arrangements.

HMO’s may be financed through independent organizations, commercial insurers, or Blue Cross/Blue Shield organizations. Independent organizations, such as Kaiser

Permanente, are most prevalent.

Some HMO participants may be in plans with a “pointof-service” option. Such an option allows patients to receive services from a non-HMO provider at a lower reimbursement than if care is received from the designated HMO

provider. HMOs nearly always include coverage for hearing care, physical examinations, well-baby care, and immunizations and inoculations. HMOs must include these

benefits to qualify under the Health Maintenance Organization Act of 1973, as amended.9

Fee-for-service plans

Fee-for-service plans allow patients to choose their own

providers and reimburse the patient or the provider after

services are received. Benefits are commonly subject to

limitations that apply to many or all services, including

deductibles, coinsurance, out-of-pocket expense limits, and

plan maximums. These limitations come under the major

medical coverage of the plan.

Generally, fee-for-service plans require a participant to

meet a specified deductible before beginning to reimburse

the costs of eligible expenses. This approach is designed to

discourage unnecessary use of medical services. Deductibles

are usually specified as an annual flat-dollar amount, often

$200 or more per individual.

When medical care plans cover an employee and family,

a family deductible is often specified in addition to individual deductibles. There are two general types of family

deductibles. In the first type, the family deductible is a

multiple amount (two or three times, for example) of the

individual deductible. To satisfy this deductible, one family member must meet an individual deductible, then another family member or a combination of family members

must meet the remaining amount of the family deductible.

In the second type, the plan specifies the number of family

members (usually two or three) required to meet separate

individual deductibles. After the required number of family members meet individual deductibles, no additional individual deductibles are required during that year.

Once the deductible has been met, the plan usually pays

a specified percentage of covered medical expenses—most

commonly 80 percent—with the employee paying the remainder (coinsurance). Alternatively, plans may have a

different coinsurance rate for certain services, such as hospital room and board and outpatient surgery.

Generally, participants in fee-for-service plans have their

coinsurance increased to 100 percent after they pay a specified dollar amount for covered expenses (out-of-pocket expense limit), for example $1,000 per individual. Frequently,

out-of-pocket expense limits are also specified for family

expenses. As used here, the term “out-of-pocket expense

limit” refers to the coinsurance amount paid by a plan participant. A deductible, if required, is an additional expense

the participant must pay.

A plan’s out-of-pocket expense limit protects the participant from catastrophic medical expenses. For example,

assume a plan has a $250 annual deductible and then pays

80 percent of medical expenses up to an out-of-pocket expense limit of $2,000, above which the plan’s share of expenses rises to 100 percent. In this case, the employee pays

the first $250 of expenses and $2,000 (20 percent) of the

next $10,000 of expenses. Covered expenses above $10,000

are paid in full by the plan.

Fee-for-service plans frequently place a lifetime ceiling

on the amount payable by the plan; a maximum of $1 million is common. The limits described above apply to all or

most medical benefits eligible for reimbursement under feefor-service plans; they are generally referred to as major

medical or overall limits.

Preferred provider organizations (PPOs)

In a preferred provider organization, participants are provided medical services at a higher level of reimbursement

if they receive care from designated hospitals, physicians,

laboratories, or dentists. Individuals may choose their own

provider, although generally at a lower level of reimbursement.

In PPOs, as in traditional fee-for-service plans, benefits

are usually subject to limitations including deductibles, coinsurance, out-of-pocket expense limits, and plan maximums that apply to many or all services. These limitations

can differ depending on whether the care is provided by a

designated provider or someone who provides care outside

the network. For example, assume that an individual’s total covered medical expenses are $3,600 in one year. When

care is provided within the PPO network, the plan pays 90

percent of expenses, or $3,240. When care is provided outside the PPO network, the plan imposes a $100 a year deductible and reimburses 80 percent of the remaining expenses. Thus, outside the PPO network the plan pays $2,800

of the expenses.

PPOs may also vary the way payments are made, based

on the provider used. For example, services received from

non-network providers may be subject to a plan deductible

and coinsurance. Network services, alternatively, may be

subject only to a small copayment, such as $10 per office

visit or $5 per prescription. The remaining cost of such

services is borne by the plan.

Health maintenance organizations (HMOs)

Health maintenance organizations provide a fixed set of

medical benefits for a prepaid fee. Generally, medical services are either covered in full or require patients to pay a

2

 Under this Act, an HMO must provide certain coverage, such as home

health care, physical examinations, and children’s eye and ear examinations.

Under certain circumstances, employers may be required to offer employees

medical care coverage through federally qualified HMOs.
38

minimal copayment. Typical copayments are $5 or $10 per

physician’s office visit or $5 or more per prescription.

HMOs encourage preventive care, including physical

examinations, vision screening, hearing care, well baby care,

and immunization and inoculation. A majority of HMO

participants are in federally qualified plans; Federal qualification provides advantages when soliciting new participants. HMOs must provide a minimum group of benefits,

such as home health care, well baby care, and hearing care,

to become federally qualified.

Cost containment

In addition to data on the extent of coverage for specific

medical services, the survey captures the details of medical

plans with either benefit management programs, managed

care plans, or review boards. These programs help make

sure that the services rendered are medically necessary and

are provided in the most appropriate health care setting.

Generally, medical care participants are in plans that

have some form of “managed care.” This includes all participants in HMO and PPO plans, in which the plans manage care by directing patients to specific providers or services. In addition, many participants in traditional

fee-for-service plans have coverage subject to at least one

managed care feature. These features could include

preadmission certification for hospitalization, preadmission

testing, and mandatory second surgical opinion.

Advanced managed care programs may consist of four

or more features. Included among them are preadmission

review of all hospital admissions for nonemergency or

nonmaternity care, concurrent review to monitor care while

hospitalized, discharge planning to coordinate a continued

course of treatment in more appropriate health care settings, and mandatory second surgical opinions for selected

procedures

Several other cost containment features are common:

• Utilization review is the process of reviewing the ap-

- propriateness and quality of care provided to patients

• Higher level of reimbursement for prehospitalization

testing is used as a means of decreasing the length of

hospitalization

• Incentives for the employee to audit hospital bills may

be included in some fee-for-service plans

Medical care plans can also require a separate deductible for hospital admission to discourage unnecessary hospitalization. These deductibles are often between $100 and

$500 per hospital admission.

In traditional fee-for-service plans and PPOs, second

surgical opinion provisions apply to inpatient surgical benefits. Plan enrollees frequently receive lower levels of reimbursement if they do not obtain second opinions.

By their very nature, HMOs emphasize preventive, cost

efficient medical care. Built-in forms of utilization review,

including second surgical opinions, are automatically provided.

Hospital coverage

All medical plan enrollees covered by the survey have coverage for hospital room and board charges. (Coverage also

extends to “miscellaneous” charges while hospitalized, such

as routine nursing care, prescription drugs, and surgical

dressings.) Many plans cover hospital room and board expenses subject only to major medical or overall limits. The

overall coinsurance in such plans applies to the semiprivate hospital room rates. Other plans have hospital room

and board expenses covered at the full semiprivate room

rate for a specified period (365 days per confinement, for

example); the remainder of eligible expenses are paid under the major medical portion of the plan. Some plans reimburse expenses at the full semiprivate room rate for an

unlimited number of days without imposing either a deductible or dollar maximum.

Significant differences in hospital room and board coverage are evident by type of medical care provider. HMO

participants are much more likely to have hospitalization

covered in full by their plans than are their non-HMO counterparts. When there is a limit on room and board coverage

in HMOs, it is usually a copayment per admission, often

between $100 and $300.

Variations in coverage by type of medical care provider

for hospital stays, as well as other categories of care, can

affect the enrollees’ out-of-pocket expenses. Non-HMO plan

participants generally pay a higher percentage of total health

care expenses than do HMO participants.10

Alternatives to hospitalization

To help hold down the costs of medical care, plans often

provide coverage for less expensive alternatives to a hospital stay. These alternatives include extended care facilities,

home health care, and hospices. Coverage patterns differ

between HMO and non-HMO participants. HMOs cover

extended care and home health care more frequently than

do for fee-for-service plans. Hospice care, however, is available more often to non-HMO participants.

Extended care facilities provide skilled nursing care,

rehabilitation, and convalescent services to patients requiring less intensive treatment than that provided in a hospital. HMO’s and non-HMOs provide coverage for stays in

extended care facilities. Plans, especially non-HMOs, often limit the duration of covered stays in extended care facilities. Under non-HMOs, coverage may be limited to 60

or 120 days per confinement; under HMOs, limits are usually 100 days per year.

10 For more information regarding out-of-pocket expenses for medical

services, see Allan P. Blostin, Robert B. Grant, and William J. Wiatrowski,

“Employee Payments for Health Care Services,” Monthly Labor Review,

November 1992, pp. 17-32.
39

Home health care provides skilled nursing and related

care to patients in their own homes. Home health care benefits are provided to the majority of HMO participants, while

such benefits are available less often to non-HMO participants. Federally qualified HMOs must provide this benefit. When home health care benefits are provided in HMOs,

coverage is often unlimited. The most common type of

restriction placed on home health care is the number of

visits, with 100 visits per year a frequent limit.

Another alternative to hospitalization is hospice care,

which offers nursing care and psychological support to terminally ill patients—usually defined as having 6 months

or less to live—and to their families. Plans often place

ceilings on maximum dollar amounts payable during a hospice stay. Medical care plans cover hospice care less often

than other alternatives to hospitalization.11

Surgical coverage

Medical plans base payments for in-hospital surgery on the

“usual, customary, and reasonable” (UCR) charges for the

specific procedure performed.12 As is true with hospitalization, in-hospital surgical benefits are typically covered

by non-HMOs subject to overall limitations of the plan, with

the major medical coinsurance applying to the UCR charges.

Alternatively, some non-HMO participants have full coverage of surgical benefits. Others are covered for the full

UCR charges or according to a schedule establishing a

maximum amount payable for each procedure. Charges

exceeding the scheduled maximums, however, may be covered subject to the major medical limits of the plan. For the

large majority of HMO enrollees, both inpatient and outpatient surgery are covered in full.

Prompted by rises in costs of medical care during the

1980’s, health care insurers have started encouraging their

enrollees to substitute less expensive outpatient services,

such as outpatient surgery, for inpatient hospital services.

To encourage the use of outpatient surgery, non-HMOs may

provide higher reimbursement rates over those provided for

inpatient surgery.13

Plans with surgical benefits generally require enrollees

to satisfy a deductible for in-hospital procedures. When

outpatient surgery is needed, however, a deductible requirement may be waived.

Outpatient physicians visits and diagnostic services

Health care participants usually have coverage for physicians’ visits and diagnostic x-ray and laboratory tests (DXL).

In fee-for-service plans, expenses for physicians’ office visits and DXL are often covered as a percentage of usual,

customary and reasonable charges and are subject to an

annual deductible and a lifetime maximum benefit.

HMOs typically require copayments for office visits, as

do some PPOs. Copayments for office visits in HMO and

PPO plans are usually minimal, such as $5 and $10 per

visit.

Prescription drug benefits

Virtually all participants in medical plans have coverage

for outpatient prescription drugs; they may be covered under separate provisions of the plan. Inpatient prescription

drugs are covered under hospital miscellaneous services,

generally in the same fashion as room and board charges.

Coverage for outpatient prescription drugs differs by type

of medical plan. Although it is increasingly common to see

copayments per individual prescription in non-HMOs, for

the majority of HMO participants, outpatient prescription

drugs are still covered under major medical limitations. In

HMOs, prescriptions are usually subject to a minimal

copayment, for example $5 or $10 per prescription. It is

rare to have prescription drugs covered in full by HMO or

non HMO plans.

For reasons similar to those behind the expansion in alternatives to hospitalization, medical care plans offer a variety of alternatives to lower both plan and patient costs for

prescription drugs. These alternatives include:

• Encouraging patients to use less expensive generic

drugs instead of brand-name drugs

• Setting up mail order programs for drugs needed on

a routine basis

• Establishing contracts between plans and selected

pharmacies to provide drugs at a lower cost

Plans often have provisions for more generous reimbursement of generic drugs, which cost less than their brand name

equivalents. Participants may receive higher reimbursement for obtaining generic rather than brand name prescription drugs, when generic drugs are available.

Mail order drug programs supply prescription medications needed on a continuous basis. In such arrangements,

participants may receive a higher reimbursement or pay

less than for drugs purchased directly from a pharmacy.

Some participants may receive higher reimbursements

if prescriptions are filled at certain pharmacies with discount policies. The plan providers negotiate the price of

prescriptions with the pharmacies, usually at cost plus minimal dispensing fees. Group HMO plans may have an inhouse pharmacy that charges a minimal copayment for prescriptions. IPA HMO plans, on the other hand, might be

affiliated with “discount” pharmacies, that also provide prescriptions with minimal copayments.14

11 A more detailed discussion on alternatives to hospitalization is found in

Thomas P. Burke, “Alternatives to Hospital Care under Employee Benefit

Plans,” Monthly Labor Review, December 1991, pp. 9-15. 12 The “usual, customary, and reasonable” charge is defined as being not

more than the physician’s usual charge; within the customary range of fees

charged in the locality; and reasonable, based on the medical circumstances. 13 Incentives for outpatient surgery are more fully discussed by Robert B.

Grant in “Outpatient Surgery: Helping to Contain Health Care Costs,” Monthly

Labor Review, November 1992, pp. 33-36.

14 For a more comprehensive discussion on prescription drug coverage,

see Cathy Baker and Natalie Kramer, “Employer-Sponsored Prescription Drug

Benefits,” Monthly Labor Review, February 1991, pp. 31-35.
40

Mental health coverage and substance abuse

treatment

Though available to the majority of participants in medical

plans, mental health coverage, both in- and outpatient, can

be subject to more restrictive limitations than other illnesses.

Plans commonly limit the duration of hospital stays. For

example, 30 or 60 days per year for mental health care are

common, compared to 365 days per confinement or unlimited days for other illnesses. Frequently, plans impose a

separate, lower dollar maximum on covered hospital expenses, such as a lifetime maximum of $50,000 on all mental health benefits.

Even more restrictive is coverage for mental health care

outside the hospital (psychiatric office visits). Outpatient

mental health care is commonly covered for fewer visits

per year than other outpatient services, and it is subject to

maximum dollar limits on annual payments. Plans also

frequently cover such care at a coinsurance rate of 50 percent rather than the usual 80 percent paid by plans for other

illnesses. In addition, expenses for outpatient mental health

care often cannot be used to meet the employee’s maximum

out-of-pocket expense limit. Reimbursement for these expenses thus does not increase to 100 percent even when the

out-of-pocket expense limit is met.15

Alcohol and drug abuse treatment benefits are common

for medical plan participants. Virtually always, alcohol

abuse treatment benefits are the same as benefits for drug

abuse treatment. Benefits provided under substance abuse

care include both detoxification and rehabilitation. Detoxification involves supervised care by medical personnel; such

care is designed to reduce or eliminate the symptoms of

chemical dependency. Rehabilitation provides a variety of

services intended to alter the behavior of substance abusers. Such services are generally provided once a person

completes detoxification.

Virtually all participants covered by alcohol abuse treatment benefits are eligible for hospital inpatient detoxification; coverage for inpatient rehabilitation is less prevalent.

Because detoxification is considered medically necessary,

the majority of medical plans cover such services. Outpatient alcohol abuse treatment, generally rehabilitative care,

is available to most participants with alcoholism coverage.

Coverage patterns are similar for drug abuse treatment benefits.

As is the case with mental health care, plans are more

restrictive in covering substance abuse treatment than other

illnesses.16 Participants are more likely to have inpatient

detoxification treated the same as any other inpatient confinement than to have inpatient rehabilitation or outpatient

care covered the same as any other illness. Limitations for

substance abuse treatment may include:

• Restrictions on the number of days of inpatient hospital care per year

• Restrictions on the number of outpatient visits per

year

• Reduced coinsurance levels for outpatient treatment

• Employee’s share of the cost of outpatient care not

included in out-of-pocket expense limit

• Maximum dollar amounts per year or per lifetime

Inpatient care is usually limited to 30 days per year. Similarly, outpatient care might be restricted to 20 or 30 visits

per year at a coinsurance rate of 50 percent. In non-HMO

plans, payments are often limited to a dollar maximum for

both inpatient and outpatient care with $50,000 per lifetime a common limit. Limitations on days and dollars are

often combined for alcohol and drug abuse care.17 For example, plans often limit coverage to 30 days per year and to

$50,000 per lifetime for both alcohol and drug abuse treatment.

HMOs frequently impose limits on the number of days

of both inpatient and outpatient substance abuse treatment.

In addition, an HMO may require a small copayment for

outpatient visits, such as $20 per visit.

Pre-existing condition limitation

Plans may impose restrictions on care provided to individuals

who join a plan having a “pre-existing condition.” This is a

medical condition that existed prior to coverage by the plan.

Among the possible restrictions imposed are a limit on the

amount the plan will pay for treatment of the condition or a

specified time period after joining the plan during which no

payment will be made for treatment of the condition.

Coverage for retired workers

Although the Consolidated Omnibus Budget Reconciliation Act of 1985 requires employers to continue health care

benefits for employees who are retired, laid off, or otherwise separated from employment, workers may be charged

all of the premium costs at group rates. In addition, the

continuation period stipulated by the law is limited.18 The

15 A detailed examination of mental health care provisions in employerprovided health care plans is provided by Allan P. Blostin in “Mental Health

Benefits Financed By Employers,” Monthly Labor Review, July 1987, pp.

23-27. 16 The designation of substance abuse coverage as more restrictive than

that for other illnesses results from a comparison of types of coverage. For

instance, if a plan limits inpatient substance abuse care to 30 days per year but

the limit on inpatient care of any other illness exceeds 30 days per year, that

plan contains separate, more restrictive, limits.

17 Employer-provided substance abuse treatment coverage is more completely discussed by Marc E. Kronson is “Substance Abuse Coverage Provided by Employer Medical Plans,” Monthly Labor Review, April 1991, pp.

3-10. In addition, see Substance Abuse Provisions in Employee Benefit Plans,

Bulletin 2412 (Bureau of Labor Statistics, August 1992). 18 The act requires employers who maintain health insurance plans to continue coverage to terminated workers for up to 18 months should they want

the coverage. Workers may be charged up to 102 percent of the premium cost.

Based on a 1989 change to this law, employees disabled at the time of termination can have benefits continued for up to 29 months, and can be charged

up to 150 percent of the premium cost after 18 months.
41

survey of small private establishments focuses on coverage

for retired employees that was financed wholly or partly by

the employer.

Full-time medical care participants in small establishments may work for employers who finance, at least in part,

medical care protection after retirement (table 59). These

workers are usually in plans that provide postretirement

coverage regardless of their age. Retirees are typically covered by the same plan as active employees, although benefits are coordinated with medicare once a retiree reaches

age 65. It is more likely for all or part of the cost of coverage to be paid by the retiree than for the employer to finance the benefit.

Dental Care

Dental care benefits may be offered as a part of a comprehensive medical and dental plan, or as a separate plan in

addition to medical coverage.

The majority of participants covered by dental care plans

receive benefits through a fee-for-service plan, which reimburses patients or providers only after services are received. The remaining participants have their dental benefits provided through either a health maintenance

organization or a preferred provider organization.

Dental plans cover preventive and restorative services.

Preventive care includes dental examinations, prophylaxis

(cleaning), and x rays. Restorative procedures include fillings, periodontal care, endodontic care, prosthetics, and

crowns. Periodontal care is the treatment of tissues and bones

supporting the teeth. Endodontics involves the treatment

of the tooth pulp, such as root canal work. Prosthetics deals

with the construction and fitting of bridges and dentures.

Orthodontic care, including straightening and maintaining proper spacing of teeth, is covered less often by dental

plans than are other procedures. In addition, plans may

limit orthodontic coverage to dependent children only.

Plans use one of four methods to cover dental services:

• Pay a percent of dental charges

• Pay up to a specified dollar amount per procedure

• Require patients to pay an initial copayment, after

which the plan pays additional charges

• Pay all of the costs of necessary procedures

Dental payments are commonly based on a proportion

of the usual, customary, and reasonable charge for a procedure. The proportion covered by a plan often depends on

the type of procedure performed. Less costly procedures

such as examinations and x rays may be covered at 100

percent. Fillings, surgery, endodontics, and periodontics

are more likely to be covered at 80 percent. The most expensive procedures—crowns, prosthetics, and orthodontia—

are often covered at 50 percent of the usual, customary, and

reasonable charge.

Some dental plan participants are offered reimbursement

based on a schedule of cash allowances. In this type of

arrangement, each procedure is subject to a specified maximum dollar amount that the plan will pay to the participant

or the dentist.

Other ways for plans to cover dental benefits are less

common. For example, it is not typical for dental plans to

require a copayment per procedure. Payments based on

incentive schedules are also rare. Under such arrangements,

the percent of dental expenses paid by the plan increases

each year if the participant regularly gets examinations by

a dentist.

Frequently, plans specify a deductible amount before any

dental benefits are paid by the plan. Deductibles, such as

$25 and $50 per year, often apply. Very rarely, a plan may

require the participant to pay a one-time deductible (like

$50), rather than a yearly deductible. Deductibles are common for restorative services and less common for preventive services and orthodontia.

Plans frequently limit the amount of payment each year

by specifying an annual maximum benefit, for example,

$1,000 per year. Benefits for orthodontic services are often

subject to a separate lifetime maximum, commonly ranging between $1,000 and $1,500.19

As a cost containment technique, many dental participants may be required to obtain authorization from the plan

before undergoing expensive treatment. Commonly, procedures costing $200 or more are subject to advance authorization.

Vision Care

Vision care coverage, when available, is usually provided

through a fee-for-service plan. Vision benefits may also be

available through an HMO or a PPO, which restrict the

choice of providers available to participants.

For all of the participants, vision benefits cover eyeglasses

and, with a few exceptions, eye examinations. Coverage

for contact lenses is somewhat less extensive. To be included in the survey, vision plans must cover contact lenses

for cosmetic reasons. Plans that provide coverage limited

to medically necessary contact lenses are not included.

Participants with vision care coverage generally have

limits placed on their benefits20. Many plans cover eyeglasses and contact lenses subject to scheduled dollar allowances. Other plans may require an employee copayment

or offer a discount on the purchase of eyeglasses and contact lenses at specified locations. Eye examinations are

commonly subject to either a scheduled allowance or the

participant is required to pay a small copayment per visit.

19 For more details on dental care benefits, see Rita S. Jain, “EmployerSponsored Dental Insurance Eases The Pain,” Monthly Labor Review,

October 1988, pp. 18-23.

20 For more details on vision care benefits, see Rita S. Jain, “EmployerSponsored Vision Care Brought Into Focus,” Monthly Labor Review,

September 1988, pp. 19-23.
42

Table 40. Medical care benefits: Summary of selected

features, full-time employees, small private establishments,

1996

Item

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

medical care1 ...................... 25,599 6,070 8,486 11,043

Percent

Total with medical care ............. 100 100 100 100

Traditional fee-for-service2 ... 36 31 34 41

Preferred provider

organization3 .................. 35 41 36 32

Prepaid health maintenance

organization4 .................. 27 27 28 25

Retiree coverage available5 16 15 16 16

With a service requirement ... 75 67 75 79

1 Plans providing services or payments for services rendered in the

hospital or by a physician. Excludes plans that provided only dental, vision or

prescription drug coverage. 2 The plan pays for specific medical procedures as expenses are

incurred. 3 A preferred provider organization (PPO) is a group of hospitals and

physicians that contracts to provide comprehensive medical services. To

encourage use of organization members, the health care plan limits

reimbursement rates when participants use nonmembers’ services. 4 Includes federally qualified (those meeting standards of the Health

Maintenance Act of 1973, as amended) and other HMO’s delivering

comprehensive health care on a prepayment rather than fee-for-service

basis. 5 Tabulations cover plans in which insurance was continued for longer

than 1 month after retirement. It excludes plans that provide only the retiree’s

share of premiums for medical insurance under Medicare (Part B).
43

Table 41. Medical care benefits: Requirements for employee contributions by type of fee arrangement, full-time employees,

small private establishments, 1996

Contributory status

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

Number (in thousands) with

medical care coverage ...... 25,599 18,755 6,844 6,070 4,406 1,664 8,486 6,079 2,407 11,043 8,269 2,773

Percent

 Single coverage

Total with single coverage for

 medical care ........................... 100 100 100 100 100 100 100 100 100 100 100 100

Employee contributions not

required .......................... 48 50 42 49 55 32 46 47 44 49 49 48

Employee contributions

required .......................... 52 50 58 51 45 68 54 53 56 51 51 52

Not determinable .................. 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 () - - - - 1 ( ) 1 ( ) 1 ( )

 Family coverage

Total with family coverage for

 medical care ........................... 100 100 100 100 100 100 100 100 100 100 100 100

Employee contributions not

required .......................... 24 24 25 21 23 18 20 19 22 29 28 31

Employee contributions

required .......................... 75 76 74 78 77 82 80 81 78 70 71 66

Not determinable .................. 1 1 () 1 1 ( ) 1 () 1 - - - 1 1 3

1 Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may not equal

totals. Where applicable, dash indicates no employees in this category.
44

Table 42. Medical care benefits: Amount and type of employee contribution for individual coverage, 1 by fee arrangement,

full-time employees, small private establishments, 1996

Type and amount of

contribution

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

Number (in thousands) with

contributory coverage ......... 13,336 9,395 3,940 3,117 1,979 1,138 4,561 3,208 1,353 5,658 4,209 1,449

Percent

Total with contributory coverage 100 100 100 100 100 100 100 100 100 100 100 100

Flat monthly amount ............. 80 78 86 83 82 84 77 74 83 81 78 91

Less than $5.00 ................ 2153252 2 () 6 1 1 3

$5.00 - 9.99 ...................... 325332224318

$10.00 - 14.99 .................. 5 4 6 7 5 10 3 3 4 5 4 6

$15.00 - 19.99 .................. 555436564555

$20.00 - 29.99 .................. 15 16 12 14 18 8 16 18 13 15 15 15

$30.00 - 39.99 .................. 12 12 13 12 12 12 11 10 12 14 14 14

$40.00 - 49.99 .................. 12 11 14 13 13 13 10 9 12 12 11 18

$50.00 - 59.99 .................. 8 8 6 8 8 7 9 10 8 7 7 5

$60.00 - 69.99 .................. 775896676674

$70.00 - 79.99 .................. 538427437549

$80.00 - 89.99 .................. 2142152 2 () 5 2 1 3

$90.00 - 99.99 .................. 23134212 2 () 2 3 1

$100.00 - 124.99 .............. 22111122134 2 ( )

$125.00 or greater ............ 1 1 1 2 ( ) 2 () 1 1 1 1 1 1 1

Dollar amount unspecified 1 1 2 () 1 2 2 () 1 1 2 ( ) 2 () 1 -

Composite rate3 .................... 5 6 2 1 2- 6 8 1 5 6 4

Varies4 .................................. 6 6 5 8 7 10 6 5 6 5 7 1

Other ..................................... 2 ( ) 2 () - 1 1 - 2 ( ) 2 () - 2 ( ) 2 () -

Flexible benefits5 .................. 565665777452

Percent of earnings .............. 2 () - 2 () - - - 2 () - 2 () - - -

Contribution type unknown ... 442231453453

Average6

Average flat monthly

contribution in dollars .......... $43 $43 $41 $41 $40 $42 $42 $43 $42 $44 $45 $41

1 Plans providing services or payments for services rendered in the

hospital or by a physician. Excludes plans that provided only dental, vision

or prescription drug coverage. 2 Less than 0.5 percent. 3 A composite rate is a set contribution covering more than one benefit

area, for example, health care and sickness and accident insurance. Cost

data for individual plans cannot be determined. 4 Based on worker attributes. For example, employee contributions

may vary based on earnings, length of service, or age. 5 Amount varies by options selected under a "cafeteria plan" or

employer-sponsored reimbursement account. 6 The average is presented for all covered workers and excludes

workers without the plan provision.

 NOTE: Because of rounding, sums of individual items may not equal

totals. Dashes indicate no employees in this category.
45

Table 43. Medical care benefits: Amount and type of employee contribution for family coverage,1 by type of fee arrangement,

full-time employees, small private establishments, 1996

Type and amount of

contribution

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

All

plans

NonHMO

plans

HMO

plans

Number (in thousands) with

contributory coverage ......... 19,260 14,194 5,065 4,761 3,404 1,356 6,798 4,915 1,882 7,701 5,875 1,827

Percent

Total with contributory coverage 100 100 100 100 100 100 100 100 100 100 100 100

Flat monthly amount ............. 84 83 88 86 85 87 83 82 86 85 83 92

Less than $20.00 .............. 214215215222

$20.00 - 29.99 .................. 223112222325

$30.00 - 39.99 .................. 1 1 2 ( ) 2 ( ) 2 () 1 1 1 2 ( ) 2 () 1 -

$40.00 - 49.99 .................. 222221222222

$50.00 - 59.99 .................. 222221221324

$60.00 - 69.99 .................. 332342223332

$70.00 - 79.99 .................. 334214434445

$80.00 - 89.99 .................. 335324435336

$90.00 - 99.99 .................. 23122 2 () 2 2 1 4 4 2

$100.00 - 124.99 .............. 9 10 8 10 11 7 9 9 9 10 11 8

$125.00 - 149.99 .............. 7 6 9 8 7 12 7 6 8 7 6 8

$150.00 - 174.99 .............. 667554658769

$175.00 - 199.99 .............. 8 9 3 7 8 3 8 10 3 8 9 4

$200.00 - 224.99 .............. 8 8 10 8 6 12 9 9 8 8 7 11

$225.00 - 249.99 .............. 564794563546

$250.00 - 274.99 .............. 435658335333

$275.00 - 299.99 .............. 554895444332

$300.00 or greater ............ 11 10 13 10 10 12 11 10 16 11 11 11

Composite rate3 .................... 3 4 1 1 1- 4 5 1 4 4 3

Varies4 .................................. 675878666682

Other ..................................... 2 () 1 - 1 2 - 2 ( ) 2 () - 2 ( ) 2 () -

Flexible benefits5 .................. 334434445232

Percent of earnings .............. 2 () - 2 () - - - 2 () - 2 () - - -

Contribution type unknown ... 222111332232

Average6

Average flat monthly

contribution in dollars .......... $182 $181 $182 $190 $192 $183 $181 $181 $183 $177 $175 $182

1 Plans providing services or payments for services rendered in the

hospital or by a physician. Excludes plans that provided only dental, vision

or prescription drug coverage. If the amount of contribution varied by either

size or composition of family, the rate for an employee with a spouse and

one child was used. For a small percentage of employees, the employee

contributes the same amount for single and family coverage. 2 Less than 0.5 percent. 3 A composite rate is a set contribution covering more than one benefit

area, for example, health care and sickness and accident insurance. Cost

data for individual plans cannot be determined.

4 Based on worker attributes. For example, employee contributions

may vary based on earnings, length of service, or age. 5 Amount varies by options selected under a "cafeteria plan" or

employer-sponsored reimbursement account. 6 The average is presented for all covered workers and excludes

workers without the plan provision.

 NOTE: Because of rounding, sums of individual items may not equal

totals. Dash indicates no employees in this category.
46

Table 44. Medical care benefits:1 Fee arrangement and

financial intermediary, full-time employees, small private

establishments, 1996

Fee arrangement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

medical care ....................... 25,599 6,070 8,486 11,043

Percent

Total with medical care ............. 100 100 100 100

Traditional fee-for-service2 ... 36 31 34 41

Self insured3 ..................... 12 9 11 15

With administrative

services only

contract4 ................. 6 6 7 6

Without administrative

services only

contract ................... 3 1 2 5

Not determinable .......... 3 2 2 4

Commercial insurance

company ..................... 12 11 12 14

Blue Cross/Blue Shield ..... 11 10 11 11

Independent organization5 6 ( ) 6 ( ) 6 ( ) 6 ( )

Combined financing7 ........ 6 () 1 6 ( ) 6 ( )

Preferred provider

organization8 .................. 35 41 36 32

Self insured3 ..................... 11 15 10 8

With administrative

services only

contract4 ................. 6 9 6 4

Without administrative

services only

contract ................... 3 3 2 3

Not determinable .......... 2 3 2 2

Commercial insurance

company ..................... 15 14 16 14

Blue Cross/Blue Shield ..... 7 8 6 7

See footnotes at end of table.

Table 44. Medical care benefits:1 Fee arrangement and

financial intermediary, full-time employees, small private

establishments, 1996 — Continued

Fee arrangement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Percent

Total with medical care

Preferred provider

organization8

Independent organization5 3433

Combined financing7 ........ 6 ( ) 6 ( ) 6 ( ) 6 ( )

Health maintenance

organization9 .................. 27 27 28 25

Commercial insurance

company ..................... 4 5 4 4

Blue Cross/Blue Shield ..... 3 3 4 3

Independent organization5 19 19 20 19

Other10 .................................. 2 1 1 2

1 Plans providing services or payments for services rendered in the

hospital or by a physician. Excludes plans that provided only dental, vision,

or prescription drug coverage. 2 These plans pay for specific medical procedures as expenses are

incurred. 3 Includes plans that are financed on a pay-as-you-go basis, plans

financed through contributions to a trust fund established to pay benefits, and

plans operating their own facilities if at least partially financed by employer

contributions. Includes plans that are administered by a commercial carrier

through Administrative Services Only (ASO) contracts. 4 An arrangement where an establishment pays the cost of benefits, but

hires another establishment to handle administrative services. 5 These organizations provide and finance all benefits, but are not

affiliated with an insurance company or Blue Cross/Blue Shield. 6 Less than 0.5 percent. 7 These are plans where the financing comes from two different kinds of

financial intermediaries. For example, an establishment contracts with Blue

Cross/Blue Shield to pay part of the benefits and a commercial company to

pay the other benefits. 8 A preferred provider organization (PPO) is a group of hospitals and

physicians that contracts to provide comprehensive medical services. To

encourage use of organization members, the health care plan limits

reimbursement rates when participants use nonmember services. 9 Includes federally qualified (those meeting standards of the Health

Maintenance Organization Act of 1973, as amended) and other HMO’s

delivering comprehensive health care on a prepayment rather than

fee-for-service basis. 10 Includes exclusive provider organizations, which are groups of hospitals

and physicians that contract to provide comprehensive medical services. 

Participants are required to obtain services from members of the organization

in order to receive plan benefits.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
47

Table 45. Non-health maintenance organizations: Amount of individual deductible,1 full-time employees, small private

establishments, 1996

Deductible2

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

nonHMO

plans3

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans3

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans3

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans3

Feeforservice

plans

Preferred

provider

organizations

Number (in thousands) in

non-HMO plans .................. 18,756 9,287 9,070 4,406 1,870 2,479 6,079 2,914 3,044 8,271 4,504 3,547

Percent

Total in non-HMO plans ............ 100 100 100 100 100 100 100 100 100 100 100 100

Deductible specified ............. 79 94 67 79 96 68 78 95 63 81 92 69

Deductible on an annual

basis4 .......................... 79 94 67 79 96 68 78 95 62 80 92 69

Based on earnings5 ...... 1 1 6 () 1 1 1 1 2 1 6 ( ) 6 () -

Flat dollar amount ......... 79 93 66 79 95 67 76 93 62 80 91 69

Less than $100 ......... 1 1 6 () 1 3 - 1 2 6 () 1 6 () 1

$100 .......................... 9 11 7 7 7 8 7 9 6 11 14 7

$101 - $149 .............. 6 ( ) 6 () - - - - 6 ( ) 6 () - - - -

$150 .......................... 222241222222

$200 .......................... 19 25 14 17 24 12 21 28 14 20 24 15

$201 - $249 .............. 6 () 1 6 ( ) 6 ( ) 6 ( ) 6 ( ) 6 () 1 6 ( ) 6 () 1 -

$250 .......................... 18 20 16 19 23 16 19 22 16 17 17 17

$300 .......................... 10 9 11 12 9 15 10 9 10 9 9 10

Over $300 ................. 19 24 15 19 25 16 17 20 14 21 25 16

Other ................................. 6 ( ) 6 ( ) 6 ( ) 6 () - 6 ( ) 6 () - 6 ( ) 6 ( ) 6 () -

No deductible ........................ 17 4 29 18 2 28 20 3 34 15 5 26

Not determinable .................. 324324324435

Average7

Average annual deductible ....... $306 $306 $308 $318 $337 $300 $298 $293 $309 $304 $300 $312

1 The deductible is the amount of covered expenses that an individual

must pay before any charges are paid by the medical care plan. 

Deductibles that apply separately to a specific category of expense, such as

a deductible for each hospital admission, were excluded from this

tabulation. 2 Amount of deductible described is for each insured person. However,

many plans contain a maximum family deductible. In some plans, the

individual and the family deductibles are identical. If the deductible applied

only to dependents’ coverage, it was not tabulated. 3 These plans include fee-for-service, preferred provider organizations,

and exclusive provider organizations.

4 Deductibles are calculated on an annual basis, with the enrollee

responsible for satisfying a new deductible requirement each plan year. 5 These plans have deductibles that vary by the amount of the

participant’s earnings. A typical provision is 1 percent of annual earnings

with a maximum deductible of $150. 6 Less than 0.5 percent. 7 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals.

 Where applicable, dash indicates no employees in this category.
48

Table 46. Non-health maintenance organizations: Relationship of individual and family deductibles,1 full-time employees, small

private establishments, 1996

Relationship of individual and

family deductibles

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

nonHMO

plans2

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans2

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans2

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans2

Feeforservice

plans

Preferred

provider

organizations

Number (in thousands) in

non-HMO plans .................. 18,756 9,287 9,070 4,406 1,870 2,479 6,079 2,914 3,044 8,271 4,504 3,547

Percent

Total with non-HMO plans ........ 100 100 100 100 100 100 100 100 100 100 100 100

Individual and family

deductibles specified ...... 69 79 60 64 75 58 67 79 57 72 80 65

Family deductible is

multiple of individual

deductible3 .................. 59 67 52 54 57 52 57 65 50 63 73 53

1 times .......................... 22111124 4 () 1 1 1

1.1 to 1.9 times ............. 1 2 - 4 () 1 - 1 2 - 1 2 -

2 times .......................... 27 34 21 25 33 20 26 34 20 29 34 23

2.1 to 2.4 times ............. 1 1 - 4 () 1 - 4 ( ) 4 () - 1 2 -

2.5 times ....................... 231111111351

2.6 to 2.9 times ............. 4 () - 4 () - - - - - - 4 () - 4 ( )

3 times .......................... 26 25 28 25 20 29 26 23 29 27 27 27

Greater than 3 times ..... 4 ( ) 4 ( ) 4 ( ) 4 () - 4 ( ) 4 ( ) 4 () - 4 ( ) 4 () -

Specified number of

individual deductibles

must be met to satisfy

family deductible5 ....... 10 12 9 11 18 6 10 14 7 9 8 12

Less than 3 individual

deductibles ............. 34212136 4 () 4 3 4

3 individual deductibles 7 8 7 10 17 5 786648

No individual and/or family

deductible ....................... 28 19 36 33 23 39 30 19 39 24 17 30

Not determinable .................. 324324324435

1 Deductibles are calculated on an annual basis with the enrollee

responsible for satisfying a new deductible requirement each plan year. 2 These plans include fee-for-service, preferred provider organizations,

and exclusive provider organizations. 3 For example, the individual deductible requirement is $100 while the

family deductible requirement is $300.

4 Less than 0.5 percent. 5 For example, the individual requirement is $100 and three individual

deductibles must be met to satisfy the family requirement.

NOTE: Because of rounding, sums of individual items may not equal totals.

 Where applicable, dash indicates no employees in this category.
49

Table 47. Non-health maintenance organizations: Coinsurance rates, full-time employees, small private establishments, 1996

Coinsurance

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

Number (in thousands) in

non-HMO plans .................. 18,756 9,287 9,070 4,406 1,870 2,479 6,079 2,914 3,044 8,271 4,504 3,547

Percent

Total with non-HMO plans ........ 100 100 100 100 100 100 100 100 100 100 100 100

With coinsurance2 ................ 85 94 78 83 92 78 83 93 74 88 96 81

Coinsurance rate3

80 percent ..................... 58 77 39 58 80 42 57 79 37 58 75 38

85 percent ..................... 223214212333

90 percent ..................... 17 5 30 16 1 27 17 5 30 17 6 33

Other percent ................ 7 10 4 6 9 5 5 7 3 9 12 5

Varies4 .......................... 5 ( ) 5 ( ) 5 ( ) 5 () - 5 () 1 5 () 1 5 ( ) 5 () -

Other ................................. 5 ( ) 5 ( ) 5 () 1 2 5 () - - - 5 () - 1

Without coinsurance6 ........... 15 5 22 16 7 22 17 7 26 12 4 19

Not determinable .................. 5 ( ) 5 () - 5 ( ) 5 () - - - - 5 ( ) 5 () -

1 These plans include fee-for-service, preferred provider organizations,

and exclusive provider organizations. 2 Represents the initial coinsurance in plans that have 100 percent

coverage after the individual pays a specified dollar amount toward

expenses. For example, the plan pays 80 percent until the individual’s

out-of-pocket expenses reach $1,000, and then coverage is at 100 percent. 3 A few plans have more than one coinsurance rate. In those cases,

the coinsurance rate shown is that which applies to the majority of benefits

under the plan.

4 The overall coinsurance rate varies by specified dollar amount of

expenses. For example, 80 percent coverage up to $5,000 and 90 percent

thereafter. 5 Less than 0.5 percent. 6 Includes plans with overall benefit limitations, such as maximum dollar

amounts and deductibles, where the coinsurance rate is 100 percent.

NOTE: Because of rounding, sums of individual items may not equal totals.

 Where applicable, dash indicates no employees in this category.
50

Table 48. Non-health maintenance organizations: Maximum out-of-pocket expense provisions, full-time employees, small

private establishments, 1996

Item

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

Number (in thousands) with

non-HMO plans .................. 18,756 9,287 9,070 4,406 1,870 2,479 6,079 2,914 3,044 8,271 4,504 3,547

Percent

Total with non-HMO plans ........ 100 100 100 100 100 100 100 100 100 100 100 100

With limit on out-of-pocket

expense .......................... 78 83 74 78 87 72 75 82 69 79 82 78

With an annual dollar

maximum on

out-of-pocket

expense2 .................... 75 80 70 76 86 69 73 79 67 76 78 75

Per individual:

$1 - $299 .................. 222111222231

$300 .......................... 1 1 3 () 1 2 - 1 1 3 () 1 1 1

$301 - $399 .............. 3 ( ) 3 ( ) 3 ( ) 3 () - 1 3 () - 3 ( ) 3 ( ) 3 ( ) 3 ( )

$400 .......................... 222221221222

$401 - $499 .............. 3 () - 3 ( ) 3 () - 3 ( ) 3 () - 1 3 () - 3 ( )

$500 .......................... 564564574564

$501 - $749 .............. 23222113 3 () 3 3 4

$750 - $999 .............. 564342574666

$1,000 ....................... 22 21 22 23 20 26 19 20 18 22 23 23

$1,001 - $1,499 ........ 444565445333

$1,500 - $1,999 ........ 10 13 8 10 15 7 10 13 8 10 11 9

$2,000 ....................... 10 9 10 9 10 9 10 11 9 10 8 11

$2,000 or greater ...... 12 12 13 15 18 12 12 9 15 11 12 11

Per family:

$1 - $499 .................. 3 ( ) 3 () 1 1 3 () 1 3 () - 1 3 () 1 3 ( )

$500 - $749 .............. 12111112 3 () 2 2 1

$750 - $999 .............. 12111134211 3 ( )

$1,000 ....................... 231231241222

$1,001 - $1,249 ........ 112111111213

$1,250 - $1,499 ........ 1 1 3 ( ) 3 ( ) 3 ( ) 3 ( ) 3 ( ) 3 ( ) 3 () 1 2 3 ( )

$1,500 ....................... 222111222221

$1,501 - $1,999 ........ 23123123 3 () 2 2 1

$2,000 ....................... 6 5 8 5 3 7 6 7 5 7 4 11

$2,001 - $2,999 ........ 453463453332

$3,000 ....................... 11 10 12 11 11 11 8 6 10 13 13 13

$3,001 or greater ...... 16 18 15 17 22 13 19 17 20 14 16 12

No family maximum .. 15 17 13 17 21 14 13 15 11 15 17 14

Family maximum

cannot be

computed4 .......... 12 11 12 13 13 13 11 11 11 11 10 12

Annual maximum on

out-of-pocket expense

based on earnings ...... 1111 3 () 1 1 2 1 3 ( ) 3 () 1

Annual maximum on

out-of-pocket expense

varies by coinsurance

rate5 ............................ 2122 3 () 2 1 1 1 3 2 3

Other ................................. 3 () 1 - 3 ( ) 3 () - 3 () 1 - 1 1 -

See footnotes at end of table.
51

Table 48. Non-health maintenance organizations: Maximum out-of-pocket expense provisions, full-time employees, small

private establishments, 1996 — Continued

Item

All employees Professional, technical,

and related employees

Clerical and sales

employees

Blue-collar and service

employees

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

All

nonHMO

plans1

Feeforservice

plans

Preferred

provider

organizations

Percent

Total with non-HMO plans

No out-of-pocket expense

required6 ......................... 6 1 11 5 3 ( ) 8 10 3 ( ) 17 5 1 7

No limit on out-of-pocket

expense .......................... 8 7 9 8 3 11 8 10 7 8 7 8

Not determinable .................. 8 10 7 9 10 8 7 8 7 8 10 6

Average7

Average annual dollar

maximum on individual

out-of-pocket expense ........ $1,529 $1,509 $1,553 $1,657 $1,743 $1,576 $1,560 $1,495 $1,640 $1,438 $1,411 $1,471

Average annual dollar

maximum on family

out-of-pocket expense ........ 3,197 3,058 3,301 3,456 3,301 3,572 3,351 2,973 3,729 2,956 3,010 2,796

1 These plans include fee-for-service, preferred provider organizations,

and exclusive provider organizations. 2 Deductible amounts were excluded from computation of the

out-of-pocket dollar limits. With rare exceptions, an out-of-pocket limit was

specified on an annual basis. Few workers were in plans where the

expense limit applied to a disability or a period other than a year. Charges

for certain services, such as mental health care, may not be counted toward

the out-of-pocket maximum. 3 Less than 0.5 percent. 4 These are plans where a family maximum is stated in such a way that

it cannot be computed. For example, the individual out-of-pocket expense

is limited to $1,000 per year and the family out-of-pocket expense is limited

to three individuals. The family out-of-pocket expense cannot be computed

because each of the three individuals must separately reach an

out-of-pocket limit of $1,000. Thus, if two individuals each reach $1,000 in

their out-of-pocket expenses, and two other family members reach $900

and $800 respectively in out-of-pocket expenses, the family out-of-pocket

limit would not have been met. A family dollar maximum cannot be

computed in this example. 5 Some plans reimburse medical expenses at more than one

coinsurance rate. They impose a limit on out-of-pocket expenses by

specifying a maximum on covered medical expenses beyond which all

expenses are paid at 100 percent. 6 All covered expenses are paid at 100 percent. 7 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals.

 Where applicable, dash indicates no employees in this category.
52

Table 49. Non-health maintenance organizations: Maximum benefit

provisions, full-time employees, small private establishments, 1996

Maximum1 All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

non-HMO plans .................. 18,756 4,406 6,079 8,271

Percent

Total with non-HMO plans ........ 100 100 100 100

With maximum limits ............. 65 69 59 68

Lifetime maximum only ..... 64 69 58 66

Less than $250,000 ...... 1 2 1 1

$250,000 ....................... 2 2 () 1 5

$250,001 - $499,999 .... 2 ( ) 2 ( ) 2 ( ) 2 ( )

$500,000 ....................... 3 3 1 4

$500,001 - $999,999 .... 1 2 () 1 1

$1,000,000 .................... 40 43 37 40

More than $1,000,000 .. 18 21 18 15

Annual or disability

maximum only ............ 2 ( ) 2 ( ) 2 ( ) 2 ( )

Both lifetime and annual or

disability maximums ... 1 2 () 1 1

Other maximum ................ 2 () - 2 ( ) 2 ( )

Without maximum limits ........ 27 25 33 24

Not determinable .................. 8 6 7 8

Average3

Average lifetime maximum ....... $1,369,559 $1,551,992 $1,422,949 $1,235,432

1 Maximum described is for each insured person. Where the maximum differed for

employees and dependents, the employee maximum was tabulated. 2 Less than 0.5 percent. 3 The average is presented for all covered workers; averages exclude workers without the

plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates no employees in this category.
53

Table 50. Medical care benefits: Averages for major medical provisions,

full-time employees, small private establishments, 1996

Average1 All

employees

Professional,

technical,

and

related

employees

Clerical

and sales

employees

Bluecollar and

service

employees

Annual deductible2

Individual .............................. $306 $318 $298 $304

Family ................................... 744 782 717 746

Annual out-of-pocket expense

maximum3

Individual .............................. 1,529 1,657 1,560 1,438

Family ................................... 3,197 3,456 3,351 2,956

Lifetime maximum4 ................... 1,369,559 1,551,992 1,422,949 1,235,432

1 The average is presented for all covered workers; averages exclude workers without the

plan provision. 2 The deductible is the amount of covered expenses that an individual or family must pay

before any charges are paid by the medical care plan. Deductibles that apply separately to a

specific category of expense, such as a deductible for each hospital admission, were excluded

from this tabulation. 3 The out-of-pocket expense maximum is the amount an individual or family must pay

before the plan will pay 100 percent of additional charges. Deductible amounts were excluded

from computation of the out-of-pocket dollar limits. Usually, out-of-pocket limits were specified

on an annual basis. Charges for certain services, such as mental health care, may not be

counted toward the out-of-pocket maximum. 4 The maximum is the total amount of expenses that the plan will pay. Maximum

described is for each insured person. Where the maximum differed for employees and

dependents, the employee maximum was tabulated.
54

Table 51. Non-health maintenance organizations: Extent of

coverage for surgical services, full-time employees, small

private establishments, 1996

Type of surgery and extent of

coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) in

non-HMO plans with

inpatient surgery ................. 18,756 4,406 6,079 8,271

Number (in thousands) in

non-HMO plans with

outpatient surgery ............... 18,706 4,406 6,054 8,246

Percent

Inpatient surgery

Total in non-HMO plans with

inpatient surgery ............. 100 100 100 100

Covered in full ................... 11 10 13 10

Subject to limits other than

major medical ............. 6 4 3 9

Dollar limit ..................... 3 1 1 6

Separate coinsurance ... 1 ( ) 1 () 1 -

Separate deductible ...... 2 2 2 2

Other limit ..................... 1 ( ) 1 ( ) 1 ( ) 1 ( )

Limits not determinable 1 ( ) 1 ( ) 1 () 1

Major medical limits only2 84 86 84 82

Outpatient surgery3

Total in non-HMO plans with

outpatient surgery ........... 100 100 100 100

Covered in full ................... 10 10 14 7

Subject to limits other than

major medical ............. 11 7 7 16

Dollar limit ..................... 3 1 1 5

Separate coinsurance ... 1 1 1 1

Separate deductible ...... 6 4 4 8

Other limit ..................... 1 1 ( ) 1 () 2

Limits not determinable 1 - 1 () 2

Major medical limits only2 79 84 80 76

1 Less than 0.5 percent. 2 Major medical limits are expressed only in terms of total benefits

payable under the plan, rather than for individual categories of care. Limits

are set as deductibles, coinsurance percentages, and overall dollar limits on

plan benefits. 3 Charges incurred in the outpatient department of a hospital and outside

of the hospital.

NOTE: Sum of individual items may be greater than the total because some

participants were in plans with more than one type of limit. Where applicable,

dash indicates no employees in this category.

Table 52. Health maintenance organizations: Summary of

selected features, full-time employees, small private

establishments, 1996

Feature

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) in HMO

plans ................................... 6,843 1,664 2,407 2,772

Percent

Total in HMO plans ................... 100 100 100 100

Model type:

Group/staff1 ...................... 16 15 14 18

Individual practice

association2 ................ 60 64 60 57

Mixed model ..................... 16 15 15 18

Not determinable .............. 8 6 10 8

Point of service feature3 ....... 13 16 18 7

Federally qualified ................ 59 55 62 59

Limit on copayments4 ........... 26 19 26 30

Preventive dental care5 ........ 10 10 7 11

Vision screening or

examinations .................. 74 69 76 76

1 Care is provided at centralized locations. 2 Care is provided by doctors working out of their offices. 3 Enrollees may obtain care from non-HMO providers, with limited

reimbursement. 4 In these plans, HMO’s limit the dollar amount the individual pays after

which coverage is in full. For example, there is a copayment limit of $1,000

after which the HMO covers all services at 100 percent. 5 Includes dental examinations and/or x-rays only.

NOTE: Where applicable, dash indicates no employees in this category.
55

Table 53. Health maintenance organizations: Coverage for

selected categories of care, by type of limitation, full-time

employees, small private establishments, 1996

Category of care and extent of

coverage

All 

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar 

and

service

employees

Percent

Hospital room and board

Total with coverage .................. 100 100 100 100

Covered in full ....................... 70 68 68 73

Subject to limits1 ................... 30 32 32 27

Inpatient surgery

Total with coverage .................. 100 100 100 100

Covered in full ....................... 88 90 88 86

Subject to limits1 ................... 11 5 12 13

Not determinable .................. 2 5 1 1

Outpatient surgery2

Total with coverage .................. 100 100 100 100

Covered in full ....................... 75 79 72 75

Subject to limits1 ................... 23 16 28 25

Not determinable .................. 2 5 1 1

Office physician visits

Total with coverage .................. 100 100 100 100

Covered in full ....................... 8 7 9 7

Subject to limits1 ................... 92 93 91 93

Not determinable .................. 3 ( ) - 3 ( ) 3 ( )

1 Limits may be set in terms of dollar or day ceilings on benefits, a

requirement that the participant pay a percentage of costs (coinsurance), or a

requirement that the participant pay a specific amount (deductible or

copayment) before reimbursement begins or services are rendered. 2 Charges incurred in the outpatient department of a hospital and outside

of the hospital. 3 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 54. Health maintenance organizations: Extent of

coverage for physicians’ office visits, full-time employees,

small private establishments, 1996

Item

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) in HMO

plans with physicians’ office

visits coverage .................... 6,833 1,662 2,403 2,769

Percent

Total in HMO plans with

physicians’ office visits

coverage ............................. 100 100 100 100

Covered in full ....................... 8 7 9 7

Subject to a copayment ........ 85 88 83 86

$1 per visit ........................ 1 ( ) - 1 ( ) 1 ( )

$2 per visit ........................ 3 2 2 4

$3 per visit ........................ 1 ( ) 1 ( ) 1 ( ) 1 ( )

$4 per visit ........................ 1 ( ) - 1 ( ) -

$5 per visit ........................ 22 19 22 24

$6 - 9 per visit .................. 2 1 2 3

$10 per visit ...................... 38 46 36 35

More than $10 per visit ..... 15 15 15 15

Unspecified copayment .... 5 5 6 4

Subject to other limits only .... 2 1 2 1

Not determinable .................. 5 3 6 6

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
56

Table 55. Outpatient prescription drug benefits: Summary of

coverage, full-time employees, small private establishments,

1996

Provision

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales 

employees

Bluecollar

 and 

service

employees

Number of employees (in

thousands) with outpatient

prescription drug coverage 22,522 5,320 7,444 9,758

Percent

Total with outpatient

prescription drug

coverage ....................... 100 100 100 100

Coverage for brand name drugs 96 98 95 97

Higher reimbursement for

generic drugs ...................... 34 39 34 32

Coverage for mail order drugs1 23 24 21 23

Higher reimbursement for

prescriptions filled at

selected pharmacies ........... 18 17 21 17

1 Programs that provide drugs for maintenance purposes, that is, drugs

required on a continuous basis.

NOTE: Sum of individual items may be greater than the total because some

participants were in plans with more than one type of coverage. Where

applicable, dash indicates no employees in this category.

Table 56. Outpatient prescription drug benefits: Brand name

drug provisions in non-health maintenance organizations,

full-time employees, small private establishments, 1996

Type of coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number of employees (in

thousands) in non-HMO

plans with outpatient brand

name drug coverage ........... 15,604 3,658 4,973 6,973

Percent

Total in non-HMO plans

with outpatient brand

name drug coverage ..... 100 100 100 100

Covered in full ........................... 1 () 1 1 1 ( )

Subject to the major medical

limits of plan ........................ 60 63 53 63

Subject to copayment per

prescription ......................... 40 46 45 34

Less than $5.00 .................... 3 4 3 2

$5.00 ..................................... 8 9 12 5

$5.01-$6.99 .......................... 1 1 () 1 1

$7.00 ..................................... 2 2 2 3

$7.01-$9.99 .......................... 3 2 5 2

$10.00 ................................... 15 17 16 13

Greater than $10.00 ............. 8 10 6 8

Unspecified copayment ........ 1 1 1 1 ( )

Subject to a separate yearly

deductible ........................... 4 2 5 5

Subject to a separate

coinsurance rate ................. 7 6 6 9

Subject to a separate yearly

maximum ............................ 1 2 2 1

Difference in cost between

generic and brand name

drugs2 ................................. 2 2 3 2

Other ......................................... 1 1 () 1 2

Not determinable ...................... 3 3 2 4

1 Less than 0.5 percent. 2 These are plans where the individual participant is required to use a

generic equivalent when available; if a generic equivalent is not chosen, the

individual must pay the difference in total cost between the brand name and

generic drug plus the cost to the individual. For example, if an individual is

subject to a $5 copayment for generic drugs and the brand name equivalent

is purchased, the individual must pay the difference in total cost between the

brand name and generic drug, plus the $5 copayment.

NOTE: Sum of individual items may be greater than the total because some

participants were in plans with more than one type of coverage. Where

applicable, dash indicates no employees in this category.
57

Table 57. Outpatient prescription drug benefits: Brand name

drug provisions in health maintenance organization plans,

full-time employees, small private establishments, 1996

Type of coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number of employees (in

thousands) in HMO plans

with outpatient brand name

drug coverage ..................... 5,926 1,526 2,047 2,353

Percent

Total in HMO plans with

outpatient brand name

drug coverage ............... 100 100 100 100

Covered in full ........................... 4 5 5 2

Subject to copayment per

prescription ......................... 78 77 75 82

Less than $5.00 .................... 7 6 7 7

$5.00 ..................................... 20 17 22 20

$5.01-$6.99 .......................... 1 1 1 2

$7.00 ..................................... 7 2 6 10

$7.01-$9.99 .......................... 5 8 3 6

$10.00 ................................... 23 30 24 18

Greater than $10.00 ............. 9 7 6 13

Unspecified copayment ........ 6 6 7 5

Subject to a separate yearly

deductible ........................... 7 8 7 8

Subject to a separate yearly

maximum ............................ 3 3 3 3

Difference in cost between

generic and brand name

drugs1 ................................. 5 7 5 3

Other ......................................... 6 7 7 3

Not determinable ...................... 7 4 6 9

1 These are plans where the individual participant is required to use a

generic equivalent when available; if a generic equivalent is not chosen, the

individual must pay the difference in total cost between the brand name and

generic drug plus the cost to the individual. For example, if an individual is

subject to a $5 copayment for generic drugs and the brand name equivalent

is purchased, the individual must pay the difference in total cost between the

brand name and generic drug, plus the $5 copayment.

NOTE: Sum of individual items may be greater than the total because some

participants were in plans with more than one type of coverage. Where

applicable, dash indicates no employees in this category.

Table 58. Medical care plans: Eligibility requirements,

full-time employees, small private establishments, 1996

Eligibility requirement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

medical care ....................... 25,599 6,070 8,486 11,043

Percent

Total .......................................... 100 100 100 100

With a service requirement ... 75 67 75 79

1 month ............................. 15 18 15 13

2 months ........................... 4 3 5 5

3 months ........................... 19 17 21 18

4 -5 months ....................... 1 1 1 () 1

6 months ........................... 3 2 3 4

7 - 11 months .................... 11 11 12 9

12 months ......................... 2 2 1 3

Greater than 12 months .... 20 14 17 26

Without a service

requirement .................... 21 30 21 17

Not determinable2 ................. 4 3 4 4

1 Less than 0.5 percent. 2 Plans providing services or payments for services rendered in the

hospital or by a physician. Excludes plans that provided only dental, vision,

or prescription drug coverage.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
58

Table 59. Medical care benefits: Effect of retirement on

coverage1 and source of plan funding, full-time employees,

small private establishments, 1996

Retiree coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

medical care ....................... 25,599 6,070 8,486 11,043

Percent

Total with medical care ............. 100 100 100 100

Under Age 65

With retiree coverage ........... 16 15 16 16

Employer paid ................... 3 4 4 3

Employee paid .................. 6 6 5 6

Both employee and

employer paid ............. 5 4 6 5

Payment available, but

unkown ....................... 1 2 1 2

Without retiree coverage ...... 76 79 76 75

Not determinable .................. 8 5 8 9

Age 65 and over

With retiree coverage ........... 15 14 15 15

Employer paid ................... 3 3 4 3

Employee paid .................. 6 5 5 6

Both employee and

employer paid ............. 5 4 5 5

Payment available, but

unkown ....................... 1 1 1 2

Without retiree coverage ...... 77 80 77 76

Not determinable .................. 8 6 8 9

1 Plans providing services or payments for services rendered in the 

hospital or by a physician. Excludes plans that provided only dental, vision,

or prescription drug coverage.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 60. Dental care benefits: Eligibility requirements,

full-time employees, small private esatablishments, 1996

Eligibility requirement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

dental care .......................... 12,224 3,153 4,297 4,774

Percent

Total with dental care ............... 100 100 100 100

With a service requirement ... 73 69 76 73

1 month ............................. 13 18 13 9

2 months ........................... 4 2 4 4

3 months ........................... 17 15 21 15

4 -5 months ....................... 1 1 1 1

6 months ........................... 3 1 2 5

7 - 11 months .................... 14 15 15 13

12 months ......................... 3 2 3 3

Greater than 12 months .... 19 15 17 24

Without a service

requirement .................... 22 27 19 22

Not determinable1 ................. 5 4 5 5

1 Plans where service requirements were unknown, usually because plan

documents (typically prepared by dental care provider) did not specify the

employer’s eligibility provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
59

Life insurance is provided to a majority of full-time employees in small private establishments (tables 61-70); most

of these workers are covered by flat dollar amounts, often

$10,000 to $25,000. Formulas based on earnings, such as

multiple-of-earnings formulas, which commonly provide

basic insurance of one or two times annual salary, cover

virtually all of the remaining life insurance plan participants. Multiple-of-earnings formulas are more prevalent

in medium and large private establishments.

Employers generally pay the entire cost of basic life insurance. When employee contributions are required, it is

frequently because life insurance benefits are being offered

as part of a cafeteria plan or reimbursement account. (For

definitions of these plans, see chapter 8.) These plans allow workers to choose from various benefits options depending on their needs. In such cases, employees may have

to contribute, often in the form of pretax dollars, to obtain

the benefit package they desire. Another form of employee

contribution is a specified flat dollar amount per $1,000 of

coverage, such as 20 cents per $1,000 of coverage per month.

Types and amounts of benefit formulas

A flat dollar amount of insurance is the most prevalent

means of providing life insurance protection for full-time

participants in small private establishments. Insurance

amounts ranging from $5,000 to $25,000 are quite common in such plans. Blue-collar and service workers are much

more likely to receive this type of benefit than professional,

technical, and related workers or clerical and sales workers. However, when provided, the flat-dollar amount of life

insurance coverage is usually highest for the professional,

technical, and related workers.

Most of the other full-time life insurance participants

have basic coverage linked to their earnings. This link enables the level of protection to increase automatically with

a rise in pay. The most prevalent method of tying life insurance protection to earnings is to multiply the employee’s

annual earnings by a factor of one or two and round the

product to the next higher $1,000. For example, an employee earning $22,700 would receive $46,000 of coverage

under a plan providing two times earnings ($22,700 x 2 =

$45,400, which rounds up to $46,000). Participants covered by these plans may have a limit placed on the amount

of coverage available. Such maximums usually range between $50,000 and $500,000.

Other methods of providing life insurance protection

cover a small percent of participants. These include: flat

dollar amounts that increase as service increases; flat dollar amounts that increase as wages increase; and multipleof-earnings formulas that increase the multiple at higher

salary levels.

Coverage for older active workers and retirees

Many plans reduce benefits for older active workers. Coverage is reduced to minimize the increased cost of insuring

older workers.21 Plans that reduce coverage commonly make

their first reduction at age 65 or 70. Rarely do reductions

occur before age 65.

Many plans reduce coverage for older workers only once,

typically to 50 percent of the original life insurance amount.

Other plans reduce coverage in several stages. For example,

at age 65 coverage may be reduced to 65 percent and then

at age 70 it may be reduced to 50 percent.

In some instances, basic life insurance coverage continues after retirement for full-time participants in small private establishments. This coverage almost always continues for the rest of the retiree’s life, but the amount of the

benefit is usually reduced at least once during retirement.22

Related protection

Additional life insurance, supplementing basic coverage,

is sometimes available. In virtually all cases, employees have

to pay the full premium for such benefits. The typical supplemental plan provides term life insurance in multiples of

one to three times annual pay, at the employee’s option.

The availability of supplemental coverage is more prevalent for employees who have their basic insurance determined by a multiple-of-earnings formula than for those with

a flat dollar amount of coverage.

Life insurance coverage for dependents is also available

to many participants. Workers with this coverage are usually required to pay the entire premium. The most prevalent method used to provide dependent coverage is a flat

dollar benefit. In such plans, spousal coverage typically

provides benefits of $5,000 or more while coverage for children is often $1,000, $2,000, or $5,000 per child. Among

other plans, the employee has the option to select specific

benefits.

Chapter 5. Life Insurance

21 Details on life insurance benefits for older workers are discussed by

Michael A. Miller in “Age-Related Reductions in Workers’ Life Insurance,”

Monthly Labor Review, September 1985, pp. 29-34. 22 For more information on retiree life insurance, see Margaret Simons

and Cynthia Thompson, “Life Insurance Benefits for Retired Workers,”

Monthly Labor Review, September 1990, pp. 17-21.
60

Service requirements

About three-quarters of the participants in life insurance

plans have to work a minimum period to qualify for the

plan. The most prevalent service requirements for such

workers are 1 to 3 months. Many of the other participants

do not have to meet any service requirement to qualify for

benefits.

Accidental death and dismemberment

Accidental death and dismemberment (AD&D) insurance

is available to most life insurance plan participants in small

private establishments. This insurance provides additional

benefits if a worker dies or loses an eye or a limb in an

accident. The AD&D benefit commonly equals the basic

life insurance benefit for accidental death, and a portion of

that benefit for dismemberment.23

23 For more information on accidental death and dismemberment benefits, see Cynthia Thompson, “Compensation for Death and Dismemberment,”

Monthly Labor Review, September 1989, pp. 13-17.

Survivor income benefits

A few full-time employees in small private establishments

are covered by plans that provide a monthly income to surviving members of a deceased employee’s family. These

survivor income benefits are in addition to other benefits,

such as basic life insurance and survivor pension benefits.

Survivor income payments are generally a percentage of

the employee’s pay or a flat dollar amount. Benefits usually

continue for 24 months, although some continue until a

specific event occurs, such as the surviving spouse remarries or reaches age 65, or surviving children reach a given

age.
61

Table 61. Life insurance: Summary of provisions, full-time

employees, small private establishments, 1996

Item

All

employees

Professional,

technical,

and 

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

Multiple of earnings benefit ... 34 43 43 23

Dollar amount benefit ........... 64 55 54 77

With AD&D ........................... 77 81 76 77

With survivor coverage ......... 1 1 () 1 1 ( )

Benefits reduced for older

active workers ..................... 28 31 32 24

Retiree coverage available ... 13 11 14 13

Supplemental coverage

available ............................. 26 29 31 20

Dependent coverage

available ............................. 31 31 32 30

Required employee

contribution ......................... 18 15 17 20

1 Less then 0.5 percent.

NOTE: Where applicable, dash indicates no employees in this category.

Table 62. Life insurance: Method of determining basic

coverage, full-time employees, small private establishments,

1996

Type

All

employees

Professional,

technical,

and 

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

Multiple of earnings benefit 34 43 43 23

Fixed multiple of

earnings2 ...................... 34 43 43 23

Multiple varies by

earnings ........................ 1 () 1 1 ( ) 1 ( )

Multiple varies by service 1 ( ) 1 ( ) 1 () –

Dollar amount benefit ......... 64 55 54 77

Flat dollar amount ........... 62 54 53 74

Dollar amount varies by

earnings ........................ 1 1 1 2

Dollar amount varies by

service .......................... 1 ( ) 1 ( ) 1 () 1

Other ................................... 2 2 3 1

1 Less than 0.5 percent. 2 Includes participants in plans in which insurance equaled a multiple of

earnings, plus or minus a specified amount.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
62

Table 63. Life insurance: Flat dollar benefit amounts, full-time

employees, small private establishments, 1996

Amount of insurance

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Blue-collar

and

service

employees

Number (in thousands) with

dollar amount of basic life

insurance ................................ 15,778 3,180 4,529 8,068

Percent

Total with dollar amount of

basic life insurance ................. 100 100 100 100

Flat dollar amount ............. 97 98 98 97

Less than $5,000 .......... 3 1 2 4

$5,000 - $9,999 ............ 10 4 7 13

$10,000 - $14,999 ........ 37 32 35 39

$15,000 - $19,999 ........ 21 23 24 20

$20,000 - $24,999 ........ 11 15 10 10

$25,000 - $29,999 ........ 8 11 11 5

$30,000 - $49,999 ........ 3 3 3 3

$50,000 - $99,999 ........ 4 8 4 3

$100,000 and over ........ 1 1 2 –

Dollar amount varies by

earnings .......................... 2 2 2 2

Dollar amount varies by

service ............................ 1 1 () 1 1

Average2

Average flat dollar amount of

basic life insurance ................. $16,189 $19,679 $17,683 $13,956

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude workers

without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
63

Table 64. Life insurance: Multiple of earnings benefit

amounts, full-time employees, small private establishments,

1996

Formula

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

multiple of earnings basic life

insurance ................................ 8,484 2,496 3,585 2,403

Percent

Total with multiple of earnings

formula .................................... 100 100 100 100

Flat multiple-of-earnings1 99 99 99 100

Less than 1.0 ................ 3 3 2 3

1.0 ................................. 53 51 49 61

1.1 - 1.9 ........................ 16 13 18 18

2.0 ................................. 21 24 25 14

2.1 - 2.9 ........................ 1 1 2 1

3.0 ................................. 4 6 3 1

Greater than 3.0 ........... 1 2 () 1 2

Multiple varies by earnings 1 1 1 2 ( )

Multiple varies by service 2 ( ) 2 ( ) 2 () –

Average3

Average flat multiple of

earnings formula ..................... 1.4 1.5 1.5 1.3

1 Includes participants in plans in which insurance equaled a multiple of

earnings, plus or minus a specified amount. 2 Less than 0.5 percent. 3 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
64

Table 65. Life insurance: Maximum benefits placed on multiple of

earnings formulas, full-time employees, small private establishments,

1996

Maximum

All

employees

Professional,

technical,

and

related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Number (in thousands) with

multiple of earnings formula ... 8,484 2,496 3,585 2,403

Percent

Total with multiple of earnings

formula .................................... 100 100 100 100

With maximum benefit

amount ................................ 59 58 64 53

Less than $50,000 ............ 1 1 () 2 1

$50,000 - $99,999 ............ 20 22 20 20

$100,000 ........................... 11 12 13 7

$100,001 - $249,999 ........ 9 11 10 5

$250,000 - $499,999 ........ 9 7 11 10

$500,000 ........................... 3334

$500,001 - $999,999 ........ 4256

$1,000,000 or more .......... 1 1 () 2 1 ( )

No maximum specified ......... 28 29 25 30

Not determinable .................. 13 13 11 17

Average2

Average maximum .................... $238,307 $167,925 $262,604 $274,725

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude workers

without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates no employees in this category.
65

Table 66. Life insurance: Retiree coverage, full-time

employees, small private establishments, 1996

Coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

With retiree coverage ......... 13 11 14 13

Employer paid ................. 6 5 8 6

Jointly paid ...................... 2 2 2 1

Retiree paid .................... 5 4 5 6

No retiree coverage ............ 78 80 78 78

Not determinable ................ 9 9 8 9

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 67. Life insurance: Reductions in benefits for retirees,

full-time employees, small private establishments, 1996

Reduction policy

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

With retiree coverage ......... 13 11 14 13

No reductions ................. 2 2 2 3

With reductions

Reduced once .......... 5 4 7 5

Reduced more than

once ........................ 3 3 5 2

Reduction not

determinable ................. 2 2 1 3

No retiree coverage ............ 78 80 78 78

Not determinable ................ 9 9 8 9

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 68. Life insurance: Supplemental coverage, full-time

employees, small private establishments, 1996

Coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

With supplemental coverage .... 26 29 31 20

Employee paid ...................... 23 25 28 18

Jointly paid ............................ 1 () 1 1 ( ) 1 ( )

Flexible benefits .................... 2 4 3 2

No supplemental coverage ....... 66 65 61 71

Not determinable ...................... 8 6 7 8

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
66

Table 69. Life insurance: Dependent coverage, full-time

employees, small private establishments, 1996

Coverage

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

With dependent coverage ......... 31 31 32 30

Employer paid ....................... 8 7 7 9

Employee paid ...................... 19 21 20 17

Jointly paid ............................ 2 1 3 2

Flexible benefits .................... 2 3 3 2

No dependent coverage ........... 61 62 59 61

Not determinable ...................... 8 7 8 9

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 70. Life insurance: Eligibility requirement, full-time

employees, small private establishments, 1996

Length-of-service requirement

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

basic life insurance ................. 24,635 5,764 8,327 10,544

Percent

Total with basic life insurance ... 100 100 100 100

With service requirement .......... 73 65 73 77

1 month ................................. 22 24 23 19

2 months ............................... 7 4 7 8

3 months ............................... 34 27 34 37

4 - 5 months .......................... 1 1 1 1

6 months ............................... 7 6 6 9

7 - 11 months ........................ 1 () – – 1 ( )

12 months ............................. 2 2 1 3

Greater than 12 months ........ 1 ( ) 1 ( ) 1 ( ) 1 ( )

No service requirement ............ 24 31 23 20

Not determinable ...................... 3 4 4 3

Average2

Average service requirement (in

months) ................................... 3.1 3.1 2.9 3.3

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exlude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
67

Defined benefit pension plans obligate employers to provide retirement benefits calculated by a formula specified

in the plan. Benefits generally are based on salary, years of

service, or both. Employer, however, ordinarily have considerable latitude in financing these benefits. Most fulltime employees in small private establishments are not offered defined benefit pension plans. However, in recent years

defined contribution plans have become increasingly prevalent. Defined contribution plans, which specify employer

and__if applicable__employee contributions, but do not guarantee a specific benefit, are discussed in the next chapter.

The Employee Benefits Survey captures data on a variety of defined benefit pension plans provisions, such as:

• Formulas for calculating benefits

• Coordination of benefits with Social Security payments

• Ceilings on benefit payments

• Survivor annuities

• Age and service requirements for retirement

• Availability of supplements to normal and early retirement pension benefits

• Disability retirement benefits

• Vesting schedules

• Postretirement pension increases

• Employee contributions; and

• Plan participation requirements.

Benefit formulas

Earnings-based formulas are frequently used to determine

retirement payments for employees covered by defined benefit pension plans. Benefits based on such formulas are

usually a flat percent of the employee’s annual earnings per

year of service (for example, 1.5 percent of earnings times

30 years of service, or 45 percent of annual earnings), or a

percent that varies by service, earnings, or age.

Approaches to calculating annual earnings and the rate

paid per year of service vary. For many participants with

earnings-based formulas, pensions are based on earnings

in the final years of employment (terminal-earnings formula); for the remainder, an average of career earnings is

used (career-earnings formula).

Terminal earnings often are defined as the average over

a 5-year period. Such formulas usually designate the 5 consecutive years with the highest earnings out of the last 10

years before retirement.

Participants in plans with terminal-earnings formulas

frequently have benefit formulas that vary according to service, earnings, or a combination of the two factors. As an

example of variation by earnings, a terminal-earnings formula might credit an employee with 1 percent of earnings

up to the first $12,000 in each year of service plus 1.5 percent of the earnings exceeding that amount. If total earnings were $40,000 and service was 30 years, the annual

pension payment would be computed as follows:

1 percent times $12,000 ................................................... $120

1.5 percent times $28,000 ................................................ $420

Total credits per year of service ........................................ $540

Credits ($540) times 30 years .......................................... $16,200

Similarly, formulas based on career earnings can provide participants with percentages that vary, usually by earnings.

The earnings used to compute pension benefits for earnings-based formulas commonly include only “basic” earnings, that is, straight-time earnings. When additional earnings are part of the benefit calculation, they may include

overtime pay, shift differentials, bonuses, and commissions.

Most plans that do not use a percent-of-earnings benefit

formula specify a dollar amount to be paid for each year of

service; for example, a plan might pay $20 monthly for

each of an employee’s 30 years of service, thus yielding a

pension of $600 a month. Although the dollar amount in

these formulas can vary with an employee’s earnings or

service, the usual method is to multiply a uniform (single)

dollar amount by years of service.

The basis of pension payments can differ sharply by

employee group. Traditionally, white-collar participants

are provided earnings-based pensions. Although this basis

also is used for blue-collar participants, dollar-amount formulas are more prevalent for them.

In addition, two other types of defined benefit pension

formulas are used. Percent-of-contribution formulas specify

a periodic contribution by an employer, and occasionally

by an employee, to a plan. Benefits are a percent of total

Chapter 6. Defined Benefit Plans
68

contributions, for example, 1 percent of total contributions

per month; if career contributions totaled $40,000, then

monthly pension benefits would equal $400. Cash account

pension formulas specify an employer contribution and a

rate of interest on that contribution. Benefits are computed

as a percent of each employee’s account balance. Although

both percent-of-contribution and cash account pension formulas resemble the formulas in defined contribution plans,

the Internal Revenue Service classifies these plans as defined benefit plans because the employer guarantees a certain level of benefits.

In some pension plans, participants are eligible to receive benefits from either primary or alternative formulas,

whichever yields a greater benefit. Alternative formulas

are often included to provide a minimum level of benefits

for persons with short service or low earnings. For example, a plan may have the two following formulas: a primary formula of 1.25 percent of average career earnings

times years of service and an alternative formula of $15 a

month (or $180 a year) for each year of service. In this

case, the alternative formula provides a higher benefit for

persons with average career earnings of less than $14,400

a year.

Private benefits and Social Security payments

Regardless of whether they provide private retirement plans,

all employers (except certain exempted ones) share the cost

of Social Security coverage equally with their employees.

Because many plan sponsors feel that private pension and

Social Security benefits should not be duplicative, pension

plans may contain Social Security integration provisions.

Such integration may take the form of an offset provision,

under which part of the Social Security benefit is subtracted

from the annuity, or a provision to calculate the pension at

a lower rate for earnings below the Social Security taxable

wage base24 than for earnings above the base.

Social Security offsets are generally applied immediately

upon retirement, whether or not the retiree is eligible for

Social Security benefits. The offset typically is specified as

a small percentage of the Social Security payment, for example, 1 percent times years of service. There may be a

maximum offset, for example, 50 percent of the Social Security payment.

Plans that apply lower pension benefit rates to an

employee’s earnings below a specified level and higher rates

above that level are known as “step-rate excess” plans. For

example, a plan may provide a benefit equal to 1 percent of

earnings up through the Social Security taxable wage base

and 1.5 percent of earnings above the base for each year of

service.

Benefit formulas are often coordinated with Social

Security for pension plan participants. In 1989 and earlier

surveys in medium and large private establishments, the

offset approach to coordinating private pension plans and

Social Security was more prevalent than the step-rate excess approach, especially among terminal-earnings-based

plans. Since 1991, step-rate excess plans in all private sector employee benefit surveys have been the most frequently

observed method of coordinating benefits for all earningsbased plans. This change resulted from the Tax Reform Act

of 1986, which imposed new rules for pension plans that

coordinate with Social Security benefits.

Maximum and minimum benefit provisions

The Employee Retirement Income Security Act of 1974

(ERISA) and subsequent amendments place ceilings on the

size of annual pensions from defined benefit plans. These

restrictions largely affect only highly compensated employees. Many plans, however, have provisions that restrict

benefit levels for all participants. For example, some participants are in plans that limit the number of years of service included in benefit computations; maximums of 30 or

35 years are typical.

In a few pension plans, participants can be covered by a

provision for a minimum retirement benefit, regardless of

age or service. Such minimum benefits provide a level of

protection, such as a flat amount of $100 a month, below

which retirement benefits cannot fall.

Methods of payment

The benefit formulas just described are used to compute a

straight-life annuity, that is, a periodic payment for the life

of the retiree, with no additional payments to survivors.

Defined benefit pension plans offer a variety of additional

payment methods, although each is based on the straightlife annuity. For married employees, the standard benefit

prescribed by law is the joint-and-survivor annuity, which

provides payments to a surviving spouse after a retiree dies.

Such employees may choose a straight-life annuity or some

other form of benefit, but only upon written approval of

both the employee and spouse.

Another optional method of payment is for the employee

to receive some or all of the pension benefit in a lump-sum

payment. This lump sum provides the employee with the

actuarial equivalent of all or part of the annuity. Commonly, only a full lump-sum option is available. If a participant elects a full lump-sum distribution, he or she receives no further benefits from the pension plan. Where a

partial distribution is available, the participant generally

receives a reduced annuity for the remainder of her or his

life.

Survivor annuities

ERISA requires defined benefit pension plans to provide a

spouse with at least 50 percent of the retiree’s payments

after the retiree’s death. When this type of pension is paid,

the employee will usually receive a lower benefit during

retirement to account for the likely increase in the length of

time the plan will have to make payments. When the retiree dies, a pension benefit will be payable for the life of

24 The Social Security taxable wage base increases annually. In 1996 it

was $62,700.
69

the surviving spouse. All defined benefit pension plan participants have survivor annuity options available to them.25

The prevalent type of survivor benefits__joint-and-survivor annuities__provides a reduced benefit to the retiree and

a percentage of that reduced benefit to the spouse upon the

retiree’s death. The reduction may be a percent of the

benefit__for example, 10 percent__or may be actuarially determined based on the life expectancy of the retiree and

spouse. Some participants have plans that offer only one

joint-and-survivor option that pays a surviving spouse 50

percent of the retiree’s adjusted pension. Many participants,

however, have a choice of two or more alternative percentages (for example, 50, 67, or 100 percent) to be continued

as a spousal benefit, with corresponding reductions in the

employees’ annuities. In some cases, when the spouse predeceases the retiree, the retiree’s unreduced benefit may be

restored.

Unlike joint-and-survivor annuities, survivor annuities

based on the retiree’s accrued benefit do not reduce the

employee’s pension to adjust for survivor benefits. The retiree receives the straight-life annuity; following the retiree’s

death, the spouse receives a percent of that annuity__often

50 percent.

Some pension plans provide a lump sum or installment

death benefit to the survivor of a deceased retiree. Payments are in the form of a flat amount, such as $5,000, in

addition to the survivor annuity or a certain number of

monthly payments, such as 60 or 180, less payments already received by the retiree. The latter may occur when

the retiree and the spouse do not elect to take the joint-andsurvivor annuity option.

A few pension plans provide survivor benefits for children, usually after the retiree dies and there is no surviving

spouse. The payment is usually a monthly flat-dollar amount

to each child.

Preretirement survivor benefits

Defined benefit pension plans usually offer survivor benefits in case the employee dies before retirement. Participants usually have to be vested, that is, have a permanent

right to accrued pension benefits before plans would make

such benefits available. Very often, a surviving spouse would

receive an annuity equivalent to the amount payable if the

employee had retired on the day prior to death with a jointand-survivor form of payment in effect. Most survivor pensions like these are based on an early retirement benefit

and, aside from the joint-and-survivor reduction, are provided at no cost to the employee. For some participants,

however, preretirement joint-and-survivor protection may

involve an extra cost to the employee and is available only

if elected. The retiree normally pays this cost through a

small deduction in the pension, ultimately payable to either

the retiree or the surviving spouse.

Other participants have a preretirement survivor annuity calculated as a portion of their accrued benefit (the benefit earned as of the date they died, without a joint-andsurvivor reduction). If an active employee dies after

completion of the vesting requirement, a typical survivor

would receive an annuity equal to 50 percent of the

employee’s accrued benefit to date. Payments may be reduced by the early retirement adjustment and begin when

the employee would have reached early retirement age. If

the employee lives to become eligible for early retirement

and dies before normal retirement, the survivor benefit in

many cases switches to the equivalent of a 50-percent jointand-survivor benefit calculated as if the employee had retired on the day of death. (When provisions change based

on age of the employee, the earliest available preretirement

survivor annuity is tabulated.)

Some plans also provide lump-sum death benefits to the

survivors of employees who die before retirement. Lumpsum payments are in the form of a flat amount, such as

$3,000 and in addition to any annuity that may be available, or the equivalent of a specified number of monthly

retirement payments, such as 60. This is similar to the

joint-and-survivor benefits offered to spouses of deceased

retirees.

Normal retirement

Many of the defined benefit pension plan participants in

small private establishments can retire before age 65 and

still receive full pensions (normal retirement benefits). Participants who are required to be age 65 to receive unreduced benefits usually do not have to satisfy a length-ofservice requirement; however, some plans may require

workers hired after age 60 to complete at least 5 years of

service.

When plans permit normal retirement prior to age 65,

they often impose a minimum service requirement. For

example, normal retirement at age 62 is frequently available, but a service requirement, such as 5 or 10 years might

also apply. Participants who can retire with unreduced benefits prior to age 62, including those who can retire at any

age, usually have to work longer periods, such as 30 years.

Plans that require combining a worker’s age and service

to reach a specified sum, such as 80 or 85, for retirement

with full benefits cover some participants. This type of

arrangement usually specifies a minimum age. Minimum

lengths of service are less prevalent.

A few pension plan participants are in plans that provide monthly payments to supplement normal retirement

pension benefits. These supplements are usually found in

plans where participants can retire before age 62; usually

the supplements lasts until the retiree is eligible for Social

Security benefits.

Early retirement

It is very common for employees participating in defined

benefit pension plans to be allowed to retire before normal

25 Survivor benefits are discussed in more detail in Donald Bell and Avy

Graham, “Surviving Spouse’s Benefits in Private Pension Plans,” Monthly

Labor Review, April 1984, pp. 23-31.
70

retirement age and receive an immediate, but reduced, pension. Early retirement normally is solely at the employee’s

option; plans generally do not require employer approval

for early retirement benefits. The amount of an early retirement pension is reduced because benefits begin at an

earlier age, and the retiree is expected to receive plan payments over a longer period.

Most early retirement benefits are computed based on

the normal retirement formula. The benefit is then reduced

by a percentage (factor) for each year between the actual

and normal retirement ages. If a plan’s normal retirement

age is 62, for example, and the reduction factor is 6 percent, a person retiring at age 59 would receive 82 percent

of the normal formula amount (that is, the person loses 6

percent for every year under the normal age). In addition to

the 18-percent reduction for early retirement, the annuity

in this example would be based on fewer years of service

and possibly lower earnings than at age 62.

The reduction factor may be uniform or may vary by age

or service. For example, reduction factors may differ for

each year of early retirement, based on the employee’s life

expectancy at that age (actuarial reductions), or the reduction factor may differ for age brackets of several years instead of changing each year. Many participants with early

retirement opportunities have uniform reduction factors, for

example, 4 or 6 percent, for each year of early retirement.

In plans with a lower uniform reduction, such as 3 percent

per year, the employer subsidizes some of the early retirement benefit by making the reduction less severe than if

benefits are computed actuarially.

A small number of pension plans provide additional

monthly payments to supplement the early retirement pension if employees retire after meeting a specified age or

length-of-service requirement generally higher than the

minimum needed to retire. Plan sponsors include these

supplementary benefits either to induce older workers to

retire or as a reward for long service. Supplements generally last until Social Security benefits are payable.

Disability retirement

A career-ending disability may entitle an employee to a

pension before retirement age. If the disability satisfies the

plan’s definition of total disability, pension benefits often

begin immediately. When an employer provides other

sources of disability income, such as long-term disability

insurance, the plan might defer disability retirement benefits until the other forms of income have ceased. Most pension plan participants are covered by some type of disability retirement provision.

While blue-collar workers with disability retirement coverage often are in plans with immediate benefits, many

white-collar workers are in plans that defer benefits. Workers with deferred benefits often receive long-term disability

insurance (LTD) benefits that commonly provide 50 or 60

percent of earnings at the time of disability; this frequently

exceeds the amount that pension plans with immediate disability retirement provide. Furthermore, deferred retirement

benefits are often greater than immediate pensions, primarily because the time during which LTD benefits are paid is

typically added to an employee’s length of service for

computation of pension benefits. (See chapter 3 for details

of LTD benefit plans.)

Eligibility for disability retirement benefits usually depends on length of service; often 10 years or more are required. Some participants, however, have no age or service

requirement or have to meet the qualifications of their LTD

plans, which usually imposes service requirements of 6

months or less.

Vesting

Even when an employee leaves an employer before becoming eligible for either a normal, early, or disability retirement benefit, a plan may ultimately pay a pension. If certain conditions are satisfied at the time of separation, workers

have a vested interest in all or a portion of their accrued

pension benefits and may begin receiving benefits years later.

Although all pension participants are entitled to vested

benefits under ERISA, some variations exist as to when

vesting occurs. As a result of the Tax Reform Act of 1986,

however, most plan sponsors have shortened their vesting

schedules in the past few years.26 The majority of participants in defined benefit pension plans have to complete 5

years of service at any age before benefits are guaranteed

(cliff vesting). Most of the remaining participants are in

plans requiring 10 years of service. Participants not in plans

with cliff vesting are usually covered by a graduated vesting provision, which increases the portion of guaranteed

benefits as years of service increase. Full vesting usually

occurs after no more than 7 years.

Participants normally accrue years of vested service regardless of age, although a few can be affected by the plan

sponsor’s right to exclude years of service before a specified age in determining vesting eligibility.

Unreduced vested pension payments begin at the plan’s

normal retirement age, based on the benefit formula in effect when the employee left the plan. As an alternative,

terminated and vested participants may receive a reduced

pension prior to normal retirement age if the participant

had satisfied the early retirement service requirement before leaving the plan.

For terminated and vested employees who wish to receive a pension beginning prior to normal retirement age,

ERISA requires the benefit to be at least the actuarial equivalent of what would have been received starting at age 65.

The actuarial equivalent benefit is a reduced amount determined by the life expectancy at the age that pension payments begin. Although under ERISA the reduction factor

used in determining the pension for terminated and vested

26 In 1996, multiemployer plans could continue to use 10-year vesting

schedules pursuant to a collectively bargained agreement. The Small

Business Job Protection Act of 1996 (Publication 104-188) shortened the

schedule to 5 years, effective January 1, 1997, but not later than January 1,

1999.
71

employees can be more severe than for early retirement,

the same factor is used in plans covering many participants

with early retirement provisions. When reductions differ,

it is common to provide actuarial reductions to recipients

of deferred vested benefits, eliminating the subsidy employers give to employees choosing early retirement.27

Portability

When employees change employers, the employer frequently

holds vested pension benefits until the employee reaches

retirement age. Alternatively, a plan may include a portability provision, that is, the ability to transfer years of credited service or accumulated benefits from one employer to

another. Currently, employees with a defined benefit pension plan are infrequently covered by a portability provision. Most of these participants are covered by either a

multiemployer plan established by a union or a single employer plan offered by an establishment that has a portability agreement with related establishments, such as in the

utilities industry. In these plans, if a vested employee moves

to another employer, benefits from the prior employer, usually in the form of years of credited service, are transferred

over to the new employer.

Postretirement pension increases

Inflation can severely erode the purchasing power of a fixed

pension over a worker’s retirement years. To guard against

this, a few pension plans are adjusted either on a discretionary basis or are subject to automatic increases. The

Employee Benefits Survey studies automatic increases and

discretionary, or ad hoc, increases granted during the 5-

year period prior to the survey. Automatic postretirement

adjustments are usually annual adjustments based on the

Bureau of Labor Statistics’ Consumer Price Index (CPI)

changes in the private sector. Adjustments can be restricted,

however, by provisions that limit the benefit change to a

portion of the CPI change or by ceilings (generally 3 percent or less) on the periodic increase that can be applied.

Plans providing cost-of-living increases usually call for

annual adjustments.

Ad hoc pension increases are not directly linked to a

cost-of-living index. Instead, retirees’ current pensions

usually increase by a percent of the present benefit, commonly a uniform amount. For example, a plan may provide

a 5-percent pension increase to all individuals who retired

prior to the survey year. Other plans may provide greater

pension increases for individuals retired longer. For instance, a plan might grant a 5-percent pension increase if

an employee has been retired less than 10 years, and a 10-

percent increase, if 10 years or more.

Employee contributions

The employer usually pays the full cost of defined benefit

pension plans for private sector participants. Participants

in contributory plans usually pay a flat percent of earnings

on a pre-tax basis.

Participation requirements

Some employees with defined benefit pension plans have

immediate coverage when they are hired. Others can participate regardless of age but have to meet a service requirement, usually 1 year. However, most employees with eligibility requirements normally cannot enter the pension plan

until they reach age 21 and complete 1 year of service; this

is the most restrictive requirement permitted under the Internal Revenue Code.28

27 For additional details on plan vesting requirements, see Avy D. Graham, “How Has Vesting Changed Since Passage of Employee Retirement

Income Security Act?,” Monthly Labor Review, August 1988, pp. 20-25.

28 However, some plans, such as those in religious institutions, are exempt

from certain restrictions in the Internal Revenue Code and may require employees to meet greater age or length-of-service levels before coverage begins.
72

Table 71. Defined benefit plans: Summary of plan provisions,

full-time employees, small private establishments, 1996

Provision

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

defined benefit plan ............ 5,883 969 2,013 2,902

Percent

Total with defined benefit plan .. 100 100 100 100

Basic provisions

Employee contribution

required .......................... 3 7 1 3

Benefits based on earnings .. 64 78 82 46

Benefits integrated with

Social Security ................ 44 54 61 29

Benefits subject to

maximum1 ...................... 39 31 42 39

Early retirement benefits

available ......................... 92 94 91 93

Disability retirement benefits

available ......................... 67 66 54 76

Portability provisions ............. 21 10 9 33

Availability of lump sum

benefits at retirement ...... 17 21 26 9

Other provisions

Normal retirement

supplement available ...... 1 - 1 1

Early retirement supplement

available ......................... 3 10 2 2 ( )

Minimum benefits provision .. 2 3 4 1

Early retirement requires

employer approval .......... 4 4 6 3

Deferred vested benefits

available prior to normal

retirement age ................ 67 53 72 68

Lump-sum postretirement

survivor benefits ............. 7 8 3 9

Lump-sum preretirement

survivor benefits ............. 4 3 4 4

Full pension restored if

spouse predeceases

retiree ............................. 17 19 7 23

Survivor benefits for children 2 3 3 1

1 Provisions that restrict benefits, such as limits on the number of years

of service included in benefit computations. 2 Less than 0.5 percent.

NOTE: Where applicable, dash indicates no employees in this category.

Table 72. Defined benefit plans: Primary formula and

availability of alternative formula, full-time employees, small

private establishments, 1996

Benefit

formula1

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

defined benefit plan ............ 5,883 969 2,013 2,902

Percent

Total with defined benefit plan .. 100 100 100 100

Percent of terminal earnings 53 68 67 39

With alternative formula .... 9 15 8 8

Percent of career earnings ... 10 11 15 7

With alternative formula .... 2 2 2 1

Dollar amount formula .......... 28 15 14 42

With alternative formula .... 2 () - 1 2 ( )

Percent of contribution

formula ............................ 8 5 3 12

With alternative formula .... ----

Cash account ........................ 2 () 2 2 ( ) 2 ( )

With alternative formula .... ----

Other ..................................... 2 ( ) 2 () 1 -

1 Alternative formulas are generally designed to provide a minimum

benefit for employees with short service or low earnings. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
73

Table 73. Defined benefit plans: Terminal earnings formula,

full-time employees, small private establishments, 1996

Item

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

terminal earnings formula ... 3,138 655 1,353 1,129

Percent

Total with terminal earnings

formula ................................ 100 100 100 100

Flat percent per year of

service ............................ 47 48 35 61

Less than 1.00 percent ..... 1 - - 3

1.00 - 1.24 percent ........... 7 8 5 9

1.25 - 1.49 percent ........... 6 7 6 7

1.50 - 1.74 percent ........... 11 14 8 14

1.75 - 1.99 percent ........... 7 10 3 11

2.00 - 2.24 percent ........... 10 8 11 9

2.25 percent or greater ..... 4 1 () 2 8

Percent per year varies ........ 53 52 65 39

By service ......................... 4 7 4 1 ( )

By earnings ....................... 35 24 40 34

By age .............................. ----

By earnings and service ... 15 21 21 5

Other ..................................... ----

Average2

Average flat percent per year of

service ................................ 1.66 1.60 1.69 1.67

1 Less than 0.5 percent. 2 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 74. Defined benefit plans: Definition of terminal

earnings, full-time employees, small private establishments,

1996

Definition

of

earnings

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

terminal earnings formula ... 3,138 655 1,353 1,129

Percent

Total with terminal earnings

formula ................................ 100 100 100 100

Three years .......................... 24 27 24 23

Last 3 ................................ 1 1 1 () 1

High 3 ............................... 5 4 4 8

Of last 10 ...................... 1 1 1 () 1

Of career ....................... 5 3 3 7

High consecutive 3 ........... 18 21 20 14

Of last 10 ...................... 9 8 8 11

Of career ....................... 6 5 12 1

Of other time period ...... 3 8 - 3

Five years ............................. 68 67 70 67

Last 5 ................................ 6 4 3 10

High 5 ............................... 15 16 17 13

Of last 10 ...................... 7 2 8 8

Of career ....................... 6 5 7 4

Of other time period ...... 3 10 2 -

High consecutive 5 ........... 48 47 51 44

Of last 10 ...................... 30 35 38 17

Of career ....................... 17 12 12 26

Of other time period ...... 1 - 1 1 ( )

Other period2 ........................ 4 4 3 5

Not determinable .................. 3 1 3 5

1 Less than 0.5 percent. 2 Formulas based on earnings during period other than 3 or 5 years’

service, or period not immediately before retirement (for example, first 5 of

last 10 years’ service).

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
74

Table 75. Defined benefit plans: Integration with Social

Security, full-time employees, small private establishments,

1996

Intregration

with Social

Security

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

defined benefit pension ...... 5,883 969 2,013 2,902

Percent

Total with defined benefit

pension ............................... 100 100 100 100

With integrated formula ........ 44 54 61 29

Step-rate excess1 ............. 33 35 53 19

Social Security

breakpoint ............... 29 31 48 15

Dollar amount

breakpoint ............... 5 4 5 5

Offset by Social Security2 11 19 9 10

Without integrated formula ... 51 42 35 66

Terminal earnings ............. 15 21 17 11

Other formulas .................. 36 22 18 54

Not determinable .................. 5 4 4 5

1 Formula applies lower benefit rate to earnings subject to FICA (Social

Security) taxes or below a specific dollar breakpoint. 2 Benefit as calculated by formula is reduced by portion of primary Social

Security payments, for example, 50 percent.
75

Table 76. Defined benefit plans: Requirements for normal

retirement, full-time employees, small private establishments,

1996

Requirements

for normal

retirement1

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

defined benefit plan ............ 5,883 969 2,013 2,902

Percent

Total with defined benefit plan .. 100 100 100 100

No age requirement .............. 6 4 5 7

20 - 29 years of service .... 1 - - 2

30 years of service ........... 3 4 3 3

35 years of service ........... 2 () - - 2 ( )

More than 35 years of

service ........................ 2 - 2 2

At age 55 .............................. 2 4 2 2

No service requirement .... 1 - 1 1

5 years of service ............. 2 ( ) 2 () 1 -

20 years of service ........... 2 ( ) 2 () - -

25 years of service ........... 2 () - - 2 ( )

30 years of service ........... 1 4 2 () 1

At age 56 - 59 ....................... 1 1 2 () 2

10 years of service ........... 1 1 2 () 1

30 years of service ........... 2 () - - 2 ( )

At age 60 .............................. 8 10 4 9

No service requirement .... 2 2 1 2

1 - 4 years of service ........ 2 () - - 2 ( )

5 years of service ............. 2 ( ) 2 ( ) 2 ( ) 2 ( )

10 years of service ........... 2 3 1 2

15 years of service ........... 1 2 1 -

20 years of service ........... 2 2 () - 4

30 years of service ........... 1 2 2 1

More than 30 years of

service ........................ 2 ( ) 2 ( ) 2 ( ) 2 ( )

At age 62 .............................. 22 22 26 19

No service requirement .... 8 13 13 4

5 years of service ............. 6 5 7 6

10 years of service ........... 4 2 () 2 6

15 years of service ........... 2 () - 1 2 ( )

20 years of service ........... 1 1 1 2

25 years of service ........... 2 () 1 1 -

30 years of service ........... 2 3 2 2

See footnotes at end of table.

Table 76. Defined benefit plans: Requirements for normal

retirement, full-time employees, small private establishments,

1996 — Continued

Requirements

for normal

retirement1

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Percent

Total with defined benefit plan

At age 63 - 64 ....................... 1 - 2 () 2

No service requirement .... 2 () - - 1

5 years of service ............. 1 - 2 () 1

25 years of service ........... 2 () - - 2 ( )

At age 65 .............................. 53 49 55 54

No service requirement .... 28 30 30 25

1 - 4 years of service ........ 1 1 1 1

5 years of service ............. 18 12 19 19

10 years of service ........... 6 5 5 6

30 years of service ........... 1 1 2 () 2

Sum of age plus service3 ...... 6 10 6 5

Equals 80 .......................... 1 3 1 1

Equals 81 - 89 .................. 2 2 3 2

Equals 90 .......................... 2 6 2 1

1 Normal retirement is defined as the point at which the participant could

retire and immediately receive all accrued benefits by virtue of service and

earnings, without reduction due to age. If a plan had alternative age and

service requirements, the earliest age and associated service were tabulated;

if one alternative did not specify an age, it was the requirement tabulated. 2 Less than 0.5 percent. 3 In some plans, participants must also satisfy a minimum age or service

requirement.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
76

Table 77. Defined benefit plans: Requirements for early

retirement, full-time employees, small private establishments,

1996

Requirements

for early

retirement1

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

defined benefit plan ............ 5,883 969 2,013 2,902

Percent

Total with defined benefit plan .. 100 100 100 100

With early retirement

available ......................... 92 94 91 93

No age requirement .......... 2 3 2 2

20 - 29 years of service 1 1 1 1

30 years of service ....... 2 2 2 1

Less than age 55 .............. 8 6 13 6

No service requirement 2 () - - 2 ( )

1 - 4 years of service .... 2 () - - 2 ( )

10 years of service ....... 2 1 1 3

15 years of service ....... 4 3 8 1

20 years of service ....... 1 - 2 -

25 years of service ....... 2 2 1 1

At age 55 .......................... 74 74 68 77

No service requirement 3 6 1 3

1 - 4 years of service .... 2 ( ) 2 ( ) 2 ( ) 2 ( )

5 years of service ......... 15 13 18 12

6 - 9 years of service .... 1 1 2 2 ( )

10 years of service ....... 43 43 40 45

11 - 14 years of service 2 () 2 2 ( ) 2 ( )

15 years of service ....... 8 7 6 9

20 years of service ....... 4 1 1 8

Between ages 56 - 59 ....... 1 - 1 1

10 years of service ....... 2 () - - 1

15 years of service ....... 2 () - 1 2 ( )

See footnotes at end of table.

Table 77. Defined benefit plans: Requirements for early

retirement, full-time employees, small private establishments,

1996 — Continued

Requirements

for early

retirement1

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Percent

Total with defined benefit plan

With early retirement

available

At age 60 .......................... 2 3 4 1

No service requirement 2 () 1 1 -

5 years of service ......... 1 1 1 -

10 years of service ....... 1 1 2 1

20 years of service ....... 2 ( ) 2 () - -

At age 62 .......................... 2 - 2 () 4

5 years of service ......... 2 () - - 2 ( )

10 years of service ....... 1 - - 2

15 years of service ....... 1 - 2 () 2

Sum of age plus service3 .. 3 9 2 2

Equals less than 80 ...... 2 3 1 1

Equals 80 ...................... 2 () 1 1 2 ( )

Equals 90 ...................... 1 5 - 1

Early retirement not available 6 5 7 5

Not determinable .................. 2 2 () 2 2

1 Early retirement is defined as the point at which a worker could retire

and immediately receive accrued benefits based on service and earnings but

reduced for each year prior to normal retirement age. If a plan had

alternative age and service requirements, the earliest age and associated

service were tabulated; if one alternative did not specify an age, it was the

requirement tabulated. 2 Less than 0.5 percent. 3 In most plans, participants must satisfy a minimum age or service

requirement.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
77

Table 78. Defined benefit plans: Early retirement reduction,

full-time employees, small private establishments, 1996

Early

retirement

reduction1

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

early retirement available ... 5,438 914 1,835 2,690

Percent

Total with early retirement

available ............................. 100 100 100 100

Uniform percentage

reduction2 ....................... 47 49 38 52

Less than 3.0 .................... 1 2 1 1

3.0 ..................................... 9 14 6 9

3.1 - 3.9 ............................ 2 2 2 1

4.0 ..................................... 7 10 10 4

5.0 ..................................... 8 6 7 10

5.1 - 5.9 ............................ 3 () - - 3 ( )

6.0 ..................................... 17 16 10 22

6.1 - 6.9 ............................ 1 3 ( ) 3 () 2

Greater then 7.0 ............... 2 3 () 1 2

Reduction varies ................... 50 47 59 46

By service ......................... 5 3 4 7

By age .............................. 45 43 54 39

Not determinable .................. 3 4 4 2

Average4

Average uniform reduction

percentage .......................... 4.9 4.4 4.6 5.1

1 Reduction for each year prior to normal retirement. 2 In specific cases, uniform percentage reductions may approximate

actuarial reductions, such as early retirement at age 55 with a reduction of 6

percent per year between age 55 and the plan’s normal retirement age of 62. 3 Less than 0.5 percent. 4 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
78

Defined contribution plans specify the level of employer

contributions to a plan, but not the formula for determining

eventual benefits as in a defined benefit plan. Instead, individual accounts are set up for participants, and benefits depend on amounts credited to these accounts, plus investment earnings. Although employers normally guarantee they

will make contributions, the employee bears the risk of fluctuation in investment earnings. Full-time employees in small

private establishments are more likely to be covered by a

defined contribution plan than a defined benefit plan.

This chapter examines details of defined contribution

plans, including:

• Types of defined contribution plans available

• Provisions, such as contributions and distributions,

associated with several types of plans

• Pretax arrangements, known as 401(k) plans, and

their unique features

Since 1984, the number of active participants in private

sector defined contribution plans has risen steadily, while

the number of active participants in defined benefit plans

has declined. Most of the recent participation growth in

defined contribution plans is occurring in new plans, particularly in 401(k) type plans, which offer cash or tax-deferred options on currently taxable compensation.29

Defined contribution plans are primarily designed to

provide retirement benefits. Withdrawals of employer contributions usually are not allowed until retirement age, death,

disability, separation from service, age 591/

2

, or hardship.

However, some plans may impose less stringent restrictions

for withdrawal of employer contributions, for example, permitting one or two withdrawals per year, or allowing withdrawal after 2 or 5 years of service.30 Nevertheless, these

defined contribution plans may also furnish retirement income because withdrawals of the employer’s contributions

are voluntary, not mandatory. For purposes of the Employee

Benefits Survey, all defined contribution plans are considered retirement plans.

Plan types

Defined contribution plans may be classified by type of plan

(table 1). The survey provides incidence data on the following types: Savings and thrift plans, deferred profit-sharing plans, money purchase pension plans, employee stock

ownership plans (ESOP’s), simplified employee pensions

(SEP’s), and stock bonus plans.31 Savings and thrift plans

and deferred profit-sharing plans are more common among

white-collar workers.

Participants in defined contribution plans often make

contributions to their plans, especially under savings and

thrift plans. In savings and thrift plans, participants are

required to make contributions as a condition of joining the

plan, with the employer matching some or all of the employee contribution. In contrast, employers make all contributions for nearly all participants in private defined benefit plans.

Employees may receive retirement benefits from defined

benefit plans, defined contribution plans, or both. When

more than one plan is available, the employer most often

provides a defined benefit plan and a savings and thrift

plan.

Another common type of plan is the 401(k) plan (named

after the applicable section of the Internal Revenue Code).

Such plans, also known as cash or deferred arrangement

plans, are features of defined contribution plans that give

employees the opportunity to defer income and taxes into

the future. They are discussed in more detail at the end of

this chapter.

Savings and thrift plans

In small private establishments, savings and thrift plans

enroll the largest number of participants in defined contribution plans. Under these plans, employees may contribute a predetermined portion of earnings (usually pretax) to

an account, all or part of which the employer matches.

Contributions are invested in various vehicles, such as

stocks, bonds, and money market funds, as directed by the

employee or employer, depending upon the provisions of

the plan. Although usually designed as a long-term savings

vehicle, savings and thrift plans may allow participants to

withdraw and to borrow funds from their account. Also,

savings and thrift plans may allow participants to transfer

or “rollover” amounts received from a plan of a former

employer. Such a rollover continues the tax deferral on

Chapter 7. Defined Contribution Plans

29 Data taken from U.S. Department of Labor, Pension and Welfare

Benefits Administration, Private Pension Plan Bulletin, No. 6, Winter

1997. 30 Such withdrawals, while permitted by the plan, may trigger current

income tax liability and tax penalties for the recipient.

33 Information was not collected on stock purchase and stock option plans

in the 1996 EBS. They are considered separate employee benefits rather

than defined contribution plans designed for retirement purposes.
79

money that had been sheltered from taxes before the terminated employee received it (tables 79-84).

Employee contributions. Savings and thrift plans allow

employees to choose from a range of contribution rates. A

plan, for example, might allow employee contributions of

any amount from 5 to 20 percent of pay. Maximum contributions of 15 percent are common.

The ability to make employee contributions on a pretax

basis, known as salary reduction, has, after only a few years,

become a dominant feature of savings and thrift plans.

Nearly all participants in savings and thrift plans are allowed to make pretax contributions.

Provisions governing pretax contributions vary widely.

For example, many participants in plans allowing pretax

contributions are allowed to make only pretax contributions;

some have an option to make either pretax or posttax contributions; and others must make at least some of their contributions on a pretax basis.

The tax status of employee contributions is important

because of the current deferral of income taxes, and also

because an employee may not withdraw pretax contributions from his or her account__except in limited

circumstances__without tax penalties.

Employer-matching contributions. Employers give incentives for participating in a savings and thrift plan by matching all or a portion of the employee’s contribution (adding

the amount of employer contributions to the employee’s

account). Usually the employer matches a portion of the

employee’s contribution up to a specified percent of the

employee’s earnings. For example, an employer may match

half of the employee’s contribution up to the first 6 percent

of earnings. Assuming the employee contributes 8 percent

of earnings, the employer would add 3 percent (half of the

first 6 percent of the employee’s earnings) for a total contribution of 11 percent to the employee’s account. In contrast with these straight percentage matches, some participants receive matching contribution rates varying by length

of service, level of employee contribution, or company profits.32

In some savings and thrift plans, the employer may also

provide discretionary profit-sharing contributions to the

employee’s account.

Investment decisions. Participants in savings and thrift plans

can often choose how they want their own contributions

invested. Investment vehicles offered by these plans include

company stock, common stock funds, guaranteed investment contracts, government securities, money market funds,

and long-term interest bearing securities such as corporate

bonds, and Treasury notes. The number of choices in these

plans varies from 2 to 10 or more. Customarily, employees

are allowed to split their contributions among the various

options__typically in multiples of 10 or 25 percent. For example, a participant may choose to invest 50 percent in

company stock and 50 percent in government securities. In

addition, plans often permit participants to change their

investment choices periodically, or at any time.

Overall, employees have less flexibility in how employer

contributions are invested. When no choice is allowed, plans

typically specify that the matching contribution is invested

in company stock.

Withdrawals and loans. Prior to normal payout at retirement, disability, or termination of employment, many participants in savings and thrift plans are allowed to withdraw all or a portion of employer contributions.

Many participants in plans permitting withdrawal of

employer contributions are only allowed access to funds for

hardship reasons, such as medical or educational expenses.

The remaining participants can withdraw employer contributions for any reason.

Withdrawals of employer contributions may also be subject to a variety of other restrictions. For example, some

participants who are allowed to make withdrawals can only

withdraw part of their employer’s contribution. Additionally, some who can make withdrawals have a penalty imposed if they do so. Common penalties involve suspending

employee contributions, and employer matching contributions, for a given period, such as 6 months or 1 year. Other

penalties include suspending employer matching contributions only, or forfeiting nonvested employer contributions.

Another method of accessing an employee’s account prior

to final payout is a loan. Loans usually have to be repaid

within 5 years, but longer payment periods may apply for

home purchase or renovation loans.

Interest rates on employee loans are typically determined

by a specific economic indicator (such as the prime rate or

U.S. Treasury bill rate), are at the discretion of the plan

sponsor (employer, employer association, or union), or vary

by the reason for the loan. In the last case, loans for the

purchase of a home are often available at lower rates than

other loans.

Distribution. At retirement, savings and thrift plans normally allow for payout in the form of a lump sum. Many

participants can choose from among a lump sum and other

options, such as a lifetime annuity or installments over a

specified period.

Participation requirements. To begin accumulating benefits, savings and thrift plan participants frequently must

complete a minimum amount of service, commonly 1 year.

Vesting. Saving and thrift plans are subject to the same

vesting rules under the Employee Retirement Income

Security Act as defined benefit plans. Vesting schedules

32 For more information on savings and thrift contributions and benefits,

see Michael Bucci, “Contributions to Savings and Thrift Plans,” Monthly

Labor Review, November 1990, pp. 28-36.
80

vary significantly, however, between defined benefit and

savings and thrift plans. Savings and thrift plans often

include immediate full vesting, while such vesting provisions are virtually non-existent in defined benefit plans.

All vesting schedules apply to employer contributions; employee contributions (including pretax contributions) are

always 100-percent vested. Graduated vesting, in which

an employee’s nonforfeitable percentage increases over time

until it reaches 100 percent, commonly after 5 to 7 years,

applies to many participants in savings and thrift plans

Deferred profit-sharing plans

Deferred profit-sharing plans are also a popular defined

contribution plan. Deferred profit-sharing plans are designed to hold money in employee accounts until retirement or another condition stipulated by the plan (for example, disability or death). The employee, however, may

have a choice to receive a portion of the profits in cash,

with the remainder placed in a deferred account.33

Participants in deferred profit-sharing plans may have

employer contributions determined by a specified formula,

such as 4 percent of profits if annual sales were $2 million

to $5 million, and 8 percent if sales exceeded $5 million.

The remaining participants may be in plans in which employers determine their contributions at their own discretion.

Once the employer contribution is determined, the plan

may allocate it to individual participants in a number of

ways. A common method of allocation is as a proportion of

salary. Other allocation methods include formulas based on

earnings and service, participants’ contributions as a percentage of total contributions, and equal allocations to all

participants.

Deferred profit-sharing plans may allow employees to

contribute to their plan as a means of increasing the value

of their account. However, it is not very common for employees to be required to contribute to such plans. Plans

typically give employees only limited opportunities to make

investment choices. Plan participation and vesting requirements tend to be similar to those found in saving and thrift

plans.

Money purchase pension plans

Another type of defined contribution plan, available to a

small percent of full-time employees in small private establishments, is a money purchase pension plan. These plans

accumulate funds through a fixed contribution to accounts

set up for each employee. Under these plans, employer contributions usually are a percent of employee salary, such as

3 percent per year. These contributions, plus earnings, are

available at retirement. In general, employee contributions

are neither required nor allowed, employees do not participate in investment decisions, and accounts may not be

accessed__by either withdrawal or loan__prior to retirement.

These plans are referred to as pension plans because they

often provide a periodic payment to employees at retirement. This is accomplished by using the funds accumulated in each employee’s account to purchase an

annuity__often from an insurance company__that guarantees

a periodic payment for life. Other payment arrangements

may be available, though, including a lump sum or series

of installments.

Stock plans

Two types of stock plans are considered defined contribution plans__stock bonus plans and employee stock ownership plans.34 A stock bonus plan specifies employer or employee and employer contributions to a trust fund that invests

in various securities. Employee stock ownership plans

(ESOP’s), however, are generally wholly employer financed

and must be designed to invest primarily in company stock.

ESOP’s may be used as the means by which employees acquire ownership in their company. Stocks are distributed to

individual employee accounts periodically as loans used to

finance the purchase are repaid. (NOTE: Something seems

to be missing from this sentence.)

Both types of stock plans make benefit distributions in

either company stock or cash. Stock plans are found infrequently among full-time employees in small private establishments.

Simplified employee pension plans

A simplified employee pension plan, or SEP, is an individual retirement arrangement (IRA) under which a retirement account is established by the employer for each eligible employee. Under this “super-IRA” type of

employer-funded pension plan, an employer may make contributions of 15 percent of compensation, up to $30,000,

for each employee, considerably more than the $2,000 limit

on the traditional IRA. Although SEP’s are specifically

designed for small establishments of 25 employees or fewer,

SEP’s are rare because they usually cover only the self-employed, who are excluded from the survey.

Cash or deferred arrangements

Plans with a cash or deferred arrangement, also known as

401(k) plans, allow participants to choose between receiving currently taxable income or deferring taxation by placing the money in a retirement account.35 Cash or deferred

arrangements usually take the form of salary reduction plans

(tables 85 and 86).

Salary reduction plans allow employees to contribute a

part of their earnings to a retirement plan, and defer in33 Profit-sharing plans that pay benefits directly to the participants in cash

are not considered defined contribution plans; they are included as nonproduction bonuses in table 3.

34 Stock purchase plans and stock options are considered separate employee benefits. Currently, they are not being studied. 35 For 401(k) plans with no employer contribution, participants are those

workers actually making pretax contributions. For other plans, participants

are those workers in plans offering cash or deferred arrangements, whether or

not workers actually made pretax contributions.
81

come taxes on those contributions and their earnings until

distribution. Such contributions are referred to as “employee

elective deferrals” or “pretax contributions.”

Salary reduction features, more common among whitecollar than among blue-collar employees, are available

through several types of defined contribution plans. A very

common vehicle for salary reduction is a savings and thrift

plan. The remainder generally make salary reduction contributions through a profit-sharing plan or a freestanding

plan, that is, a plan set up for employee salary reduction

with no employer contribution.

Deferrals of profit-sharing allocations give employees

the choice of receiving an employer’s profit-sharing contribution immediately in cash, or deferring the contribution

and postponing taxation until distribution. Such arrangements are not common.

The growth of 401(k) plans has helped to expand the

defined contribution plan as a savings vehicle for retirement. Unlike some defined contribution plans, such as

money purchase plans, 401(k) plans generally require employee contributions as a condition of participation and then

require the individual employee to decide how much pay to

save. Finally, the participant determines where to invest

the aggregated funds, including matching employer contributions, to enhance retirement income.
82

Table 79. Savings and thrift plans: Maximum employee

contributions,1 full-time employees, small private

establishments, 1996

Maximum employee

contributions

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

savings and thrift plans ....... 9,314 2,585 3,550 3,178

Percent

Total with savings and thrift

plans ................................... 100 100 100 100

Percent of employee

earnings .......................... 86 82 91 83

5 percent or less ............... 2 3 3 2

6 percent ........................... 4 1 4 6

7 percent ........................... 2 () - 2 () -

8 percent ........................... 1 1 1 1

9 percent ........................... 2 ( ) 2 ( ) 2 ( ) 2 ( )

10 percent ......................... 9 7 11 9

11 percent ......................... 2 ( ) 2 ( ) 2 () 1

12 percent ......................... 8 9 8 8

13 percent ......................... 1 2 () 1 2 ( )

14 percent ......................... 1 1 1 1

15 percent ......................... 40 42 39 39

16 percent ......................... 7 6 10 6

17 percent ......................... 2 3 3 1

17.01 - 17.99 percent ....... 2 () 1 2 () -

18 percent ......................... 2 2 2 1

18.01 - 19.99 percent ....... 2 () 1 2 ( ) 2 ( )

20 percent ......................... 5 4 5 6

20.01 - 24.99 percent ....... 2 ( ) 2 () 1 2 ( )

25 percent or more ........... 1 1 1 2 ( )

Specified dollar amount ........ 1 2 () 1 3

Up to the Internal Revenue

Code limit ........................ 11 14 8 12

Not determinable .................. 2 4 1 3

Average3

Average maximum contribution

(percent of earnings) .......... 13.9 14.3 14.0 13.6

1 Includes contributions that are not matched by the employer. If

maximum contributions vary, such as by length of service, the highest

possible contribution was tabulated. 2 Less than 0.5 percent. 3 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 80. Savings and thrift plans: Method of determining

pretax contribution, full-time employees, small private

establishments, 1996

Pretax contributions

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

savings and thrift plans ....... 9,314 2,585 3,550 3,178

Percent

Total with savings and thrift

plans ................................... 100 100 100 100

Pretax contributions allowed 88 86 90 88

All contributions must be

pretax .......................... 41 37 42 43

All contributions may be

pretax .......................... 13 11 16 11

Contributions up to

specified percent may

be pretax ..................... 3 4 4 2

Initial contributions must

be pretax; additional

contributions cannot

be pretax ..................... 1 1 2 1

Initial contributions must

be pretax; all additional

contributions may be

pretax .......................... 1 1 1 1 ( )

Pre-tax allowed, options

unknown ..................... 30 35 25 31

No pretax contributions

allowed ........................... 3 2 2 4

Not determinable .................. 9 12 8 8

1 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
83

Table 81. Savings and thrift plans: Maximum pretax employee

contributions,1 full-time employees, small private

establishments, 1996

Maximum pretax contributions

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

savings and thrift plans that

allow pretax contributions ... 8,220 2,232 3,183 2,805

Percent

Total with savings and thrift

plans that allow pretax

contributions ....................... 100 100 100 100

Percent of employee

earnings2 ........................ 87 83 91 86

Specified dollar amount ........ 1 1 3 () 2

Up to the Internal Revenue

Code limit ........................ 11 16 8 11

Not determinable .................. 1 1 1 1

1 Includes contributions that are not matched by the employer. If

maximum contributions vary, such as by length of service, the highest

possible contribution was tabulated. 2 Includes plans with pretax limits not surveyed. 3 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 82. Savings and thrift plans: Methods of employer

matching contributions, full-time employees, small private

establishments, 1996

Employer matching rates

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

savings and thrift plans ....... 9,314 2,585 3,550 3,178

Percent

Total with savings and thrift

plans ................................... 100 100 100 100

Specified matching percent1 79 80 76 80

Varies by service .................. 2 1 1 3

Varies by amount of

contribution ..................... 7 9 7 6

Varies by investment choice 2 ( ) 2 ( ) 2 () -

Varies by profit level ............. 2 3 3 2

Other ..................................... 7 5 9 5

Not determinable .................. 4 2 4 5

1 Plans where the employer matches a specified percent of employee

contributions. For example, the employer matches 50 percent of employee

earnings up to 6 percent. 2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
84

Table 83. Savings and thrift plans: Employee contributions by

employer specified matching percentage, full-time employees, small

private establishments, 1996

Employee contribution1 Total2

Specified matching percentage

1 - 49 50 51 - 99 100

All employees

Total3 .................................... 100 31 36 3 28

Under 2 percent ................ 1 - 1 - 1

2 percent ........................... 8 1 2 - 6

3 percent ........................... 10 2 2 - 5

4 percent ........................... 19 6 7 4 () 5

5 percent ........................... 10 4 3 4 () 3

6 percent ........................... 38 11 19 3 5

Greater than 6 percent ..... 12 7 2 - 3

Professional, technical, and

related

Total3 .................................... 100 27 38 1 33

Under 2 percent ................ 1 - 1 - 4 ( )

2 percent ........................... 11 - 1 - 10

3 percent ........................... 7 2 1 - 3

4 percent ........................... 21 9 6 - 5

5 percent ........................... 11 6 2 - 3

6 percent ........................... 33 5 23 1 3

Greater than 6 percent ..... 14 5 4 - 5

Clerical and sales

Total3 .................................... 100 30 39 4 25

Under 2 percent ................ 1 - 1 - 4 ( )

2 percent ........................... 8 1 3 - 3

3 percent ........................... 12 2 3 - 7

4 percent ........................... 19 6 7 4 () 5

5 percent ........................... 9 2 3 4 () 3

6 percent ........................... 39 10 22 3 4

Greater than 6 percent ..... 9 7 1 - 1

Blue collar and service

Total3 .................................... 100 36 31 4 29

Under 2 percent ................ 1 - - - 1

2 percent ........................... 7 1 2 - 4

3 percent ........................... 9 2 3 - 4

4 percent ........................... 16 3 9 - 4

5 percent ........................... 104312

6 percent ........................... 43 18 14 4 8

Greater than 6 percent ..... 13 8 1 - 4

1 Employee may contribute a percent of salary up to a specified maximum; ceilings

on contributions to be matched by employers generally are lower. 2 Total includes workers with an employer matching percentage of greater than 100

percent, but those matching percentages are not presented separately. 3 Includes other employee contribution rates not shown separately. 4 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates no employees in this category.
85

Table 84. Savings and thrift plans: Service requirements1,

full-time employees, small private establishments, 1996

Eligibility requirements2

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

savings and thrift plans ....... 9,314 2,585 3,550 3,178

Percent

Total with savings and thrift

plans ................................... 100 100 100 100

With minimum service

requirement .................... 84 79 83 89

3 months or less ................... 16 16 15 18

6 months ............................... 10 11 9 11

1 year .................................... 57 51 58 60

2 years .................................. 3( ) 3( ) 3( ) 3( )

3 years .................................. 3( ) 3( ) 3() -

No minimum service

requirement .................... 11 16 10 7

Not determinable .................. 6 5 8 4

Average4

Average service requirement (in

months) ............................... 9.7 9.1 10.1 9.7

1 In many of these plans, there is also an age requirement. For example,

some plans have participation requirements of age 21 and 12 months of

service. This table’s eligibility requirements are based on when the employee

can first join the plan, not when the employer first begins contributing. In past

surveys the eligibility requirements were based on when the employer first

contributes to the plan. Thus this table is not strictly comparable to the same

table from past surveys. 2 If a plan had alternate eligibility requirements, one of which was service

only, the service only requirement was tabulated. 3 Less than 0.5 percent. 4 The average is presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
86

Table 85. 401(k) salary reduction plans: Maximum pretax

employee contributions,1 full-time employees, small private

establishments, 1996

Maximum pretax contributions

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

401(k) salary reduction

plans ................................... 9,501 2,428 3,757 3,316

Percent

Total with 401(k) pretax salary

reduction plans ................... 100 100 100 100

Percent of employee

earnings2 ........................ 84 82 87 81

Specified dollar amount ........ 1 3 ( ) 3 () 1

Up to the Internal Revenue

Code limit ........................ 15 17 11 17

Not determinable .................. 1 1 1 1

1 Includes contributions that are not matched by the employer. If

maximum contributions vary, such as by length of service, the highest

possible contribution was tabulated. 2 Includes plans with pretax limits not surveyed. 3 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.

Table 86. 401(k) salary reduction plans: Service

requirements,1 full-time employees, small private

establishments, 1996

Eligibility requirements2

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

401(k) salary reduction

plans ................................... 9,501 2,428 3,757 3,316

Percent

Total with 401(k) salary

reduction plans ................... 100 100 100 100

With minimum service

requirement .................... 87 82 86 92

3 months or less ................... 15 15 14 16

6 months ............................... 10 11 9 10

1 year .................................... 61 55 61 65

2 years .................................. 3 ( ) 3 () 1 3 ( )

3 years .................................. 3 ( ) 3 ( ) 3 () -

Over 3 years ......................... 3 () - 3 () 1

No minimum service

requirement .................... 8 15 7 5

Not determinable .................. 5 3 7 4

Average4

Average service requirement (in

months) ............................... 10.1 9.2 10.3 10.5

1 In many of these plans, there is also an age requirement. For example,

some plans have participation requirements of age 21 and 12 months of

service. This table’s eligibility requirements are based on when the employee

can first join the plan, not when the employer first begins contributing. In past

surveys the eligibility requirements were based on when the employer first

contributes to the plan. Thus this table is not strictly comparable to the same

table from past surveys. 2 If a plan had alternate eligibility requirements, one of which was service

only, the service only requirement was tabulated. 3 Less than 0.5 percent. 4 The averages are presented for all covered workers; averages exclude

workers without the plan provision.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates no employees in this category.
87

Employers have traditionally offered their workers benefit

plans in a number of areas, such as medical care, life insurance, and retirement benefits. Employees may have a choice

from among a number of plans in a given benefit area. For

example, an employee may be offered a choice between a

traditional fee-for-service medical plan and a health maintenance organization. In recent years, new approaches to

offering benefits have emerged. BLS currently collects data

on two of these—flexible benefits plans and reimbursement

accounts. Both arrangements are governed by Internal

Revenue Code section 125.

Full-time employees in small private establishments are

seldom offered flexible benefits plans, unlike their counterparts in medium and large private establishments. These

plans, often called cafeteria plans, allow employees to design individual benefit packages by choosing from among

several types of benefits. In a flexible benefits plan, employers provide each worker with an amount of “benefits

credits.” These credits may equal a fixed dollar amount for

each worker, or an amount that varies among workers according to earnings, length of service, size of family, or

other characteristics. The employee then chooses from various benefits and benefit levels, using credits to purchase

the desired benefits. If the credits are not sufficient to pay

for the benefit, employees may have the option to fund the

difference with pretax contributions.

Flexible benefits plans may provide several options, including various levels of life insurance, separate dental

choices, participation in fee-for-service medical plans (with

varying deductibles and out-of-pocket maximums) or in

alternative medical plans (such as health maintenance organizations and preferred provider organizations), varying

levels of accidental death and dismemberment insurance,

and long-term disability insurance coverage. Some employees covered by flexible benefits plans may receive cash

in lieu of benefits or deposit unused credits into reimbursement accounts. Other employees may choose to purchase

short-term disability coverage, deposit credits in a 401(k)

plan, or buy and sell vacation days. Participants are often

required to purchase minimum levels of coverage, such as

basic life insurance.

Reimbursement accounts are somewhat more prevalent

among full-time employees in small private establishments.

These accounts, also called flexible spending accounts, provide funds from which employees pay for expenses not covered by their regular benefits package.

Reimbursement accounts are usually funded solely by

employee pretax contributions, although some accounts may

be partially funded by employers. Reimbursement accounts

may be part of a flexible benefits plan, or they may stand

alone.

The majority of employees eligible for reimbursement

accounts may allocate funds for health care deductibles,

coinsurance costs, and the cost of services not covered by

their medical care plan, such as dental expenses and vision

exams. Eligible employees often may use money from these

accounts to pay for dependent care expenses, generally both

child care and care for elderly or disabled relatives. Reimbursement account funds may also be allocated for the payment of the employees’ share of health care premiums, and

other insurance premiums, such as life insurance or a

spouse’s insurance premiums.

Some accounts, known as premium conversion plans,

are established solely to allow medical plan participants to

pay required plan premiums with pretax dollars. Although

such arrangements differ from the usual reimbursement

accounts, where employees are reimbursed with pretax

money after a payment is made, these arrangements nonetheless meet the Internal Revenue Code requirements for a

section 125 plan.

Nearly all employees participating in flexible benefits

plans or reimbursement accounts are required to contribute

toward the cost of their benefits, or are allowed to contribute to obtain additional benefits. These contributions are

usually deducted from an employee’s salary, which results

in lower income tax liabilities.

Individual benefit plans offered through a flexible benefits plan are analyzed and included in the tabulations for

specific benefit areas in this bulletin.36

Chapter 8. Flexible Benefits

Plans and Reimbursement Accounts

36 For information on flexible benefits plans in medium and large private

establishments, see Joseph R. Meisenheimer and William J. Wiatrowski, “Flexible Benefits Plans: Employees Who Have a Choice,” Monthly Labor

Review, December 1989, pp. 17-23.
88

Table 87. Stand-alone reimbursement accounts: Expenses

covered, full-time employees, small private establishments,

1996

Expenses

All

employees

Professional,

technical,

and

related

employees

Clerical

and

sales

employees

Bluecollar

and

service

employees

Number (in thousands) with

reimbursement account1 .... 4,739 1,445 1,916 1,377

Percent

Total with reimbursement

account ............................... 100 100 100 100

Expenses known .................. 94 97 90 96

Health premiums .............. 69 75 65 69

Other health expenses ..... 78 75 76 84

Dependent care expenses 82 90 82 75

Legal expenses ................ 2 5 1 2 ( )

Other premiums ................ 20 23 20 18

Other ................................. 2 2 2 2

Expense not determinable .... 6 3 10 4

1 Total is less than the sum of individual items because many plans allow

funds to be used for multiple purposes. 2 Less than 0.5 percent.

NOTE: Where applicable, dash indicates no employees in this category.
89

Chapter 9. Benefits by Selected

Characteristics

This chapter presents incidence of employee benefits for

five selected characteristics__small independent businesses,

geographic region, major industry segment, union status,

and part-time employment (tables 92-103).

Full-time employees in small independent businesses

usually receive fewer benefits than comparable employees

in small operating units of larger companies. Small independent businesses, such as local independent hardware or

grocery stores, account for about three-fourths of the total

coverage of the small establishments survey; the balance

includes the small operating units of larger companies.

The four geographic regions, Northeast, South, North

Central, and West,37 show variation in the incidence of employee benefits for full-time employees in small private establishments. For example, the incidence of health care

and retirement benefits was 70 percent and 53 percent, respectively, in the Northeast region, while in the South it

was 62 and 43 percent, respectively. The incidence of health

care and retirement benefits in the North Central and West

were similar to that in the South.

The incidence of medical care and outpatient prescription drug benefits provided to workers in goods-producing

industries38 was slightly higher than that provided to workers in service-producing industries. While life insurance

benefits were offered with the same frequency to workers in

goods- and service-producing industries, long-term disability insurance was provided twice as often to workers in the

service-producing sector. Defined benefit retirement plans

were offered more often to workers in goods-producing industries, while defined contribution plans were slightly more

prevalent in service-producing industries. Service-producing industries accounted for about three-fourths of those

employed full time in small private establishments in

1996.

Data on full-time employees covered by collective bargaining agreements were also collected.39 Because of the

small percentage of workers in these establishments covered by agreements, only non-union data were published.

Finally, incidence of benefits for part-time workers in

small private establishments is available.40 Part-time workers within the scope of the Employee Benefits Survey were

far less likely to be covered by benefit plans than full-time

workers. Part-time workers account for about one-fourth

of the 53.9 million employees in small private establishments.

Small, independent businesses

In 1996, the proportion of full-time employees in small independent businesses, which make up about—73 percent

of the Employee Benefits Survey of Small Private Establishments, who received specific benefits was lower than

that found among full-time employees in all small establishments. For example, retirement benefits were available

to 42 percent of full-time employees in small independent

businesses and to 46 percent of such employees in all small

establishments.

Paid vacations and holidays were the most prevalent

benefits available to full-time employees in small independent businesses in 1996, covering 86 and 80 percent of

workers, respectively. Paid jury-duty leave was provided to

55 percent of workers, paid sick leave, to 48 percent, and

paid funeral leave, to 47 percent. Other paid time-off benefits were less prevalent.

Just over three-fifths of the full-time workers in small

independent businesses participated in medical care plans

in 1996 and nearly 6 out of 10 had life insurance protection. Other insurance coverage was much less prevalent:

dental care and short-term disability benefit plans each cov37 Geographic regions are defined as follows: Northeast—Connecticut,

Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania,

Rhode Island, Vermont; South—Alabama, Arkansas, Delaware, District of

Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi,

North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West

Virginia; North Central—Illinois, Indiana, Iowa, Kansas, Michigan,

Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota,

Wisconsin; West—Alaska, Arizona, California, Colorado, Hawaii, Idaho,

Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming. 38 Goods-producing industries include manufacturing, mining, and construction. Service-producing industries include transportation, communications, electric, gas and sanitary services; wholesale trade; retail trade; finance,

insurance, and real estate; and services. See Appendix A for additional information on survey scope.

39 Occupations are categorized as union or nonunion at the time of data

collection. To be categorized as union, the occupations must meet the following criteria: 1) A labor organization must be recognized as the bargaining

agent for workers in the occupation; 2) wage and salary rates must be determined through collective bargaining or negotiations; and, 3) settlement terms

must be embodied in a signed, mutually-binding collective bargaining agreement. 40 Employees are classified as full-time or part-time in accordance with

the practices of surveyed establishments.
90

ered just over one-fourth of full-time employees in small

independent businesses in 1996, while about one-fifth had

long-term disability insurance protection. Coverage for

these benefits averaged a few percentage points lower than

their incidence in all small private establishments.

Among other benefits studied, the most prevalent available to full-time employees in small independent businesses

was nonproduction bonuses—48 percent of such workers

were eligible for these bonuses. Thirty-four percent of employees in small independent businesses were eligible for

job-related educational assistance and 12 percent were eligible for severance pay. Few of the other items studied were

widespread even among full-time workers in all small establishments. In small, independent businesses, these benefits, for the most part, were even less prominent.

Geographic region

Workers in the Northeast were more likely than workers in

other regions to receive most types of paid leave, including

holidays and vacations. They also tended to have a slight

edge in insurance and retirement coverage; workers in the

South and West had a lower incidence of retirement plans.

The significantly higher incidence of short-term disability

benefits in the Northeast is due to State mandated coverage

in New York and New Jersey (see chapter 3). The incidence

of other benefits, such as childcare, employee assistance

programs, and reimbursement accounts did not vary in any

pattern among geographic regions.

Industry

The incidence of all paid leave benefits provided to fulltime workers in service-producing industries was higher

than in goods-producing industries. Workers in serviceproducing industries were significantly more likely to receive unpaid family leave.

Workers in goods-producing industries were more likely

to be covered by medical care and prescription drug plans.

More than twice the proportion of workers in serviceproducing industries as in goods-producing industries had

long-term disability insurance. Incidence among other benefits was higher for workers in service-producing industries, with the exception of nonproduction bonuses, which

were more commonly provided to workers in goodsproducing industries.

Part-time employees

Few part-time workers within the scope of this survey received benefits usually provided to full-time workers, such

as medical care, life insurance, or private retirement plans.

Full-time employees in small private establishments were

about 10 times as likely as part-time employees to have

medical care and nearly 9 times as likely to receive life

insurance. Full-time employees were more than three times

as likely as part-time employees to be covered by retirement plans, and more than twice as likely to have shortterm disability protection. Although retirement plans were

available to more than 1 out of 7 part-time employees, life

insurance, medical care, dental care, and long-term disability insurance were available to less than one-tenth of

part-time workers.

Because of both the limited sample size and incidence of

benefits among part-time workers, plan provisions could not

be examined to the same extent as for full-time workers.

Paid time-off was the most prevalent type of benefit program available to the part-time workforce. Almost onethird of all part-time employees were eligible for paid vacations, and about one-fourth had paid holidays and paid jury

duty leave. Other types of leave were less common. Onetenth of part-time employees was eligible for paid sick leave.

Paid time-off was commonly prorated based on the work

schedule of the part-time employee. For example, an employee working 4 hours per day would receive 4 hours of

pay for each vacation day granted.

The incidence of other benefits offered to part-time employees, such nonproduction bonus and job-related education assistance, was also lower than for full-time workers.
91

Table 88. Summary: Participation1 in selected employee benefit programs,

full-time employees, small independent businesses, 1996

(In percent)

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Paid time off:

Holidays .......................................... 80 89 91 70

Vacations ........................................ 86 92 95 78

Personal leave ................................ 13 21 18 8

Funeral leave .................................. 47 60 55 38

Jury duty leave ............................... 55 74 64 42

Military leave ................................... 13 22 16 7

Family leave ................................... 2 3 3 1

Unpaid family leave .......................... 39 47 41 35

Disability benefits2:

Paid sick leave ................................ 48 66 62 33

Short-term disability ........................ 27 32 28 24

Long-term disability insurance ........ 18 36 25 7

Survivor benefits:

Life insurance ................................. 57 70 63 49

Accidental death and

dismemberment ............................ 46 57 51 39

Survivor income benefits ................ 3 ( ) 3 ( ) 3 ( ) 3 ( )

Health care benefits:

Medical care ................................... 62 76 67 54

Dental care ..................................... 27 37 30 22

Vision care ...................................... 10 12 8 10

Outpatient prescription drug

coverage ....................................... 55 68 59 48

See footnotes at end of table.
92

Table 88. Summary: Participation1 in selected employee benefit programs,

full-time employees, small independent businesses, 1996

(In percent) — Continued

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Retirement income benefits:

All retirement4 ................................. 42 54 48 34

Defined benefit ........................... 10 9 11 11

Defined contribution5 .................. 35 49 42 26

Savings and thrift .................... 19 28 22 13

Deferred profit sharing ............ 12 14 17 9

Employee stock ownership ..... 3 ( ) 3 () 1 3 ( )

Money purchase pension ....... 4 6 4 4

Simplified employee pension .. 1 3 1 1

Other ....................................... 3 () 1 3 ( ) 3 ( )

Type not avaliable .................. - - - -

Cash or deferred arrangements:

With employer contributions ....... 20 27 25 14

Salary reduction ...................... 20 27 24 14

Savings and thrift6 .............. 17 25 20 12

Deferred profit sharing ........ 2 1 3 2

Deferral of profit sharing

allocation .............................. 3 () - 1 3 ( )

No employer contributions .......... 4 8 4 2

1 Participants are workers covered by a paid time off, insurance, or retirement plan. Employees

subject to a minimum service requirement before they are eligible for benefit coverage are counted

as participants even if they have not met the requirement at the time of the survey. If employees are

required to pay part of the cost of a benefit, only those who elect the coverage and pay their share

are counted as participants. Except for family leave, benefits for which the employees must pay the

full premium are outside the scope of the survey. Only current employees are counted as

participants; retirees are excluded. 2 The definitions for paid sick leave and short-term disability (previously sickness and accident

insurance) were changed for the 1996 survey. Paid sick leave now only includes plans that either

specify a maximum number of days per year or unlimited days. Short-term disability now includes

all insured, self-insured, and state-mandated plans available on a per disability basis as well as the

unfunded per disability plans previously reported as sick leave. Sickness and accident insurance,

reported in years prior to this survey, only included insured, self-insured, and state-mandated plans

providing per disability benefits at less than full pay. 3 Less than 0.5 percent. 4 Includes defined benefit pension plans and defined contribution retirement plans. The total is

less than the sum of the individual items because many employees participated in both types of

plans. 5 The total is less than the sum of the individual items because some employees participated in

more than one type of plan. 6 Participants in savings and thrift plans usually are allowed to make pretax contributions. In the

1996 survey, provisions governing pretax contributions were not determinable for about one-tenth of

the employees with savings and thrift plans.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash

indicates that no data were reported.
93

Table 89. Other benefits: Eligibility for specified benefits, full-time

employees, small independent businesses, 1996

(In percent)

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Income continuation plans:

Severance pay ...................... 12 20 15 7

Supplemental unemployment

benefits ............................... 1 () - 1 ( ) 1 ( )

Family benefits:

Employer assistance for child

care ..................................... 1 3 1 1 ( )

Employer provided funds .. 1 1 1 1 ( )

On-site child care .............. 1 2 1 ( ) 1 ( )

Off-site child care .............. 1 2 1 ( ) 1 ( )

Adoption assistance ............. 1 2 1 ( ) 1 ( )

Long-term care insurance ..... 1 2 1 1 ( )

Flexible workplace ................ 1 4 1 1 ( )

Health promotion programs:

Wellness programs ............... 5 9 5 4

Employee assistance

programs ............................ 9 13 10 6

Fitness center ....................... 4 5 5 3

Miscellaneous benefits:

Job-related travel accident

insurance ............................ 7 11 10 4

Nonproduction bonuses ........ 48 48 51 45

Subsidized commuting ......... 1 3 2 1 ( )

Education assistance:

Job-related ........................ 34 54 40 23

Not job-related .................. 3 5 4 2

Section 125 cafeteria benefits2: 16 25 19 10

Flexible benefit plans ............ 2 4 3 1

Reimbursement plans ........... 8 14 11 4

Premium conversion plans ... 5 7 5 5

1 Less than 0.5 percent. 2 Includes all types of plans under Internal Revenue Code Section 125. Flexible benefits

plans include reimbursement account features.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates that no data were reported.
94

Table 90. Summary: Participation1 in selected employee benefit programs,

full-time employees, by geographic region, small private establishments, 1996

(in percent)

Benefit Northeast South North

Central West

Paid time off:

Holidays .......................................... 90 81 79 73

Vacations ........................................ 90 88 87 81

Personal leave ................................ 26 9 15 10

Funeral leave .................................. 67 51 54 34

Jury duty leave ............................... 79 61 61 37

Military leave ................................... 22 20 18 10

Family leave ................................... 3 1 3 1

Unpaid family leave .......................... 61 43 46 45

Disability benefits2:

Paid sick leave .............................. 63 48 47 46

Short-term disability ...................... 64 19 29 14

Long-term disability insurance ...... 24 22 23 19

Survivor benefits:

Life insurance ............................. 63 62 68 54

Accidental death and

dismemberment ........................ 51 52 52 38

Survivor income benefits ............ 3 ( ) 3 () 1 3 ( )

Health care benefits:

Medical care ............................... 70 62 65 62

Dental care ................................. 36 25 27 39

Vision care .................................. 19 7 8 18

Outpatient prescription drug

coverage ................................... 63 54 59 52

See footnotes at end of table.
95

Table 90. Summary: Participation1 in selected employee benefit programs,

full-time employees, by geographic region, small private establishments, 1996

(in percent) — Continued

Benefit Northeast South North

Central West

Retirement income benefits:

All retirement4 ................................. 53 43 47 43

Defined benefit ........................... 21 12 14 14

Defined contribution5 .................. 42 37 39 35

Savings and thrift .................... 23 24 23 23

Deferred profit sharing ............ 14 10 13 13

Employee stock ownership ..... 1 2 1 1

Money purchase pension ....... 7 3 5 2

Simplified employee pension .. 3 () 1 2 1

Other ....................................... 1 3 ( ) 3 () -

Type not avaliable .................. - - - -

Cash or deferred arrangements:

With employer contributions ....... 25 24 24 23

Salary reduction ...................... 25 24 24 23

Savings and thrift6 .............. 22 21 20 20

Deferred profit sharing ........ 2 3 2 2

Deferral of profit sharing

allocation .............................. 1 3 () - 3 ( )

No employer contributions .......... 4 4 6 3

1 Participants are workers covered by a paid time off, insurance, or retirement plan. Employees

subject to a minimum service requirement before they are eligible for benefit coverage are counted

as participants even if they have not met the requirement at the time of the survey. If employees are

required to pay part of the cost of a benefit, only those who elect the coverage and pay their share

are counted as participants. Except for family leave, benefits for which the employee must pay the

full premium are outside the scope of the survey. Only current employees are counted as

participants; retirees are excluded. 2 The definitions for paid sick leave and short-term disability (previously sickness and accident

insurance) were changed for the 1996 survey. Paid sick leave now only includes plans that either

specify a maximum number of days per year or unlimited days. Short-term disability now includes

all insured, self-insured, and state-mandated plans available on a per disability basis as well as the

unfunded per disability plans previously reported as sick leave. Sickness and accident insurance,

reported in years prior to this survey, only included insured, self-insured, and state-mandated plans

providing per disability benefits at less than full pay. 3 Less than 0.5 percent. 4 Includes defined benefit pension plans and defined contribution retirement plans. The total is

less than the sum of the individual items because many employees participated in both types of

plans. 5 The total is less than the sum of the individual items because some employees participated in

more than one type of plan. 6 Participants in savings and thrift plans usually are allowed to make pretax contributions. In the

1996 survey, provisions governing pretax contributions were not determinable for about one-tenth of

the employees with savings and thrift plans.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash

indicates that no data were reported.
96

Table 91. Other benefits: Eligibility for specified benefits, full-time

employees, by geographic region, small private establishments, 1996

(In percent)

Benefit Northeast South North

Central West

Income continuation plans:

Severance pay ...................... 19 16 11 13

Supplemental unemployment

benefits ............................... 1 - 1 ( ) 1 ( )

Family benefits:

Employer assistance for child

care ..................................... 1 2 2 2

Employer provided funds .. 1 1 1 2

On-site child care .............. 1 ( ) 1 () 1 1 ( )

Off-site child care .............. 1 () 1 1 1

Adoption assistance ............. 1 1 2 1

Long-term care insurance ..... 1 1 2 1

Flexible workplace ................ 2 1 2 1 ( )

Health promotion programs:

Wellness programs ............... 7 8 10 6

Employee assistance

programs ............................ 17 14 12 15

Fitness center ....................... 4 4 4 5

Miscellaneous benefits:

Job-related travel accident

insurance ............................ 12 12 14 10

Nonproduction bonuses ........ 47 45 47 38

Subsidized commuting ......... 2 1 1 () 3

Education assistance:

Job-related ........................ 34 39 44 34

Not job-related .................. 5 7 5 2

Section 125 cafeteria benefits2: 20 27 24 18

Flexible benefit plans ............ 2 4 5 6

Reimbursement plans ........... 9 13 14 11

Premium conversion plans ... 9 11 5 1

1 Less than 0.5 percent. 2 Includes all types of plans under Internal Revenue Code Section 125. Flexible benefits

plans include reimbursement account features.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates that no data were reported.
97

Table 92. Summary: Participation1 in selected employee

benefit programs, full-time employees in goods-producing

and service-producing industries, small private

establishments, 1996

(In percent)

Benefit

Goodsproducing

industries

Serviceproducing

industries

Paid time off:

Holidays .......................................... 78 81

Vacations ........................................ 80 89

Personal leave ................................ 12 15

Funeral leave .................................. 42 54

Jury duty leave ............................... 49 63

Military leave ................................... 13 19

Family leave ................................... 1 2

Unpaid family leave .......................... 40 50

Disability benefits2:

Paid sick leave .............................. 32 56

Short-term disability ...................... 31 28

Long-term disability insurance ...... 12 25

Survivor benefits:

Life insurance ............................. 62 62

Accidental death and

dismemberment ........................ 49 49

Survivor income benefits ............ 1 1

Health care benefits:

Medical care ............................... 67 63

Dental care ................................. 29 31

Vision care .................................. 13 12

Outpatient prescription drug

coverage ................................... 63 55

See footnotes at end of table.

Table 92. Summary: Participation1 in selected employee

benefit programs, full-time employees in goods-producing

and service-producing industries, small private

establishments, 1996

(In percent) — Continued

Benefit

Goodsproducing

industries

Serviceproducing

industries

Retirement income benefits:

All retirement3 ................................. 48 45

Defined benefit ........................... 20 13

Defined contribution4 .................. 36 39

Savings and thrift .................... 20 25

Deferred profit sharing ............ 12 12

Employee stock ownership ..... 1 1

Money purchase pension ....... 5 3

Stock bonus ............................ - 5 ( )

Simplified employee pension .. 1 1

Other ....................................... 5 ( ) 5 ( )

Type not avaliable .................. - -

Cash or deferred arrangements:

With employer contributions ....... 19 26

Salary reduction ...................... 19 25

Savings and thrift6 .............. 18 22

Deferred profit sharing ........ 1 3

Other ................................... 1 1

Deferral of profit sharing

allocation .............................. - 5 ( )

No employer contributions .......... 3 4

1 Participants are workers covered by a paid time off, insurance, or

retirement plan. Employees subject to a minimum service requirement

before they are eligible for benefit coverage are counted as participants

even if they have not met the requirement at the time of the survey. If

employees are required to pay part of the cost of a benefit, only those

who elect the coverage and pay their share are counted as participants.

 Except for family leave, benefits for which the employee must pay the

full premium are outside the scope of the survey. Only current

employees are counted as participants; retirees are excluded. 2 The definitions for paid sick leave and short-term disability

(previously sickness and accident insurance) were changed for the

1996 survey. Paid sick leave now only includes plans that either

specify a maximum number of days per year or unlimited days. 

Short-term disability now includes all insured, self-insured, and

state-mandated plans available on a per disability basis as well as the

unfunded per disability plans previously reported as sick leave. 

Sickness and accident insurance, reported in years prior to this survey,

only included insured, self-insured, and state-mandated plans providing

per disability benefits at less than full pay. 3 Includes defined benefit pension plans and defined contribution

retirement plans. The total is less than the sum of the individual items

because many employees participated in both types of plans. 4 The total is less than the sum of the individual items because

some employees participated in more than one type of plan. 5 Less than 0.5 percent. 6 Participants in savings and thrift plans usually are allowed to

make pretax contributions. In the 1996 survey, provisions governing

pretax contributions were not determinable for about one-tenth of the

employees with savings and thrift plans.

NOTE: Because of rounding, sums of individual items may not equal

totals. Where applicable, dash indicates that no data were reported.
98

Table 93. Other benefits: Eligibility for specified benefits, full-time

employees in goods-producing and service-producing industries,

small private establishments, 1996

(In percent)

Benefit

Goodsproducing

industries

Serviceproducing

industries

Income continuation plans:

Severance pay .......................... 10 16

Supplemental unemployment

benefits ................................... 1 1 ( )

Family benefits:

Employer assistance for child

care ......................................... 1 () 2

Employer provided funds ...... 1 () 1

On-site child care .................. - 1

Off-site child care .................. 1 () 1

Adoption assistance ................. 1 2

Long-term care insurance ......... 1 2

Flexible workplace .................... 1 () 2

Health promotion programs:

Wellness programs ................... 6 8

Employee assistance programs 10 16

Fitness center ........................... 3 4

Miscellaneous benefits:

Job-related travel accident

insurance ................................ 8 14

Nonproduction bonuses ............ 51 42

Subsidized commuting ............. 1 1

Education assistance:

Job-related ............................ 29 41

Not job-related ...................... 3 6

Section 125 cafeteria benefits2: .... 16 25

Flexible benefit plans ................ 1 5

Reimbursement plans ............... 6 14

Premium conversion plans ....... 9 6

1 Less than 0.5 percent. 2 Includes all types of plans under Internal Revenue Code Section 125. 

Flexible benefits plans include reimbursement account features.

NOTE: Because of rounding, sums of individual items may not equal totals. 

Where applicable, dash indicates that no data were reported.
99

Table 94. Summary: Participation1 in selected employee benefit programs,

nonunion2 full-time employees, small private establishments, 1996

(In percent)

Benefit

Nonunion employees

All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Paid time off:

Holidays .......................................... 81 86 91 72

Vacations ........................................ 87 90 95 80

Personal leave ................................ 14 21 18 8

Funeral leave .................................. 51 60 60 41

Jury duty leave ............................... 59 74 68 46

Military leave ................................... 18 25 22 12

Family leave ................................... 2 2 3 1

Unpaid family leave .......................... 47 52 51 41

Disability benefits3:

Paid sick leave .............................. 51 66 64 35

Short-term disability ...................... 26 32 33 19

Long-term disability insurance ...... 23 39 31 10

Survivor benefits:

Life insurance ............................. 60 72 67 49

Accidental death and

dismemberment ........................ 48 59 53 39

Survivor income benefits ............ 1 4 () 1 1

Health care benefits:

Medical care ............................... 62 76 69 52

Dental care ................................. 28 39 34 19

Vision care .................................. 9 13 10 6

Outpatient prescription drug

coverage ................................... 55 67 60 46

See footnotes at end of table.
100

Table 95. Other benefits: Eligibility for specified benefits, nonunion1

full-time employees, small private establishments, 1996

(In percent)

Benefit

Nonunion employees

All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Income continuation plans:

Severance pay ...................... 14 22 19 8

Supplemental unemployment

benefits ............................... - - - -

Family benefits:

Employer assistance for child

care ..................................... 2 4 2 2 ( )

Employer provided funds .. 1 2 2 2 ( )

On-site child care .............. 1 2 2 ( ) 2 ( )

Off-site child care .............. 1 2 2 ( ) 2 ( )

Adoption assistance ............. 1 3 1 1

Long-term care insurance ..... 1 2 2 1

Flexible workplace ................ 1 4 1 2 ( )

Health promotion programs:

Wellness programs ............... 7 11 9 5

Employee assistance

programs ............................ 14 18 19 8

Fitness center ....................... 4 6 5 2

Miscellaneous benefits:

Job-related travel accident

insurance ............................ 12 17 16 7

Nonproduction bonuses ........ 45 45 46 45

Subsidized commuting ......... 1 3 2 2 ( )

Education assistance:

Job-related ........................ 38 56 45 26

Not job-related .................. 5 6 6 4

Section 125 cafeteria benefits3: 24 31 29 17

Flexible benefit plans ............ 4 6 7 2

Reimbursement plans ........... 12 18 16 7

Premium conversion plans ... 7 7 7 7

1 Data were insufficient to show data for union employees separately. 2 Less than 0.5 percent. 3 Includes all types of plans under Internal Revenue Code Section 125. Flexible benefits

plans include reimbursement account features.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates that no data were reported.
101

Table 96. Summary: Participation1 in selected employee benefit programs,

part-time employees, small private establishments, 1996

(In percent)

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Paid time off:

Holidays .......................................... 24 26 31 19

Vacations ........................................ 30 24 35 28

Personal leave ................................ 5 17 7 2

Funeral leave .................................. 16 26 24 10

Jury duty leave ............................... 23 30 29 18

Military leave ................................... 5 11 6 5

Family leave ................................... 1 1 2 2 ( )

Unpaid family leave .......................... 25 15 35 20

Disability benefits3:

Paid sick leave .............................. 10 26 12 6

Short-term disability ...................... 13 11 14 13

Long-term disability insurance ...... 2 7 2 1

Survivor benefits:

Life insurance ............................. 7 8 11 5

Accidental death and

dismemberment ........................ 4 4 6 3

Survivor income benefits ............ 2 () - 2 () -

Health care benefits:

Medical care ............................... 6 14 9 3

Dental care ................................. 4 5 7 2

Vision care .................................. 2 2 4 2

Outpatient prescription drug

coverage ................................... 5 14 7 3

See footnotes at end of table.
102

Table 96. Summary: Participation1 in selected employee benefit programs,

part-time employees, small private establishments, 1996

(In percent) — Continued

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Retirement income benefits:

All retirement4 ................................. 13 22 24 6

Defined benefit ........................... 4 4 6 2

Defined contribution5 .................. 10 18 19 4

Savings and thrift .................... 4 4 7 1

Deferred profit sharing ............ 5 6 11 1

Employee stock ownership ..... 2 () - 1 2 ( )

Money purchase pension ....... 2 5 1 2

Simplified employee pension .. 1 2 2 2 ( )

Other ....................................... - - - -

Type not avaliable .................. - - - -

Cash or deferred arrangements:

With employer contributions ....... 5 10 8 3

Salary reduction ...................... 5 10 8 3

Savings and thrift6 .............. 3 3 6 1

Deferred profit sharing ........ 1 4 1 1

Deferral of profit sharing

allocation .............................. - - - -

No employer contributions .......... 2 4 3 2 ( )

1 Participants are workers covered by a paid time off, insurance, or retirement plan. Employees

subject to a minimum service requirement before they are eligible for benefit coverage are counted

as participants even if they have not met the requirement at the time of the survey. If employees are

required to pay part of the cost of a benefit, only those who elect the coverage and pay their share

are counted as participants. Except for family leave, benefits for which the employees must pay the

full premium are outside the scope of the survey. Only current employees are counted as

participants; retirees are excluded. 2 Less than 0.5 percent. 3 The definitions for paid sick leave and short-term disability (previously sickness and accident

insurance) were changed for the 1996 survey. Paid sick leave now only includes plans that either

specify a maximum number of days per year or unlimited days. Short-term disability now includes

all insured, self-insured, and state-mandated plans available on a per disability basis as well as the

unfunded per disability plans previously reported as sick leave. Sickness and accident insurance,

reported in years prior to this survey, only included insured, self-insured, and state-mandated plans

providing per disability benefits at less than full pay. 4 Includes defined benefit pension plans and defined contribution retirement plans. The total is

less than the sum of the individual items because many employees participated in both types of

plans. 5 The total is less than the sum of the individual items because some employees participated in

more than one type of plan. 6 Participants in savings and thrift plans usually are allowed to make pretax contributions. In the

1996 survey, provisions governing pretax contributions were not determinable for about one-tenth of

the employees with savings and thrift plans.

NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash

indicates that no data were reported.
103

Table 97. Other benefits: Eligibility for specified benefits, part-time

employees, small private establishments, 1996

(In percent)

Benefit All

employees

Professional,

technical,

and related

employees

Clerical

and sales

employees

Blue-collar

and

service

employees

Income continuation plans:

Severance pay ...................... 2 2 5 1

Supplemental unemployment

benefits ............................... 1 () - 1 1 ( )

Family benefits:

Employer assistance for child

care ..................................... 2 8 1 1

Employer provided funds .. 1 7 1 1 ( )

On-site child care .............. 1 6 1 1

Off-site child care .............. 1 3 1 1 ( )

Adoption assistance ............. 1 ( ) 1 () 1 1 ( )

Long-term care insurance ..... 1 ( ) 1 () 1 1 ( )

Flexible workplace ................ 1 7 1 -

Health promotion programs:

Wellness programs ............... 6 17 8 3

Employee assistance

programs ............................ 9 18 11 6

Fitness center ....................... 3 13 2 2

Miscellaneous benefits:

Job-related travel accident

insurance ............................ 4 5 8 2

Nonproduction bonuses ........ 26 26 31 22

Subsidized commuting ......... 1 () 1 1 () -

Education assistance:

Job-related ........................ 13 30 17 8

Not job-related .................. 2 5 2 1

Section 125 cafeteria benefits2:4 9 5 3

Flexible benefit plans ............ 1 2 1 () 1

Reimbursement plans ........... 3 7 2 2

Premium conversion plans ... 1 1 () 2 1

1 Less than 0.5 percent. 2 Includes all types of plans under Internal Revenue Code Section 125. Flexible benefits

plans include reimbursement account features.

NOTE: Because of rounding, sums of individual items may not equal totals. Where

applicable, dash indicates that no data were reported.
104

Scope of survey

The Employee Benefits Survey (EBS)__the Bureau of Labor

Statistics (BLS) survey of the incidence and characteristics

of employee benefit plans__is conducted jointly with the

Bureau’s Employment Cost Index (ECI). The portion of

the sample from which these EBS estimates are made covers all private-sector establishments1

 in the United States

employing fewer than 100 workers at the time of sample

selection.2 All private-sector industries are covered in the

survey with the exception of farms and private households.

The industrial and establishment size coverage of the

survey varies on a rotating basis. All surveys cover fulltime and part-time workers in all 50 States and the District

of Columbia. In even-numbered years, EBS data are collected for small private establishments (those employing

fewer than 100 workers) and State and local governments

of all sizes. In odd-numbered years, data are collected for

medium and large private establishments (those employing

100 workers or more).

The industrial coverage, establishment size coverage, and

geographic coverage for the survey were different prior to 1990.

The surveys done from 1979 to 1986 covered only medium

and large private establishments and excluded most of the

service industries. Establishments that employed at least 50,

100, or 250 workers, depending on the industry, were included.

The survey conducted in 1987 consisted of State and local

governments with 50 or more employees. The surveys carried

out in 1988 and 1989 included all private-sector establishments that employed 100 or more employees. All surveys conducted from 1979 to 1989 excluded part-time employees and

establishments in Alaska and Hawaii.

Data in Appendix B indicate the estimated number of

full- and part-time employees within the scope of the survey, the number of responding sample establishments, and

the number of sampled (and responding) occupational

quotes3

 within those establishments that are actually studied for each major industry division.

Occupational groups

Each of the narrowly defined occupations selected for study

is classified into one of the following three broad occupational groups:

Professional, technical, and related. Includes professional,

technical, executive, administrative, managerial, and related

occupations.

Clerical and sales. Includes clerical, administrative support, and sales occupations.

Blue-collar and service. Includes precision production, craft,

and repair occupations; machine operators and inspectors;

transportation and moving occupations; handlers, equipment cleaners, helpers, and laborers; and service occupations.

Excluded from the survey are self-employed persons,

proprietors, major stockholders, members of a corporate

board who are not otherwise officers of the corporation,

volunteers, unpaid workers, family members who are paid

token wages, the permanently disabled, partners in unincorporated firms, and U.S. citizens working overseas.

Benefit areas

BLS requests that sampled establishments provide data for

a sample of their occupations on work schedules and details of plans in each of the following benefit areas: Paid

holidays, paid vacations, paid personal leave, paid funeral

leave, paid military leave, paid jury-duty leave, paid and

unpaid family leave, paid sick leave, short-term disability

benefits, long-term disability insurance, medical care, dental care, vision care, life insurance, defined benefit pension

plans, defined contribution plans, flexible benefit plans, and

reimbursement accounts.

Data are also collected on the incidence of the following

additional benefits: Severance pay, supplemental unemployment benefits, travel accident insurance, nonproduction cash bonuses, child care, adoption assistance, longterm care insurance, flexible workplace, wellness programs,

fitness centers, job-related and non-job-related educational

assistance, employee assistance programs, and subsidized

commuting.

Appendix A: Technical Note

1 BLS defines an establishment as an economic unit that produces goods

or services (such as a factory or a store) at a single location. An establishment

is not necessarily a firm; it may be a branch plant, for example, or a warehouse. 2

 The establishments included in this survey had to be determined in advance of the actual collection because BLS only surveyed the smaller establishments. BLS classified establishments by size as of the reference date of

the sampling frame. All establishments of fewer than 100 employees that

were sampled are included in the survey, even if they employed more workers

at the time of data collection. 3

 Data are collected individually for narrowly defined occupations that

are sampled within establishments. All of the employees in the detailed occupation selected may not be surveyed. Data for a group (manageable number)

of employees in the detailed occupation that included the selected employee

position are collected. This group is called a quote.
105

Sample design

The State Unemployment Insurance (UI) reports for the 50

States and the District of Columbia comprise the list of establishments from which the sample is selected (called the

sampling frame). The sample design for this survey and

the Employment Cost Index (ECI) is a 2-stage probability

sample of detailed occupations. The first stage of sample

selection is a probability sample of establishments; the second stage is a probability sample of occupations within those

establishments.

The sample of establishments is a subset of the ECI

sample that covers establishments having fewer than 100

employees at the time of selection. The ECI sample is updated over a 4-year cycle. Each year, new sample establishments are introduced into the survey in selected industries,

replacing previously selected sample units in those same

industries. Using this procedure, the entire sample is replaced approximately every 4 years.

To ensure that the sample is representative of all establishments that began business after the various industry

samples were selected, a sample of “births” (newly opened

establishments) is added to the existing sample each year.

The sample of establishments is selected by first stratifying the sampling frame by industry group, and then by

region and establishment employment. The industry groups

usually consist of 3-digit Standard Industrial Classification

groups, as defined by the Office of Management and Budget.

The number of sample establishments allocated to each

stratum (defined by industry) reflects the ratio of employment in the stratum to employment in all sampling frame

establishments. Thus, a stratum that contains 1 percent of

the total employment within the scope of the survey receives

approximately 1 percent of the total sample establishments.

Some industries are sampled at a higher rate than other

industries because of publication requirements or highly

variable data.

Each sampled establishment within an industry group

(stratum) has a probability of selection proportional to its

employment. For example, consider two establishments, A

and B, with respective employment of 5,000 and 1,000.

Establishment A is five times more likely to be selected

than establishment B.

At the beginning of each visit by a Bureau field economist to a sampled establishment, a second-stage probability sample of occupations is selected from the establishment. Data are then collected for these sampled occupations.

The number of occupations selected from an establishment

is four or six, depending on the employment size of the

establishment. The probability of an occupation being selected is proportional to its employment size within the establishment.

The narrowly defined occupations are based on the

Standard Occupational Classification (SOC) system compiled by the Department of Commerce. These narrowly defined occupations are then classified into the three occupational groups shown in this bulletin.

Data collection

Bureau field economists visit or contact sampled establishments by telephone to collect data for the survey. To reduce

the reporting burden, respondents are asked to provide documents describing their flexible benefits plans; reimbursement accounts; defined benefit pensions; defined contribution plans; medical, dental, and vision care plans; and

insurance plans. BLS analyzes these plans in Washington

to garner the required data on plan provisions. When these

booklets were unavailable, a few questions about specific

benefit provisions were asked directly of the employer. Data

on paid leave benefits generally are obtained directly from

the employer at the time of the visit.

Data calculation

Tabulations in this bulletin show the percent of all employees who receive specified benefits, such as paid holidays or

medical care, as well as information on the provisions of

many of these benefits. To present provision data, tabulations generally indicate the percent of all employees receiving a benefit (participants) who are covered by specified

features. For example, a tabulation may show the percent

of workers with medical care benefits who are covered by a

health maintenance organization.

The majority of tables in the bulletin indicate the percent of employees covered by a particular benefit plan or

provision. In addition, average benefit provisions__such as

the average number of paid holidays per year__are presented.

In some cases, tabulations indicate both the percent of employees with a given provision and the average value of

that provision. For example, EBS tabulations indicate the

percent of employees in fee-for-service medical care plans

who must pay selected deductibles (such as $100, $150,

and $200 per year), as well as the average deductible. (All

tabulations of averages include only those employees actually covered by the provision being averaged.)

Most tables in this bulletin also include the number of

employees receiving the benefit. This provides the reader

with additional information on the prevalence of various

benefit plans and provisions.

Survey estimation methods

The survey design uses an estimator that assigns the inverse of each sample unit’s probability of selection as a

weight to the unit’s data at each of the two stages of sample

selection. Three weight-adjustment factors are applied to

the establishment data. The first factor is introduced to account for establishment non-response, a second factor for

occupational non-response, and a third poststratification

factor is introduced to adjust the estimated employment totals to actual counts of the employment by industry for the

survey reference date.
106

The general form of the estimator for a population total

Y is:

where,

n’ = number of responding sample establishments;

oi = occupation sample size selected from the ith establishment;

Yij = value for the characteristics of the jth selected occupation in the ith selected establishment;

Pi = the probability of including the ith establishment

in the sample;

Pij = the probability of including the jth occupation in the

sample of occupations from the ith establishment;

f1i = weight adjustment factor for nonresponse for the

i

th establishment;

f

ij = weight adjustment factor for nonresponse for the

j

th occupation in the ith establishment;

f2i = weight adjustment factor for poststratification totals for the ith establishment.

Appropriate employment or establishment totals are used

to calculate the proportion, mean, or percentage that is desired.

Reliability of estimates

The statistics in this bulletin are estimates derived from a

sample of usable occupation quotes selected from the responding establishments. They are not tabulations based

on data from all employees in small establishments within

scope of the survey. Consequently, the data are subject to

sampling and nonsampling errors.

Sampling errors are the differences that can arise between results derived from a sample and those computed

from observations of all units in the population being studied. When probability techniques are used to select a sample,

as in the Employee Benefits Survey, statistical measures

called “standard errors” can be calculated to measure possible sampling errors. No estimates of sample error were

calculated for this survey.

Nonsampling errors also affect survey results. They can

be attributed to many sources: Inability to obtain information about all establishments in the sample; definitional difficulties; differences in the interpretation of questions; inability or unwillingness of respondents to provide correct

information; mistakes in recording or coding the data; and

other errors of collection, response, processing, coverage,

and estimation for missing data.

Computer edits of the data and professional review of

both individual and summarized data reduce the

nonsampling errors in recording, coding, and processing

the data. However, to the extent that the characteristics of

nonrespondents are not the same as those of respondents,

nonsampling errors are introduced in the development of

estimates. Because the influence of these limitations on the

EBS estimates is unknown, reliability measurements are

incomplete.

Y f f

P

Y f

P

i i

i

ij ij

j ij

o

i

n i

= = =

∑ ∑ 2 1

1 1

 

'
107

Information on 1996 survey response

Data for the 1996 Employee Benefits Survey were collected

from November 1995 to October 1996, reflecting an average reference period of June 1996. A sample of 4,482 establishments was chosen from Unemployment Insurance

reports with reference dates from 1986 to 1995; also included was the “birth” sample, which represents establishments beginning operations through 1995. (A description

of sampling procedures appears in appendix A.) Respondents were asked for information as of the time of the data

collection contact.

The following summary is a composite of establishment

responses to the survey:

Establishments Number

In sample 4,482

Out of business and out of scope 1,198

Refusing to respond 1,082

Responding fully or partially 2,202

The 2,202 responding establishments (tables A1-A2)

yielded 5,378 occupational observations (quotes) for which

data were collected.

There were four procedures used to adjust for missing

data from partial and full refusals. First, imputations for

the number of plan participants are made for cases in which

this number is not reported (approximately 25 percent of

participants in health plans, 14 percent in retirement plans,

and less than 1 percent of participants in all other types of

plans). Each of these participant values is imputed by selecting a similar plan from another establishment with similar employment in a similar industry. The participant rate

from this selected plan is then used to approximate the number of participants for the plan that is missing a participation value.

Second, imputations for plan provisions were made when

they are not available in a responding establishment. These

plan provisions are imputed by selecting a plan from another establishment with similar characteristics. Provisions

from this selected plan are then used to represent the missing data. (This was necessary for about 11 percent of the

participants in short-term disability plans; 19 percent of

flexible benefits plan participants; 33 percent of medical,

dental, and vision care participants; 18 percent of longterm disability insurance participants; 37 percent of retirement plan participants; and 7 percent of life insurance plan

participants. Imputations were done for 1 percent of the

participants in paid leave plans.) The rates of nonresponse

for detailed plan provisions in the health and retirement

benefit areas precludes publishing most estimates of their

plan features.

For establishments that refuse, or are unable to provide

the minimum amount of usable data, a weight adjustment

is made using the sample unit employment. This technique

assumes that the mean value of the nonrespondents equals

the mean value of the respondents at some “detailed” cell

level. These cells are defined in a manner that groups establishments together that are homogeneous with respect

to the characteristics of interest. In most cases, these cells

are the same as those used for sample selection.

For establishments that refuse, or are unable to provide

data for a specific occupation, a similar cell approach is

used to make adjustments to the sampled occupation weights

in responding establishments. The characteristics of interest include the major occupation group of the unreported

occupations.

Standard errors

Standard errors are not available for the 1996 survey year.

Appendix B: Survey Response
108

Table A-1: Number of establishments and full-time occupational quotes studied and estimated number of full-time

workers within scope of survey, small private establishments, United States, 1996

Industry division1

Number of

establishments

studied

Number of occupational quotes studied2

Total

Professional,

technical, and related

Clerical and

sales

Blue-collar and

service

All industries ............................. 2,202 5,378 1,241 2,001 2,136

Manufacturing ....................... 129 418 54 62 302

Nonmanufacturing ................ 2,073 4,960 1,187 1,939 1,834

Mining ............................... 15 48 8 9 31

Construction ..................... 222 536 68 59 409

Transportaion,

communications,

electric, gas, and

sanitary services ......... 132 384 76 130 178

Wholesale trade ................ 259 745 112 372 261

Retail trade ....................... 460 826 54 405 367

Finance, insurance, and

real estate ................... 330 863 231 545 87

Services ............................ 655 1,558 638 419 501

Estimated number of full-time workers within scope of survey

All industries ............................. 39,816,173 7,979,698 12,279,707 19,556,767

Manufacturing ....................... 5,346,703 762,875 707,864 3,875,964

Nonmanufacturing ................ 34,469,470 7,216,824 11,571,843 15,680,803

Mining ............................... 281,899 30,767 30,176 220,956

Construction ..................... 4,286,025 436,791 336,970 3,512,264

Transportaion,

communications,

electric, gas, and

sanitary services ......... 2,274,671 339,981 626,639 1,308,050

Wholesale trade ................ 4,442,516 560,771 2,168,376 1,713,368

Retail trade ....................... 7,921,644 539,546 3,123,373 4,258,724

Finance, insurance, and

real estate ................... 3,513,063 863,605 2,056,235 593,223

Services ............................ 11,749,653 4,445,362 3,230,072 4,074,219

1 As defined in the 1987 edition of the Standard Industrial

Classification Manual, U.S. Office of Management and Budget. 

Indusry data are shown for informational purposes only and are

subject to larger than normal sample error. See section on reliability

of estimates. 2 These figures refer to all respondents to the survey, whether or

not they provided data for all items studied. See the section on

survey response.

NOTE: Because of rounding, sums of individual items may not equal

totals. Where applicable, dash indicates no employees in this

category.
109

Table A-2: Number of establishments and part-time occupational quotes studied and estimated number of part-time

workers within scope of survey, small private establishments, United States, 1996

Industry division1

Number of

establishments

studied

Number of occupational quotes studied2

Total

Professional,

technical, and related

Clerical and

sales

Blue-collar and

service

All industries ............................. 2,202 1,278 163 535 580

Manufacturing ....................... 129 23 1 9 13

Nonmanufacturing ................ 2,073 1,255 162 526 567

Mining ............................... 15 1 - 1 -

Construction ..................... 222 23 - 15 8

Transportaion,

communications,

electric, gas, and

sanitary services ......... 132 38 6 15 17

Wholesale trade ................ 259 78 2 43 33

Retail trade ....................... 460 507 4 249 254

Finance, insurance, and

real estate ................... 330 83 9 60 14

Services ............................ 655 525 141 143 241

Estimated number of part-time workers within scope of survey

All industries ............................. 14,078,841 1,188,306 4,841,526 8,049,009

Manufacturing ....................... 292,463 13,656 131,349 147,457

Nonmanufacturing ................ 13,786,377 1,174,650 4,710,176 7,901,552

Mining ............................... 1,509 - 1,509 -

Construction ..................... 191,680 - 54,478 137,201

Transportaion,

communications,

electric, gas, and

sanitary services ......... 525,735 48,737 109,334 367,664

Wholesale trade ................ 458,183 8,628 248,648 200,907

Retail trade ....................... 7,496,121 40,928 2,829,466 4,625,727

Finance, insurance, and

real estate ................... 431,231 48,925 276,728 105,578

Services ............................ 4,681,919 1,027,433 1,190,012 2,464,475

1 As defined in the 1987 edition of the Standard Industrial

Classification Manual, U.S. Office of Management and Budget. 

Indusry data are shown for informational purposes only and are

subject to larger than normal sample error. See section on reliability

of estimates. 2 These figures refer to all respondents to the survey, whether or

not they provided data for all items studied. See the section on

survey response.

NOTE: Because of rounding, sums of individual items may not equal

totals. Where applicable, dash indicates no employees in this

category.
110

The tables published in this bulletin present the major findings of the Employee Benefits Survey of small private establishments. Survey data are also available in research articles, special bulletins and reports, short publications, and

electronic media.

Articles based on Employee Benefits Survey data are

published periodically in the Bureau’s Monthly Labor Review and Compensation and Working Conditions. The following is a list of recent articles:

Moore, James H. “Hospital room and board benefits,”

Compensation and Working Conditions, Summer 1998, pp.

23-30.

Foster, Ann C. “Dental care benefits, 1995,” Compensation and Working Conditions, Summer 1998, pp. 45-49.

Blostin, Allan P. and Pfuntner, Jordan N. “Employee

Medical Care Contributions on the Rise,” Compensation

and Working Conditions, Spring 1998, pp. 46-51.

Foster, Ann C. “Employee Benefits in the United States,

1994-95,” Compensation and Working Conditions, Spring

1998, pp. 56-61.

Wiatrowski, William J. “Family Retirement Benefits,”

Compensation and Working Conditions Spring 1998, pp.

12-17.

Weinstein, Harriet G. “Linking Retirement Plan Measures,” Compensation and Working Conditions, Spring

1998, pp. 52-55.

Foster, Ann C. “Life Insurance” Compensation and

Working Conditions, Winter 1997, pp. 47-50.

Simpson, Hilery “Paid Personal, Funeral, Jury Duty,

and Military Leave: Highlights from the Employee Benefits Survey, 1979-95,” Compensation and Working Conditions, Winter 1997, pp. 35-46.

Weinstein, Harriet G. “Post-retirement Pension Increases,” Compensation and Working Conditions, Fall

1997, pp. 47-50.

Foster, Ann C. “Public and Private Sector Defined Benefit Pension Plans: A Comparison,” Compensation and

Working Conditions, Summer 1997, pp. 37-43.

Simpson, Hilery “Short-term Disability Benefits,” Compensation and Working Conditions, Summer 1997, pp. 52-

56.

Foster, Ann C. “Employee Benefits in the United States,

1993-94,” Compensation and Working Conditions, Spring

1997, pp. 46-50.

Simpson, Hilery “Paid Lunch and Paid Rest Time Benefits: Highlights from the Employee Benefits Survey, 1979-

93,” Compensation and Working Conditions, December

1996, pp. 18-23.

Foster, Ann C. “Early Retirement Provisions in Defined

Benefit Pension Plans,” Compensation and Working Conditions, December 1996, pp. 12-17.

Blostin, Allan P. and Pfuntner, Jordan N. “Changing

Survey Strategies in the Evolution of Health Care Plans,”

Compensation and Working Conditions, September 1996,

pp. 3-10.

Foster, Ann C. “Employee Contributions for Medical

Care Coverage,” Compensation and Working Conditions,

September 1996, pp. 51-53.

Wiatrowski, William J. “Counting the Incidence of

Employee Benefits,” Compensation and Working Conditions, June 1996, pp. 10-18.

Foster, Ann C. “Defined Contribution Retirement Plans

Become More Prevalent,” Compensation and Working

Conditions, June 1996, pp. 42-44.

Foster, Ann C. “Employee Participation in Savings and

Thrift Plans, 1993,” Monthly Labor Review, March 1996,

pp. 17-22.

Bucci, Michael and Grant, Robert B. “Employer-sponsored Health Insurance: What’s Offered, What’s Chosen?”

Monthly Labor Review, October 1995, pp. 38-44.

Appendix C. Availability of

Survey Data
111

Wiatrowski, William J. “Who Really Has Access to

Employer-provided Health Benefits?” Monthly Labor Review, June 1995, pp. 36-44.

Wiatrowski, William J. “Methods of Providing Childcare Benefits to Employees,” Compensation and Working

Conditions, May 1995, pp. 5-6.

Kramer, Natalie. “Employee Benefits for Older Workers,” Monthly Labor Review, April 1995, pp. 21-27.

Wiatrowski, William J. “Small Businesses and Their

Employees,” Monthly Labor Review, October 1994, pp.

29-35.

Special bulletins and reports focus on a single topic or

combine related themes. Recent publications include:

Employee Benefits in Medium and Large Private Establishments, 1995, Bulletin 2496, April 1998.

Employee Benefits in Small Private Establishments,

1996, News Release, June 15, 1998.

Employee Benefits in State and Local Governments,

1994, Bulletin 2477, May 1996.

Employee Benefits Survey: A BLS Reader, Bulletin

2459, February 1995.

Issues in Labor Statistics is one of a series of BLS occasional reports that present information of current interest.

Recent reports on employee benefits include:

Employer-sponsored Childcare Benefits, Summary

98-9, August 1998.

Unpaid Family Leave, Summary 95-4, January, 1995.

Parental Leave Benefits Provided by Employers, Summary 93-1, March 1993.

Health Care Benefits Under Close Scrutiny, Summary

93-2, March 1993.

The public may access Employee Benefits Survey data

through the Bureau of Labor Statictics’ World Wide Web

site at: http://stats.bls.gov/ebshome.htm

Questions on data in this publication should be referred

to the staff of the Employee Benefits Survey at (202) 606-

6222; via E-mail: ocltinfo.bls.gov; or by writing the Employee Benefits Survey, Bureau of Labor Statistics, 2 Massachusetts Avenue, NE. Room 4175, Washington, DC

20212-0001. Sensory impaired individuals may obtain information in this publication upon request. Voice phone:

(202) 606-STAT; TDD phone: (202) 606-5897; TDD Message Referral phone: 1-800-326-2577.