Table 52. Medical care benefits’: Percent of full-time participants by type of plan and
coverage for selected special benefits, smail establishments , 1990

7 Health maintenance | Non-health maintenance
Benefit item All plans organizations organizations
Alt participants
Hearing care 16 92 4
Orthoptics .. 1 - 1
Routine physical examinations 26 98 15
Organ transplant .. 28 13 3t
Well-baby car 32 97 22
Immunization and inoculation 23 96 42
Preventive dental care* 2 9 )
Vision examinations onl 12 ral
Professional, technical, and
related
Hearing care* 18 1 5
Orthoptios* 1 - 1
Routine physical examinations . 28 98 16
Organ transpiant 28 13 30
Well-baby care 37 96 27
Immunization and inoculation 29 97 7
Praventive dental care* 1 7 ()
Vision examinations only? 13 64 4
Clerical and sales
Hearing care? 12 91 3
Orthoptics’... 1 - 1
Routine physical examinations .. 24 97 15
Organ transplant 30 12 92
Well-baby care 28 97 20
Immunization and inoculation 22 94 13
Preventive dental care* 1 W fe)
Vision examinations only? 4 70 4
Production and service

Hearing care? . 18 93 5
Orthoptics® 1 - 1
Routine physical examinations 27 98 14
Organ transplant 27 14 30
Well-baby care 93 98 24
immunization ar 22 97 8
Preventive dental caret 2 10 1
Vision examinations only .. 13 ce) 2

* Plans providing services or payments for serv- “ Includes plans that only provide examinations
ices rendered in the hospital or by a physician. Ex- and X-rays.
cludes plans that provided only prescription drug cov- © Less than 0.5 percent.
erage. * Includes plans that provide only examinations.

?' Plans provide, as a minimum, coverage for hear-
ing examination expenses. NOTE: Where applicable, dash indicates no em-

* Exercises to improve the function of the eye ployees in this category.

muscles.

54



Table 19. Short-term:disability coverage: Percent of
full-time employees by participation in sickness and accident
insurance plans and paid sick leave plans, small establish-
ments, 1990

Protes-
sional, | Clerical | Produc-
Alem. | techni | and | tion and
Type of plan ployees | Cal and] sales | service

related | employ- | employ-
employ-| ees | ees
ees

Total . 100 | 100 100 | 100

With short-term disability coverage ..| 59 7 68 a7

Sickness and accident insurance
only ..

Paid sick leave only ..

Combined sickness and accident

insurance/paid sick leave 13 18 17 9

Without short-term disability
coverage .

NOTE: Because of rounding, sums of individual items may not équal to-
tals, Where applicable, dash indicates no employees in this category.

Table 20. Paid sick leave: Percent of full-time.employees by
type of provision, small establishments, 1990

Profes-
sional, | Clerical | Produc-
techni | and |tion and
some, [eal and} sales | service
Ployees | related | employ- | employ-
employ-| ees | ees

Provision

ees

Total . 100 | 100 | 100 | 100

Provided paid sick leave ... 47 70 61 29

Sick leave provided o

‘An annual basis only’ 4 62 53 26

A per disability basis only? 2 3 3 2
Both an annual and per

disability basis 2 3 3 1

‘As needed basis* 1 2 2 iV)

Other basis® ) 0) ro) 6

Not provided paid sick leave . 53 30 39 a

' Employees earn a specified number of sick leave days per year. This
number may vary by length of service.

® Employees earn a specified number of sick leave days for each ill-

ness or disability. This number may vary by length of service.

3 Plan does not specify maximum number of days.

* Less than 0.5 percent.

* Includes formal plans with provisions 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 to-
tals. Where applicable, dash indicates no employees in this category.



Employee Benefits in Small
Private Establishments, 1990 Qe

U.S. Department of Labor
Lynn Martin, Secretary

Bureau of Labor Statistics
Janet L. Norwood, Commissioner
September 1991

Bulletin 2368

For sale by the U.S. Government Printing Office
‘Superintendent of Documents, Mail Stop: SSOP, Washington, DC. 20402-9328
ISBN 0~16-035976-7



Related protection

Accidental death and dismemberment (AD&D) insur-
ance was available to nearly four-fifths of the life insurance
plan participants. This insurance provides additional
benefits if a worker dies or loses an eye or a limb in an acci-
dent. For virtually all of these workers, the AD&D benefit
equaled the basic life insurance benefit for accidental
death, and a portion of that benefit for dismemberment.”*

Benefits supplementing basic life insurance coverage
were available to one-fourth of the participants. Almost
without exception, these employees were required to pay
the full premium for such benefits. The typical supplemen-
tal plan provided term life insurance in multiples of 1-to
3-times annual pay, at the employee’s option. Supplemen-
tal coverage was considerably more prevalent for em-
ployee’s who had their basic insurance determined by a
multiple of pay formula than those with a flat dollar
amount of coverage.

Life insurance coverage for dependents was available to
one-fourth of participants. The majority of the workers
with this coverage were required to pay the entire pre-
mium to obtain coverage, while the remainder had avail-

28 For more information on accidental death and dismemberment
benefits, see Cynthia Thompson, “Compensation for death and dismem-
berment,” Monthly Labor Review, September 1989, pp. 13-17.

able either joint employee-employer paid or entirely em-
ployer-paid dependent coverage. The most prevalent
method used to provide dependent coverage was a flat dol-
lar benefit. In such plans, spouse coverage averaged
$3,502, and coverage for children averaged $1,953 in 1990.
Among other plans, the employee often had the option to
select specific benefits.

Plans providing a monthly income to surviving mem-
bers of an employee’s family were rare. These survivor
in-come benefits were in addition to other benefits, such as.
basic life insurance and survivor pension benefits. Survi-
vor income payments were generally a percentage of the
employee's pay or.a flat dollar amount. Benefits usually
continued for 24 months, although some continued until a
specific event occurred; such as.the:surviving spouse re-
marrying or reaching age 65, or surviving children reach-
ing a given age.

Service requirements

One-third of all life insurance. participants were
required to work a minimum period to qualify for the plan.
The most common service requirement for such workers
was 1 month, followed closely by 3 months. For another
third of participants, the service requirement could not be
determined.

Chart 2. Life insurance:
dependent,

Percent
40

Percent of full-time participants with supplemental,
and retiree coverage, small establishments, 1890

35

30

25

20

15

10

Supplementa}
life

insurance

Dependent
lite

insurance

Retiree
life
Insurance

63



might allow maximum employee contributions anywhere
from 6 to 16 percent of pay. Ten percent was the most
common maximum allowed in small establishments.

Virtually all participants in saving and thrift plans
found in small establishments were allowed to make pre-
tax contributions. However, the provisions governing pre-
tax contributions vary widely. For example, some partici-
pants in plans allowing pretax contributions had an option
to make either pretax or posttax contributions, others
could make only pretax contributions, and still others had
to make at least some of their contributions on a pretax
basis.

The tax status of employee contributions is important
not only because of the current deferral of income taxes,
but because pretax contributions may not be withdrawn
from an employee’s account, except in limited circum-
stances, without severe tax penalties. Employees electing
to make posttax rather than pretax contributions, howev-
er, would avoid these tax penalties on withdrawals of their
contributions.

Employers provide an incentive for participation in a
savings and thrift plan by matching all or a portion of the
employee’s contribution and adding this amount to the
employee’s account. Usually the employer matches a por-
tion of the employee’s contribution up to a specified per-
cent of the employee’s earnings. For example, the most
common provision found in small establishments in 1990
was for an employer to match all of the employee’s contri-
bution up to the first 3 percent of earnings. In contrast
with these straight percentage matches, the remainder of
the participants received matching contributions that var-
ied by length of service, level of employee contribution,
company profits, or investment option chosen.?>

The vast majority of participants in savings and thrift
plans were allowed to choose how they wanted their own
contributions invested. Common investment vehicles of-
fered by these plans included company stock, common
stock funds, guaranteed investment contracts, govern-
ment securities, money market funds, and long-term inter-
est bearing securities such as corporate bonds and U.S.
Treasury notes. The number of choices in these plans typi-
cally varied from two to five. Employees were nearly al-
ways allowed to split their contributions among the vari-
ous options and were allowed to change their investment
choices periodically.

Employees generalty had less flexibility when it came to
employer contributions. Two-fifths of the participants
were permitted to choose how the matching contribution
was to be invested. Where no choice was permitted, the
plan typically specified that the matching contribution
was invested in company stock.

Prior to normal payout at retirement, disability, or ter-
mination of employment, two-fifths of the participants in

35 For more details on employee and employer contributions to sav-

ings and thrift plans, see Michael Bucci, “Contributions to Savings and
Thrift Plans,” Monthly Labor Review, Novemaber 1990, pp.28-36.

74

savings and thrift plans were allowed to withdraw all or a
portion of employer contributions. Nearly half were only
allowed to withdraw employer contributions for hardship
reasons, such as medical or educational expenses. The re-
maining participants could withdraw employer contribu-
tions for any reason. A minority of participants who could
make withdrawals had a penalty imposed if they did so.
Most commonly, penalties involved suspending employee
contributions, and employer matching contributions, for a
given period, such as 6 months or 1 year.

Another method of accessing an employee’s account
prior to final payout is through loan provisions—almost
one-third of participants in savings and thrift plans were
allowed to borrow from their accounts. Occasionally, par-
ticipants were restricted to loans for emergency or hard-
ship situations only. Loans were generally required to be
repaid within 5 years, but longer payment periods applied
for home purchase or renovation loans.

Interest rates on employee loans were typically deter-
mined by a specific economic indicator (such as the prime
rate or U.S. Treasury bill rate), were at the discretion of the
plan sponsor (employer, employer association, or union),
or varied by the reason for the loan. In the latter case, loans
for the purchase of a home are often available at lower
rates than other loans. The majority of participants with
loan provisions paid rates of interest that varied by the rea-
son for the loan.

At retirement, savings and thrift plans virtually always
allowed for payout in the form of a lump sum. Many par-
ticipants were given a choice from among a lump sum and
other options, such as a lifetime annuity or installments
over a specified period.

Profit-sharing plans

Profit-sharing plans were available to 15 percent of all
full-time employees in small establishments in 1990 (table
78). There are three types of profit-sharing plans—cash
plans (covering less than 0.5 percent of the workers), def-
erred plans (15 percent), and plans that offer a combina-
tion of cash and deferred benefits (less than 0.5 percent). In
acash plan, benefits are paid directly to the participants in
cash, usually at the end of the year, while a deferred plan
holds money in employee accounts until retirement or
another condition stipulated by the plan (for example, dis-
ability or death). In a combined plan, the employee may
automatically receive a portion of the profits in cash, with
the remainder placed in a deferred account, or the em-
ployee may be given a choice of cash or deferred benefits.

Four-fifths of the participants in deferred profit-sharing
plans had no predetermined formula for employer contri-
butions. The remaining participants were in plans where
the employer contribution was determined by a specified
formula, such as 4 percent of profits if annual sales exceed-
ed $1 million.

Once the employer contribution is determined, it may
be allocated to individual participants in a number of



Table 5. Paid rest time: Percent of full-time employees by
minutes of paid rest time per day, small establishments,

Table 6. Paid holidays and vacations: Average number of
days for full-time participants, small establishments,

1990 1990
Protes- Profes- :
sional, | clerical | Produc sional, Produc-
techni | SRR tion tachni- | FeNC8" tion
. Allem-| cal, and cal, and
Minutes per day ployees| and re- onmloy. service em cig [and re-| SMS | service
lated |OMEEY lemploy- pa lated | P4 Partici-
lemploy- ees. i} Pants | ‘pants
ees
Total 100 | 100] 100 | 100 Paid holidays 95 98) 87
Provided paid rest time 4a) 42] 46 | st Paid vacation by length of service:'
Under 15 minutes .. 1/0 0) 1 Att year’ 76 | 95] 80] 66
15 minutes ... 2 2 2 At 3 years 100 | 114 | 102 | 92
Over 15 and under 20 minutes (a) 0) - Q At 5 years 11.5 | 13.0 | 11.8 | 10:
20 minutes ... 12 9] 10} 14 At 10 years 135 | 152 | 139 | 125
‘Over 20 and under 30 minutes ia] ) 9) 10) At 15 years 145 | 16.2 | 150 | 133
30 minutes st | 20} 92 | 32 ‘At 20 years 150 | 167 | 156 | 139
‘Over 30 minutes 1 1) 0 1 At 25 years 153 | 169 | 160 | 14.0
Number of minutes not At 30 years* 153} 169 | 160 | 141
available r0) Y iu) 1
. * Employees receiving vacation days, but none at 1 year of. service,
Not provided paid rest time .. s2 | 58 | 54) 49 were included only for the service periods for which they receive vaca-

* 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.

tions.

* The average (mean) was essentially the same for longer lengths of

service.

NOTE: Computation of average included half days and excluded
workers with zero holidays or vacation days and those with informal

plans.



Chapter 6. Defined Benefit Pension and Defined

Contribution Plans

Slightly more than two-fifths of full-time employees in
the smail establishment survey had retirement and’ capital
accumulation plans in 1990, through defined benefit or de-
fined contribution plans (table 72). Defined benefit pen-
sion plans use predetermined formulas to calculate a re-
tirement benefit, and obligate the employer to provide
those benefits, Benefits generally are based on salary, years
of service, or both.

Defined contribution plans generally specify the level of
employer and employee contributions to a plan, but not
the formula for determining eventual benefits as in a de-

fined benefit pension plan. Instead, individual accounts
are set up for participants, and benefits are based on
amounts credited to these accounts, plus investment earn-
ings. The risk of fluctuation in investment earnings, how-
ever, is borne by the employee.

In the Bureau’s first survey of small establishments, de-
fined contribution plans were found to be most common,
covering three-tenth of the full-time employees. Defined
benefit plans covered one-fifth of full-time employees, in-
cluding less than one-tenth who participated in both types
of plans. (See chart 3.)

Percent
25

Chart 3. Retirement and capital accumulation plans: Percent.of -
full-time employees in selected plans, small establishments, 1990

20

15

10

benefit profit
pension sharing

Defined Deferred Savings

and
thrift

Money Simplified
pur- employee
chase pension
pension



Table 27. Sickness and accident insurance: Percent of full-time participants with benefits based on n Percent of
irnings formula by maximum weekly benefit, small establishments, 1990

Maximum weekly benefit
Type of t Total | Tl | Less ma
‘ype of payment O18! | with | tran [8100 to|$120 to/$140 to] $160 to|$200 to| $250 to, $300 to] $350 to|$400 or Than
maxi- | sio9 | S119 | S130 | sis9 | si99 | g2a9 | s209 | saao | $999 | more
mum
Ail participants
Total ... 100} 80] ¢) 2; 0 1] 39 4| at 3 1 a | 2
Fixed percent of earnings a7 | 8] ¢) 21 0 1| 39 4{ 2 3 1 e| 18
Less than 50 .. 0) - - - - - - - - - - fa)
4) 43] - 1 -| 0 39 1 1 a| - | 4” 3
16 8 QO v) 0) iv) iv) 1 2 0 = 4
19) 0 - Q - - - ~ 0) - - =
2} 23] - 1 - 1 - 1| 17 1} 0 3 3
3) 2) -| -) -}| -| -!]o aPoarf = | o 1
Po} =) =] -) -) -; o; @] - -|) 0
Of =) =f =f =) -) =] 27 -} - 1 =) =] 4
4}o4y; -] -} -] 4] -] 2] ] -] 0 i] ¢
Percent of earnings varies 3 1 - QO - - - - 0 - - fu} 2
Professional, technical, and
ted
eo} - +10 1} 37 5) 17 s| - 14] 20
Fixed percent of earnings se) 8 - 1/0) 1| 37 5 | 17 5) - 4} 1
Less than 50 - - - - - - - - - - - - -
50 45) a2] - - - - 37 1 4} - -|o0 4
60 16 7) - -] 0 - - 1 -| 0 - 5 9
68 Oo] © -) -f @O) =] -] -7 -} @ > 2] 2] -
67 a2] i] - 1 - 1 -| 0 12 2) - 2 4
70 5} 4) -] -]| -]| -f| 2) 2] 0 3| - tho
75 0) - - - - - - - - - - -| 0
80 Of -f =] -) =f =} =f 2) =} =} 2) 2]
Other percent . 9 e| - - - - - 3] 0 - - 6| =
Percent of earnings varies ... 2 0) - - - - - - - - - ) 2
Clerical and sales
Total wil - an) 2) 40 5 | 21 1 - a] 23
Fixed percent of earnings 96] 76]. :- 1] 0 40 5| at 1 - a| 2
Less than 50 0) ~ - - - - - - -| @
50 44] ao} - -| 0 9 1 - - -1 0 3
60 19 9/ -1 0] 1 1 1 2] - - 4} 10
66 Oro} -) =f OF =f -f -] =) =) 2] =] -
67 ai a] - 1 - - -| 0 1) () - 3 4
70 2 1 - - - - - | 0 Vv) 1 - - 1
75 0) - - - - - - - - - - -| 0
80 1 - - - - - - - - - - - 1
Other percent 4 3] - - - 1 - 3] - - - -i 0
Percent of earnings varies 4| 0 - - - - - -| 0 - -|o 3

See footnotes at end of table.

27



Appendix B: Availability of the Survey’s Data Base

The tables published in this bulletin present for the first
time the major findings of the employee benefits survey in
small private establishments. The survey includes data for
both full-time and part-time employees. Results of addi-
tional research will appear as occasional articles in the
Monthly Labor Review.

The statistical tables in these publications cover only a
portion of the employee benefits information collected.
Persons interested in all provisions of a particular benefit
studied from the 1981-89 surveys can purchase a set of
magnetic tapes containing the survey’s data base by writ-
ing to: Office of Compensation and Working Conditions,
Bureau of Labor Statistics, Washington, DC 20212. At
this time, the 1990 data are being studied to determine
whether they can be made available to the public on mag-
netic tape. Questions on the availability of these tapes may
be sent to the above address.

Because of the Bureau’s pledge of confidentiality to sur-
vey respondents, the tapes have been carefully screened to
remove or alter any data that would reveal the identity of
individual establishments. The charge for furnishing the
data is limited to the cost of producing the tapes and pre-
paring supporting documentation.

For major benefit items, the BLS survey obtained plan
provisions and employee participation data for each of
three employee groups. The magnetic tapes, which consist
of a control file and plan data files for each benefit area,
may be used to derive national estimates, similar to those
published in this bulletin, for other items in the data base.
For some data items not presented in this bulletin, howev-
er, the data file is insufficient to produce reliable national
estimates, because either information on the provisions
frequently was not available or the number of employees
with the provision was very small. Moreover, the tapes
may not yield reliable estimates for individual industries,
geographic regions, or establishment size classes. Full doc-
umentation accompanies the tapes, including examples of
estimating formulas. Although Bureau staff will respond
to questions concerning the content of the tapes, technical
assistance in developing estimates is limited due to the
heavy workload associated with the survey program.

Data users can purchase individual tapes with details of
plans for each of the following benefits or groups of bene-
fits: (1) Medical, dental, and vision care; (2) life insurance;
(3) sickness and accident insurance; (4) long-term disabil-
ity insurance; (5) retirement and capital accumulation
plans; and (6) time off, flexible benefits, and reimburse-

98

e

ment accounts. (This last tape contains data on lunch time,
Test periods, holidays, personal leave, vacations, funeral
leave, jury-duty leave, military leave, parental leave, sick
leave, flexible benefits plans, and reimbursement ac-
counts.) Combined tapes are also available that contain
data for all of the benefits listed above. The plan data file
contains provisions for each plan that was reported and for
which usable information was available. However, plan
identification numbers on the tape are scrambled (and oth-
er identifying information is removed) to protect the confi-
dentiality of responding establishments.

Purchasers also receive the control file, which contains
establishment information required to produce estimates
from the plan data. Control file records include establish-
ment size codes; geographic, industrial, and employee
group classification codes; and the weighted number of
workers in each employee group. The control file also lists
all benefit plans offered in an establishment, with the
weighted number of plan participants in each employee
group. A plan is listed on more than one control file record
if it covers employees in more than one establishment. Al-
though plan identification numbers on the control file are
scrambled, the same scrambled numbers appear on the
data file so they can be matched to make estimates. Be-
cause establishment schedule numbers on the control file
are scrambled differently for each employee group, it will
not be possible to link together plans offered to different
employee groups within an establishment.

Benefit provisions obtained from plan documents are
recorded in coding manuais for medical, dental, and vision
care, life insurance, sickness and accident insurance, long-
term disability insurance, retirement, and capital accumu-
lation plans, and are then entered on the plan data file. A
set of coding manuals and instructions for completing
them are supplied to tape purchasers for interpretation of
data on the file. Time off, flexible benefits, and reimburse-
ment account provisions are reported directly on collec-
tion forms, copies of which are also provided to tape pur-
chasers.

The analysis of medical, dental, and vision care, life in-
surance, sickness and accident insurance, long-term dis-
ability insurance, retirement, and capital accumulation
plans is extremely detailed. The following list of medical,
dental, and vision care plan provisions included in the data
base gives an indication of the extent of the information
available on the magnetic tapes. Coverage of other bene-
fits is similarly detailed.



Chapter 4. Medical, Dental, and Vision Care

Medical care was one of the most prevalent benefits pro-
vided to full-time employees of small establishments in
1990. Medical care benefits were provided to seven-tenths
of full-time employees, while dental care was available to
three-tenths of employees.

The 1990 data for small establishments revealed sub-
stantial variations in the incidence of coverage for medical
and dental care benefits among occupational groups. Pro-
fessional, technical, and related employees were the group
with the highest percent of employees covered for medical
and dental care, 82: percent and 38 percent respectively,
while production and service employees had the least ex-
tensive coverage—60 and 24 percent, respectively.

Medical Care

This section presents details of medical care benefits, in-
cluding how frequently particular services were covered or
limited. Other aspects examined are: financing arrange-
ments, cost containment features, employee contributions
to plan premiums, requirements for plan participation,
and coverage for retired workers.

Coverage of selected categorles of medical care

All of the participants in medical care plans had cover-
age for such major categories of care as hospital room and
board, physicians visits in the hospital, surgery, and

Fee for
service plans

Chart 1. Medical care benefits: Percent of full-time participants by
type of fee arrangement, small establishments, 1990

Preferred
provider
organizations

Health maintenance
organizations

34.

|



Table 58. Dental care benefits: Percent of full-time participants by extent of coverage for selected procedures, small

establishments, 1990—Continued

Type of dental procedure
Extent of coverage Examina- | Dental X-| Dental Periodontal] Endodon- ‘eg Orthodon-
tions rays | Filings | sitgenyt | Inlays | Crowns |PSroee" ‘ies. [Prosthetics] O"o
Clerical and sales
100 100 100 100 400 100 100 400 100 100
100 100 100 100 96 98 98 100 94 63
4 4 5 5 4 4 4 5 4 )
Incentive schedule* 2 2 2 1 iy) i?) 1 1 0 -
Subject to copayment’. 2 2 1 4 3 4 2 2 4 4
Percent of usual, customary,
and reasonable charge .. 1 92 90 88 87 88 88 89 83 57
Less than 50 - - - - - - = - iV) iy)
50 iv) e) 9 4 70 70 13 9 67 48
60 - - 9) 1 5 8 1 1 4 3
61-74 1 1 7 7 1 2 ? 7 1 1
1% - - 3 3 1 1 3 3 (s) -
80 20 24 58 57 8 8 56 60 8 2
85 i) 1 2 2 ° (0) 3 3 0) -
90 2 2 1 2 @. () 1 1 iv} -
100° 68 63 9 5 1 1 5 6 2 4
Discounted benefit” - - 2 2 2 2 2 2 1
Subject to overall plan
provisions only* ) 0 iv) a) iv) iy) iv) ® ° ©
Not covered - - - 0 4 2 2 7) 37
Not determinat - - - - a) - ) - - -
Production and service
Total 100 100 100 100 100 400 100 100 100 100
cd 100 400 100 99 96 99 98 99 98 62
‘Scheduled cash allowance 12 12 12 13 12 13 12 13 12 oy
Incentive schedule‘ 1 1 1 1 ie) iv) 1 1 io) -
‘Subject to copayment® 4 4 1 6 4 6 4 4 6 6
Percent of usual, customary,
and reasonable charge .. 83 82 79 73 73 74 75 76 74 51
Less than 50 . - - - - - - - - v) fe}
50 a) 0 3 4 54 4 6 4 57 40
60 - - e 1 5 5 1 1 4 4
61-74 1 1 2 2 3 3 2 2 2 1
75 - - 2 2 @ iv) 2 2 e -
80 4. 16 55 4 to 9 52 54 7 1
85 1 2 5 4 1 1 4 4 1 -
90 3 3 2 2 1 1 1 1 1 -
100°. 64 58 " 5 1 1 6 7 2 5
Discounted benefit” - - 5 4 5 4 5 4 5 3
Subject to overall plan’
provisions only’ 1 2 2 2 2 2 2 2 2 2
Not covered - - - 1 4 1 1 1 2 38
Not determinable - - - - 1 - - - =

* Excludes plans that limited coverage to accidental injuries, removal of
impacted wisdom teeth, or repair of jaw.

* Participants were included as having coverage for orthodontia in
cases where benefits were limited to children,

* Less than 0.5 percent.

* Reimbursement arrangement in which the percentage of dental ex-
Penses paid by the plan increases if regular dental appointments are
scheduled.

* Participant pays a specific amount per procedure and plan pays alll re-
maining expenses. In the case of orthodontia, the copayment is generally

59

applied once per lifetime.

® Includes plans that paid the full cost and plans that paid 100 percent
‘of charges, but imposed a deductible and limited payment to a maximum
dollar amount.

7 Benefits provided at a discount if obtained from an approved provider.

* Reimbursement arrangement is the coinsurance provision used for all
covered expenses under the plan.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table:29. Long-term disability insurance: Percent of full-time participants by method of determining payment, small

establishments, 1990—Continued

With maximum

‘Type of maximum provision

Without maximum,

Method Total ‘coverage Pian maximum j Disability income coverage
only! maximum only?
Clerical and sales

All methods 100 84 at 12 at 16
Fixed percent of earnings 89 78 a 7 30 1
Less than 50 percent 2 2 - - 2 iv)

60 percent .. 6 5 1 2 2 2
55 percent . 1 ) - 0 . 1
60 percent .. 65 59 30 4 25 6
65 or 67 percent 13 1 9 1 1 2
70 percent .. 1 1 1 - e) =
More than 70 percent .. ro) - - : : 6
Percent varies by earnings 3 1 is) (a) 1 2
Percent varies by service .. ) @) () ro) - -

Scheduled dollar amount varies by
earnings .. is) 6 9] i) - -
Other . 8 4 - 4 - 1
Not determinable 2 - - - - 2
Production and service

All methods . 100 7 49 7 at 23
Fixed percent of earnings 83 73 46 5 at 10
Less than 0 percent 1 1 - - 1 1

50 percent 12 10 8 1 ) 2

55 percent v) 0) = is) ~ 7

60 percent 53 47 25 2 20 ?

65 or 67 percent 16 15 13 1 1 1

70 percent 7) 7) ) - - -
Percent varies by earnings 10 3 2 2 - 6

Scheduled dollar amount varies by

CAMINGS eon 1 1 1 - - -
Other. 4 Oy - ) - 3
Not determinable .. 3 - - - - 3

* Includes flat dollar maximums. and dollar maximums that vary by

years of service.

® Includes ceilings on income during disability that limit the total
amount payable from the long-term disability insurance plus other in-
come, such as dependent Social Security and rehabilitative employment

income,

* Less than 0.5 percent.

* Includes flat dollar amounts and scheduled percent of earnings

varying by length of disability.

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

30



Chapter 5. Life Insurance

This chapter presents details of employer-provided life
insurance protection, including the methods used to pro-
vide basic life insurance, the effect that age and retirement
have on insurance, and the availability and amount of cov-
erage for an employee’s dependents. In addition, the prev-
alence of such related coverages as accidental death and
dismemberment insurance, survivor income benefits, and
supplemental life insurance are examined.

Life insurance plans covered two-thirds of full-time em-
ployees in small establishments in 1990 (tables 63-71). Gen-
erally, the cost of basic life insurance in small establish-
ments was paid entirely by the employer. Where employee
contributions were required, one-half were stated as acom-
posite rate, that is, a set contribution covering more than
one benefit. Cost data for individual plans that make up this
rate could not be separated. For example, a plan may pro-
vide coverage for health and life insurance at one monthly
rate of $25. Among other methods of specifying employee
contributions was a flat amount based on coverage, for ex-
ample, 30 cents per $1,000 of coverage per month.

Types and amounts of benefit formulas

The most prevalent method for determining basic life
insurance was a flat dollar amount of coverage. Such cov-
erage was provided to just over three-fifths of life insur-
ance plan participants. This type of life insurance was
more prevalent for production and service participants
than among the other two occupational groups. The aver-
age flat-dollar amount of life insurance coverage was high-
est for professional, technical, and related participants
($29,158), while clerical and sales participants averaged
$13,838 and production and service participants averaged
$11,656,

Insurance protection of between $5,000 and $20,000
was most prevalent among participants in plans specifying
a flat dollar amount of insurance. A small percent of par-
ticipants in such plans had coverage of $50,000 or more;
white-collar workers, especially professional, technical,
and related workers, more often had these larger benefits.

Nearly two-fifths of full-time participants in small es-
tablishments were provided basic life insurance coverage
linked to their pay. Coverage of this type provides partici-
pants with a level of protection that increases automatical-
ly with a rise in pay. Such formulas were much more prev-
alent among professional, technical, and related workers
than among production and service workers. The most

62

common method of tying life insurance to pay was to mul-
tiply the employee’s annual salary by a factor of 1 or 2 and
round the product to the next $1,000. For example, an em-
ployee whose annual pay was $22,700 would receive
$46,000 of coverage under a plan providing 2 times pay
($22,700 times 2 equals $45,400, which is rounded up to
$46,000).

The average multiple-of-pay benefit formula was 1.6
times pay. Nearly half of all participants in these plans had
insurance equal to their annual pay. Three in 10 had cover-
age equal to twice annual pay or more.

Limits on the amount of life insurance coverage avail-
able to participants in the 1990 survey were placed on two-
thirds of all workers covered by multiple-of-pay plans. The
most prevalent maximums observed were between
$100,000 and $249,999, although one-fourth of partici-
pants in these plans had maximum benefits of $250,000 or
more. In fact, a small number of participants had maxi-
mum limitations of $1,000,000 or more.

Coverage for older active workers and retirees

Two-fifths of participants were in plans where older ac-
tive workers faced reduced benefits. Coverage is reduced to
account for the increased cost of insuring older workers.”
Of the participants whose plans reduced coverage, just un-
der three-fifths would have their first reduction at age 65.
Most of the remaining workers would experience reduc-
tions beginning at age 70. It was not common for reduc-
tions to occur before age 65.

Many plans reduced coverage for older workers only
once, typically to 50 percent of the original life insurance
amount. Other plans reduced coverage in several stages.
One common provision was to reduce coverage to 65 per-
cent at age 65, then to 50 percent at age 70.

Basic life insurance coverage continued after retirement
for one-fifth of the full-time participants in small establish-
ments in 1990. This coverage almost always continued for
the remainder of the retiree’s life, but the amount of the
benefit was usually reduced at least once during retire-

ment.2” (See chart 2.)

26 Details on life insurance benefits for older workers are discussed by
Michael A. Miller, “Age-related reductions in workers’ life insurance,”
Monthly Labor Review, September 1985, pp 29-34.

27 For more information on retiree life insurance, see Margaret Si-
mons and Cynthia Thompson, “Life insurance benefits for retired work-
ers,” Monthly Labor Review, September 1990, pp. 17-21.



Medical, dental, and vision care data base
Plan participation requirements

Employee monthly contribution for employee
and family benefits
Pretax status of contributions

Type of plan and funding arrangement
Medical benefits
Dental benefits
Vision benefits

Effect of retirement
Retired employees benefit coverage, eligibility, and
type of financing

Hospital coverage
Hospital room and board coverage
Hospital miscellaneous charges

Extended care
Extended care facility coverage
Home health care coverage
Hospice coverage

Surgical coverage
In-hospital surgical coverage
Second surgical opinion
Outpatient surgical coverage

Physician charges
In-hospital coverage
Office visit coverage

Maternity care benefits
Who is covered.

Diagnostic X-ray and laboratory testing coverage

Mental health care benefits
Tn-hospital room and board charges
Coverage for mental or psychiatric hospital
Outpatient mental health care

Substance abuse benefits
In-hospital detoxification care
In-hospital rehabilitative care
Outpatient care
(separate questions for alcohol abuse and drug
abuse)

Other benefits
Hearing care
Orthoptics
Physical examinations
Organ transplants
Well-baby care
Immunization and inoculation

#U.S. GOVERNMENT PRINTING OFFICE: 191 -312- 40959735

99

Mammography

Preventive dental care only (examinations and/or
X-rays)

Vision examinations only

Cost containment features
No or limited reimbursement for nonemergency
weekend admission to hospital
Preadmission testing
Preadmission certification required
Birthing centers
Hospital audit program
Utilization review

Dental care benefits
Who is covered
Prophylaxis and routine exams
X-rays
Fillings
Surgery—dental
Periodontal care
Endodontics
Inlays
Crowns
Prosthetics
Orthodontia
Preauthorization requirement

Vision care benefits
Who is covered
Eyeglasses
Eye examinations
Contact lenses

Prescription drug benefits
Brand name drugs
Generic drugs

Overall limitations
Out-of-pocket expense limitation
Overall deductible
Overall maximum
Overall coinsurance

Each medical expense section (e.g., hospitalization, pre-
scription drugs, physician charges) contains information
on internal limitations; these limits apply only to that cate-
gory of care. For example, hospital room and board may
have an internal limit of 120 days per confinement. Infor-
mation on overall limitations is also included in each
section, identifying limits that apply to more than one
category of care. These overall limitations—deductibles,
maximums, coinsurance, and out-of-pocket expense limi-
tations—are then described at the end of the database.
Three sets of data on overall limitations are available for
plans that include multiple overall limits.



sive medical and dental plan, or as a separate plan in addi-
tion to medical coverage. Often, employers offer a series of
medical plans from which employees may choose, as well
as a separate dental plan that can accompany any medical
plan. Two-fifths of all dental care participants were re-
quired to contribute toward the cost of their individual
dental coverage, and nearly two-thirds were required to
contribute for family coverage.

Where dental benefits are included in a single plan with
medical care benefits, it was not possible to distinguish
which portion of the employee’s contribution, if applica-
ble, went toward dental coverage. Employee contribution
data were examined in stand-alone dental plans, that is,
those offered separately from medical plans. When such
plans required an employee contribution, that contribu-
tion was typically under $5 per month for individual cov-
erage and under $15 per month for family coverage.

Nearly seven-eighths of participants covered by dental
care plans received benefits through a fee-for-service plan,
which reimburses patients or providers only after services
are received. Such plans were most commonly self-insured
or obtained through a commercial insurer. The remaining
participants had their dental benefits provided through ei-
ther a Health Maintenance Organization or a Preferred
Provider Organization option.

Dental plans typically cover preventive and restorative
services, and nearly two-thirds of participants were in
plans that also covered orthodontic expenses, at least for
children. Preventive care typically includes dental exami-
nations, prophylaxis (cleaning), and X-rays. Restorative
procedures include fillings, periodontal care, endodontic
care, prosthetics, and crowns.?!

Dental payments were generally based on a proportion
of the usual, customary, and reasonable charge for a proce-
dure. The proportion covered by a plan often depended on.
the type of procedure performed. Less costly procedures
such as examinations and X-rays were usually covered at
80 or 100 percent. Fillings, surgery, endodontics, and per-
iodontics were more likely to be covered at 80 percent. The
most expensive procedures—inlays, crowns, prosthetics,
and orthodontia—were often covered at 50 percent of the
usual, customary, and reasonable charge.

Less than 1 out of 10 dental plan participants were of-
fered reimbursement based on a schedule of cash allow-
ances for restorative services, such as fillings, crowns, and
endodontics. In this type of arrangement, each procedure
is subject to a specified maximum dollar amount that can
be paid to the participant or dentist. Orthodontia care was
rarely subject to this type of schedule. Incentive schedules
were rarely found in the survey. Under this arrangement,

21 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.

the-percent of dental expenses paid by the plan increases
each year if the participant is examined regularly by a den-
tist.

Finally, a small number of participants were in plans re-
quiring a copayment, after which benefits were paid in full.
Copayments were commonly $5 or $10 per procedure for
preventive care, while higher copayments often applied to
major dental services.

Two-thirds of dental participants were in plans that spe-

cified a deductible amount before any benefits were paid
by the plan. The most frequently observed deductible was
$25 or $50 deductible each year. However, a few plans re-
quired the participant to pay a deductible (usually $50)
only once while a member of the plan rather than every
year.
Plans that limited the amount of payment each year by
specifying an annual maximum benefit covered slightly
over four-fifths of dental plan participants. The most com-
mon limit was $1,000 per year. Orthodontic services were
almost always subject to separate lifetime maximums,
commonly $750 or $1,000. In 1990, the average lifetime
orthodontia maximum was $1,110.”

Preauthorization clauses require participants to obtain
authorization from the plan before undergoing expensive
treatment. Nearly three-fifths of the dental participants
were in plans with this cost containment technique. Com-
monly, procedures costing more than $100 or $200 were
subject to advance authorization.*

Vision Care

Vision care coverage was available to one-tenth of full-
time employees in small establishments in 1990.% Three-
fourths of participants covered by vision care provisions
received benefits through a fee-for-service plan, while one-
eighth were provided benefits through an HMO.

All participants eligible for vision benefits had coverage
for eyeglasses. With few exceptions, these participants
were also covered for eye examinations, Coverage for con-
tact lenses was somewhat less extensive than for either eye
examinations or eyeglasses; seven out of eight vision care
participants had coverage for contact lenses.

Medical care plans generally placed limits on vision care
benefits. Typically, vision care participants had their cov-
erage subject to a scheduled dollar allowance per benefit.
For example, eye examinations had a dollar maximum per
visit and various types of eyewear were subject to specific
dollar ceilings. The majority of participants had this type

22 For more details on dental care benefits, see Rita S. Jain, “Em-
ployer-sponsored dental insurance eases the pain,” Monthly Labor Re-
view, October 1988, pp. 18-23.

23 For tabulation purposes, plans that provided only preventive den-
tal care benefits were not included as having full dental care coverage.
Data for preventive dental care benefits are found in table 52.

24 Byeglasses must be included for there to be vision care coverage. If
the only benefit provided is eye examinations, then for tabulation pur-
poses, there would be no vision care coverage.



Table 80. Pian administration: Percent of full-time participants in selected employee benefit programs by type of plan
sponsor, small establishments, 1990

Sickness and Long-term oo
Plan sponsor Medical care Life insurance accident disability Defined benef
insurance insurance Benson
All participants
Total 100 100 100 100 100
Single employer . 88 94 52 98 73
Multiemployer’ 8 5 9 1 24
Mandated benefits® 1 ) 39 1 2
Employer association® 3 1 1 ) 2
Professional, technical, and
related
Total 100 100 100 400 100
Single employer 91 96 55 98 82
Multiemployer' 4 1 - ) 12
Mandated benefits® 1 iO) 44 2 5
Employer association® 3 3 1 0 1
Clerical and sales
Total 100 100 100 100 100
Single employer 90 96 49 98 85
Multiemployer! 5 2 3 - 12
Mandated bene 2 to) 4a 2 2
Employer association’ 3 1 ) 1
Production and service
Total 100 100 100 100 100
Single empioyer 84 a1 52 97 59
Multiemployer' 13 9 14 2 37
Mandated benefits 1 - 32 0) 1
Employer association’ 2 1 4 to) 3
* individual employers in the same or in a related industry contributing ® Less than 0.5 percent.
a negotiated amount to a trust fund providing benefits for employees cov- * Band of small employers in a common trade or business, for exam-
ered under a collective bargaining agreement. ple, savings and loan associations. The plan sponsored by the associa-

? The majority of the participants with mandated sickness and accident _tion is not negotiated with the employees.
insurance benefits were covered by State temporary disability insurance
plans. The remaining employees were covered by the Railroad Un- NOTE: Because of rounding, sums of individual items may not equal
employment Insurance Act. Mandated defined benefit pension plan par- _totals. Where applicable, dash indicates no employees in this category.
ticipants were covered by Railroad Retirement Tier 2.



The typical employer matching rate in a savings and
thrift plan was 100 percent, and generally applied to
the first 3 percent of earnings saved by the em-
ployee;

Benefits from deferred profit sharing plans were gen-
erally determined at the discretion of the company,
rather than based on a stated formula.

Defined benefit plans, which specify a formula for deter-
mining future benefits, were available to one-fifth of full-
time employees in small establishments.

For participants in traditional defined benefit pension
retirement plans:

The majority were in plans with formulas based on
earnings, most frequently on earnings during 5 con-
secutive years of employment;

e White-collar participants more commonly were cov-
ered by plans with earnings-based formulas, and
more commonly had benefits coordinated with So-
cial Security;

e Common eligibility requirements for a normal, or un-
reduced, pension were: Age 65 with no. specified
length of service, age 62 with no specified length of
service, and age 62 with 10 years of service;

e.The majority of covered workers could retire with a
reduced pension at age 55, most commonly after 10
years of service;

@ Fewer than 1 in 10 covered workers were in plans that
had granted one postretirement increase or more to
retirees during the previous 5 years.

Flexible benefits plans and reimbursement ac-
counts

Benefits may be provided to employees independently,
or as part of a package, complete with options, known asa
flexible benefits or cafeteria plan. Such plans were rarely
found for full-time workers in the 1990 small establish-
ment survey. Cafeteria arrangements give employees the
opportunity to choose between several benefits, such as
medical care, life insurance, and vacation days, and be-
tween several levels of care within a given benefit.

Employer-sponsored reimbursement accounts were
available to nearly one-tenth of full-time workers in 1990.
These accounts provide funds for employees to pay for ex-
penses not covered by existing benefit plans, such as child-
care expenses and medical care deductibles. Accounts
may include employer funds, employee funds contributed
on a pre-tax basis, or both.

Other benefits

In addition to the major benefits just described, the sur-
vey provided estimates of the incidence of 22 other bene-
fits. These data show the percent of workers eligible for a
specific benefit, but not the proportion of employees ac-
tually taking advantage of the benefit.

Of these benefits, the most frequently offered was em-
ployer-subsidized parking, which was available to nearly

cluded on-site facilities offered without charge, and re-
duced rates at commercial lots.

Educational assistance provides full or partial. reim-
bursement of employee expenses for books, tuition, and
fees. About one-third of full-time employees were eligible
for job-related educational assistance, while non-job-re-
lated educational assistance was rare.

Nonproduction cash bonuses were available to some-
what less than one-half of full-time employees, employee
discounts to nearly two-fifths, and employer gifts to one-
tenth. There was little difference in the prevalence of these
benefits among blue- and white-collar worker.

Two employer-subsidized health promotion services—
wellness programs and employee assistance programs—
were surveyed in 1990. Employee wellness programs were
offered to less than one-tenth of full-time employees.
These programs offered structured, separate plans (that is,
independent of medical care benefits), such as exercise and
physical fitness programs, weight control clinics, smok-
ing-cessation programs, and stress management courses,
to develop and maintain healthy lifestyles.

Employee assistance programs were available to slightly
more than one-eighth of the workers and provided em-
ployee referral and counseling services concerning such
problems as alcoholism, drug abuse, and emotional diffi-
culties. Employee assistance programs are closely related
to employee wellness programs and typically deal with
more serious personal problems than the essentially pre-
ventive medical issues addressed by wellness programs.
An additional health-related benefit, in-house infirmaries,
was rarely reported.

Several family-related benefits were. rarely. observed
among full-time employees in small establishments: Long-
term care insurance, often purchased with employee funds
at group rates, covers extended home health care or nurs-
ing home stays, and may be available for employees,
spouses, or other relatives; childcare benefits include em-
ployer-subsidized facilities or full or partial reimburse-
ment to employees for the cost of caring for a child in a
nursery, daycare center, or by a baby-sitter, on or off the
employer’s premises;> eldercare includes employer subsi-
dies for daycare for elderly or disabled dependents, or time
off for employees to handle such matters.®

The incidence of several benefits differed markedly by
employee group. Among these were relocation expenses
and travel accident insurance, for which a larger propor-
tion of professional and administrative employees were
covered. This may be partly due to the greater likelihood
of moving and travel among professional, technical, and

5 For further analysis of dependent care, see Stephanie L. Hyland,
“Helping Employees with Family Care,” Monthly Labor Review, Sep-
tember 1990, pp.22-26.

6 See chapter 7, Plan Administration, for information on reimburse-

ment accounts, an alternative means of subsidizing dependent care ex-
penses,



Contents—Continued

Coverage for older active workers and retirees ...
Related protection ........s0ceseeeereeeeeeee
Service requirements

Chapter 6. Defined benefit pension and defined contribution plans . ..

Defined benefit plans
Benefit formulas ...
Private benefits and Social Security payments .
Maximum benefit provisions
Replacement rates ....
Normal retirement
Early retirement
Disability retirement
Postretirement pension increases .
Postretirement survivor benefits
Preretirement survivor benefits

Defined contribution plans ......
Cash or deferred arrangements ..
Savings and thrift plans
Profit sharing plans ...
Participation and vesting in defined benefit and defined contribution plans ...

Chapter 7. Plan administration .
Plan sponsor ..........+.05
Plan financing ......... cece cece cece eres
Flexible benefits plans and reimbursement accounts .

Chapter 8. Benefits by type of establishment ..
Benefit in small, independent businesses
Employee Benefits Survey, 1979-89

Part-time Employees

Chapter 9. Benefits for part-time employees
Work schedule ...
Time off sees
Insurance, retirement, and other benefits .

Charts:

1. Medical care benefits: Percent of full-time participants by type
of fee arrangement. 2.2... . 5. cece cece center eee ene een eee e eee
2. Life insurance: Percent of full-time participants with supplemental,
dependent, and retiree coverage ..
3. Retirement and capital accumulation plans: Percent of full-time
employees in selected plans
4. Percent of full-time and part-time employees in small establishments

Tables:

Full-time employees in small establishments, 1990:
1. Summary: Participation in employee benefit programs
2. Summary: Eligibility for other benefits .......... cece n eee ee eee

vi

88
89
89
89

34

63

69
88



provided in a hospital.

Home health care, providing skilled nursing care to pa-
tients through various nursing services in their own
homes, was available to four-fifths of participarits. This
type of care saved on hospitalization expenses that would
otherwise be needed.

Plans often limited the duration of stays in an extended
care facility and the number of visits of home health care
services. For example, coverage in an extended care facil-
ity is commonly limited to 60 days per confinement while
home health care services are frequently restricted to 100
visits per year.

Coverage for a final alternative to hospitalization, hos-
pice care, was provided to about one-half of full-time par-
ticipants. A hospice offers nursing care and psychological
support to terminally ill patients, usually defined as having
6 months or less to live. Plans often times placed ceilings
on. maximum dollar amounts payable during a hospice
stay. .

Surgical coverage

Virtually all participants had medical plans that based
payments for in-hospital surgery on the “usual, custom-
ary, and reasonable” (UCR) charges for the particular pro-
cedure performed.

As was true with hospitalization, in-hospital surgical
benefits were most likely to be covered at a specified per-
centage rate, usually after any required overall plan de-
ductible. Slightly more than one-half of participants were
covered at 80 percent of the UCR charges. Nearly one-
fourth of participants were covered for the full UCR
charges (tables 44-46).

In-hospital surgery was covered according to a schedule
establishing a maximum amount payable for each proce-
dure for less than one-tenth of full-time enrollees. Charges
exceeding the scheduled maximums, however, were gener-
ally covered, subject to the plan’s overall deductible and
coinsurance.

Nearly three-fourths of participants were in plans where
outpatient surgery was covered in an identical manner to
in-hospital surgery, whether in full, a percent of UCR
charges, or subject to a schedule of maximum payments.
For those participants with different coverage for outpa-
tient surgery, outpatient services were often reimbursed at
a higher coinsurance rate.

Seven-tenths of all enrollees in plans with surgical bene-
fits had to satisfy a deductible for in-hospital procedures.
When outpatient surgery was needed, however, just over
one-half of these participants had a deductible require-
ment. Generally, when deductibles are not applicable for
in-hospital surgery, neither are they applicable for outpa-
tient procedures,

1 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 cir-
cumstances.

37

In fee-for-service plans, second surgical opinion provi-
sions were applicable to seven-tenths of participants with
inpatient surgical benefits. Almost half of these plan en-
rollees had incentives for obtaining second opinions, gen-
erally applying only to selected procedures. The most
prevalent incentive was to reduce the coinsurance rate if a
second opinion was not sought.

Second surgical opinion provisions are rare in HMO’s.
HMO’s by their very nature emphasize preventive, cost effi-
cient medical care, As such, built-in forms of utilization
review, including second surgical opinions, are automati-
cally provided.

The medical care plans examined in the survey treated
maternity charges like other surgical charges. One-fifth of
the participants were in plans that did not provide mater-
nity coverage for dependent children, except where com-
plications from pregnancy developed.

Mental health coverage

Mental health coverage, though available to nearly all
participants, was commonly subject to more restrictive
limitations than other illnesses (table 47). Of the medical
care participants with mental health benefits, between
eight- and nine-tenths had more restrictive hospital cover-
age for mental illness than for other ailments. Plans com-
monly limited the duration of hospital stays (often to 30 or
60 days per year for mental health care, compared to 120,
365, or unlimited days for other illnesses)'’ and sometimes
imposed a separate, lower, maximum on covered hospital
expenses (such as a lifetime maximum of $50,000 on all
mental health benefits). :

Even more restrictive was coverage for mental health
care outside the hospital (psychiatric office visits). Nearly
all participants with mental health care coverage were sub-
ject to special limits for outpatient care in 1990. Outpatient
mental health care was commonly covered for fewer visits
per year than other outpatient services, subject to special
maximum dollar limits on annual payments, and covered
ata coinsurance rate of 50 percent rather than the usual 80
percent paid by the plan for other illnesses. Also, outpa-
tient mental health care expenses often could not be used
to meet the employee’s maximum out-of-pocket expense
limitation. Therefore, reimbursement for these expenses
did not increase to 100 percent even when the out-of-pock-
et,expense limitation was met.'6

Alcohol and drug abuse treatment

Alcohol and drug abuse treatment benefits covered
nearly all full-time medical participants (tables 48-50).
Seven out of 8 participants with alcohol benefits had their

5 In some plans, a limited number of days of mental health care in the
hospital were covered at full semiprivate rate. After these limits were
reached, mental health care was then subject to overall plan limits such
as deductibles and coinsurances.

18 A detailed examination of mental health care provisions in em-
ployer-provided health care plans is provided by Allan P. Blostin in
“Mental Health Benefits Financed By Employers,” Monthly Labor Re-
view, July 1987, pp. 23-27.



Table 70. Life insurance: Percent of full-time participants
with dependent coverage available, by type and amount of
coverage, small establishments, 1990

Table 71. Life insurance: Percent of full-time participants:
by length-of-service requirements for participation,' small
establishments, 1990 $

Profes-
sional, | Clerical | Produc-
techni | “and | tion and

Type and amount of coverage | AUP |cal, and} sales | service

ipants|| related | partici- | partici-
partici- | pants | pants
pants

Profes-
sional, | Clerical | Produc-
- Al par. | teehni | and | tion and
Length-of-service requirement | icjgants| Cal, and | sales | service
related | partici- | partici
partic | pants | pants

pants

Total .. 100 | 100 100 100

Death of spouse

1 > 10) 2

14 15 7 18

1 > 2 iv)

22 11 19 30

3 5 2 3

2 1 3 1

1 1 2 1

25 36 28 19

3 2 4 3

Benefit varies .. 20 24 26 15

By age of spouse 3 5 2 1
By employee earnings () QO 0)

By employee option 14 16 19 10

By amount of employee life

insurance coverage «. 4 2 5 4
‘Amount of coverage not
determinable ... 7 3 7 9
Insurance on spouse not
provided is) ) 1 -
Death of child 98 98 99 96
Flat benefit .. 69 ia) 70 67
Less than $1,000 4 i 1 7
$1,000 32 37 26 34
$1,500 2] 0 4 2
$2,000 12 W 15 10
$2,500 10 15 1" 6
$3,000 2 2 2 1
$4,000 4 0) 2 1
$5,000 5 5 7 4
More than $5,000 2 v) 2 2
Benefit varies .. 22 23 23 20
By age of chi 8 8 6 10
By employee earnings iv) 10) 0. -
By employee option 1 13 15 8
By amount of employee life
insurance coverage 2 2 1 2
Amount of coverage not
determinable ... 7 3 7 9
Insurance on child not provided 2 2 1 4

* Less than 0.5 percent.
? Amount of insurance increases at some point after 1 year of age.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

100 | 100 | 100

33 39

13 “13:

2 4

14 12

1 4

1 3

a |e

2 2
- | doe,

‘Without service requirement 34 39 37 29

Service requirement not
determinable

Not applicable—plan not
available to new employees...

‘ Length of time employees must be on the job before they are cov-
ered by a plan that is at least partially employer financed. ‘There is fre-
quently an administrative time: lag between completion of the require-
ment and the actual start of participation. if the lag was 1 month or
more, it was included in the service requirement. Minimum age require-
ments are rare.

? 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 73. Retirement and capital accumulation plans: Table 74. Defined benefit pension plans:' Percent of

Percent of full-time participants by selected plan types and full-time participants by method of determining retirement
combinations of plans, small establishments, payments, small establishments, 1990
1990 :
Profes-
Protes- sional, | Clerical | Produc-
sional, } Clerical | Produc . All par. | techni- | and | tion and
All par. | techni: | and’ | tion and Basis of payment® ticipants | ©! and) sales | service
Type of plan ticipants| C3! and) sales | service related | partici- | partici-
related | partici- } partici- partici. | pants } pants
partici- | pants | pants pants
pants
Total 100 | 100 | 100
Defined benefit 100 | 100 | 100°! 100 Terminal earnings formula .. 58 72 69 44 |
With: No alternative formula 49 6t 56 37
No other plan .. 73 69 70 79 Alternative formula .. 10 "1 13 7
Savings and thrift 18 24 20 14
Other combinations’ 9 10 10 7 Career earnings formula 10 14 14 5 |
Savings and thrift 100 100 100 100 Dollar amount formula® 20 7 8 35
With:
No other plan 63 63 63 63 Percent of contributions formula 1" 6 8 18
Defined benef 26 24 27 26
Other combinations’ "1 13 10 10 Cash account... 1 1 1 “
* Excludes supplement sion plans.
Deterred profit sharing . 100 100 100 100 2 ahematve Temviee are eo designed to provide a ‘minimum
With: benefit for employees with short service or low earings.
No other plan 75 9 74 8 * Includes formulas based ‘on dollar amounts for each year of service
Other combinations’ 25 a1 26 19 and flat monthly benefit varying by service.

* Less than 0.5 percent.

* Includes combinations with one or more defined contribution plans, in- ; -
cluding money purchase, deferred profit sharing, savings and thrift, and NOTE: Because of rounding, sums of individual items may not equal to-
stock plans. tals. Where applicable, dash indicates no employees in this category.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 75. Defined benefit pension plans:' Percent of
full-time participants by selected benefit-related pian
features, smail establishments, 1990

Profes- j
Al sional, | Clerical | Production
Item M ants| technical, | and sales
Participants! and related| participants paricipants
participants| ipa
All pension formulas
Benefit coordinated with
Social Security? name] 49 64 65 30
Offset by Social |
Security’ | 27 36 41 2
Stop-rate exces 22 28 26 7
Benefit subject to a limit i
on years of credited
service 41 49 47 32
Terminal earnings
formulas
Earnings used in benefit
computation:
Three years 15 16 2 18
Five year 79 7 83 78
Other .. 6 7 5 6

* Excludes supplemental pension plans.

* Sum of individual items may not equal totals because some
‘employees participated in plans with more than one type of coordination
provision.

* Benefit as calculated by formula is reduced by a portion of primary
Social Security payments.

* Formula applies lower benefit rate to. earnings subject to FICA (Social
Security) taxes or below a specific dollar breakpoint.

1



Employee Benefits in Small
Private Establishments, 1990

}

U.S. Department of Labor
Bureau of Labor Statistics
September 1991

Bulletin 2388



Contents

Page
Chapter 1. Incidence and provisions of employee benefit plans ............ 1
Time-off benefits ..... 1
Disability benefits .. 2
Medical, dental, and vision care, and life insurance . ; 2
Defined benefit pension and defined contribution plans .. 2
Flexible benefits plans and reimbursement accounts . 3
Other benefits .......... 0.00. c cece ee eeeeeeeeee 3
Full-time Employees
Chapter 2. Work schedules, paid time off, and parental leave . 7
Work schedules ........... 7
Paid lunch and rest periods 7
Paid holidays... 7
Paid vacations . . 7
Paid personal leave 8
Paid funeral leave, jury-duty leave, and military leave . 8
Parental leave 2.0.0.0... 0.0 cc cece eee ee eeeeeeeeues 8
Chapter 3. Disability benefits 17
Paid sick leave ............ 17
Sickness and accident insurance 17
Long-term disability insurance . 18
Chapter 4. Medical, dental, and vision care ... 34
Medical care ............ 34
Coverage of selected categories of medical care 34
Funding arrangements . 35
Payment arrangements . 35
Overall limitations .. 36
Hospital coverage 36
Alternatives to hospitalization ... 36
Surgical coverage ....... 37
Mental health coverage .. 37
Alcohol and drug abuse treatment 37
Health maintenance organizations .. 38
Cost containment ...... 38
Other medical benefits . 39
Employee contributions . . 39
Participation requirements . 39

Coverage for retired workers . 39
Dental care ... 39
Vision care ... 40

Chapter 5. Life insurance
Types and amounts of benefit formulas ... 2.2.00... 6. cc ccccecceccccsecccccaceuceeuacenecs 62



Table 26. Sickness and accident insurance:

Percent of full-time participants by type and duration of payments, smail

establishments, 1990—Continued

Type of payment

Total

Maximum weeks of coverage

Less than
43

13

14-25

26 27-51

52

Over 62

Varies by
service

Professional, technical, and
related—Continued

Fixed weekly dollar benefit
Less than $60 ..
$60-$79
$80-$99
$100-$119
$120-$139
$140-5159
$160-$179
$180-$199
$200-$219
$220 or more

Weekly dollar benefit varies
By earnings ...

Clerical and sales

All types

Fixed percent of earnings ..
Less than 50

Percent of earings varies ..
By service ..
By length of disability
By both service and length of

disability

Fixed weekly dollar benefit
Less than $60
$60-$79 ..
$80-$99 ..
$100-$119 ..
$120-$139 .
$140-5159
$160-$178 ..
$180-$199 ..
$200-$219 ..
$220 or more

Weekly dollar benefit varies

By earnings
By service or

See footnotes at end of table.

wa aSyFnSia

rrres

acess
pera

peurue

tereae

bareavaaead

trae

25



Chapter 8. Benefits by type of establishment

The Employee Benefits Survey provides data on the in-
cidence and characteristics of employee benefits for full
and part-time workers in private industry and State and
local government. Data are presented separately for
small establishments, medium and large establishments;
and State and local governments. In the future, combined
data from each of the sectors of the economy will be avail-
able.

Included in the small establishment survey are small in-
dependent businesses, such as a local grocery store, and
small establishments that were part of larger enterprises,
such as a local service unit of a large manufacturing com-
pany. Separate data are presented in this chapter on the
incidence of benefits among employees in small, indepen-
dent businesses, which account for about three-fourths of
the workers in all small establishments in 1990.

A summary of the results of prior Employee Benefits
Surveys is also presented. The data from these surveys in-
dicate some of the major benefit trends that have been
tracked since 1979.

Benefits in small, independent businesses

In 1990, the proportion of full-time employees in small
independent businesses who received specific employee
benefits was generally less than that found among all full-
time employees in small establishments. For example, paid
funeral leave was available to 47 percent of full-time em-
ployees in all small establishments and to 38 percent of
such employees in small independent businesses (table 83).

Paid vacations and holidays were the most prevalent
benefits available to full-time employees in small indepen-
dent businesses in 1990, covering 86 and 81 percent of
workers, respectively. Just under half of the full-time em-
ployees in small independent businesses had paid jury-du-
ty leave, paid sick leave, and paid rest time, while other
time-off benefits were less common.

About two-thirds of the full-time workers in small inde-
pendent businesses participated in medical care plans in
1990, while nearly three-fifths had life insurance protec-
tion. Other insurance coverage was much less prevalent:
dental care and sickness and accident insurance plans each
covered nearly one-fourth of full-time employees in small

#2 Data on full and part-time employees in State and local
governments will be available in late 1991. Data on full- and part
-time employees in medium and large private establishments will
be available in 1992.

independent businesses in 1990, while about an eighth had
long-term disability insurance protection.

Retirement plans covered one-third of full-time em-
ployees in small, independent businesses in 1990, 'com-
pared to two-fifths in all small establishments. Most of this
difference resulted from the significantly lower incidence
of defined benefit pension plans in small independent busi-
nesses.

Among other benefits studied, the most prevalent prac-
tice available to full-time employees in small independent
businesses was employer-subsidized parking—nearly
nine-tenths of such workers received parking benefits in
1990 (table 84). Few of the other items studied were wide-
spread among all full-time workers in small establish-
ments. In small, independent businesses, these benefits, for
the most part, were even less prominent.

Employee Benefits Survey, 1979-89

Table 85 provides a summary of the major findings of
the Employee Benefits Survey in medium and large estab-
lishments from 1979-86 and 1988-89, and in State and lo-
cal governments in 1987. In comparing the data on small
establishments presented throughout this bulletin with
those from prior surveys, significant variations are evi-
dent. For example, over nine-tenths of full-time employees
in medium and large establishments participated in a med-
ical care plan in 1989, compared with seven-tenths of full-
time employees in small establishments in 1990. Data on
the percent of workers receiving other employee benefits
reveal similar differences by size of establishment.”

The data from prior Employee Benefits Surveys can also
be used to track benefit trends during the 1980's, specifi-
cally in medium and large private establishments. Among
the trends evident is the increase in the percent of workers
required to contribute toward health care premiums, and
the decline in the percent of workers with defined benefit
pension plan coverage.“ Differences in the incidence and
characteristics of public and private sector benefits are
also evident.

43 For more data on benefits by size of establishments among medium
and large establishments, see Thomas P. Burke and John D. Morton,
“How Firm Size and Industry Affect Employee Benefits,” Monthly La-
bor Review, December 1990, pp. 35-43.

4 Some of the differences noted in medium and large establishment
data are due to changes in the size and industries of establishments, be-
ginning in 1988. See Employee Benefits in Medium and Large Establish-
ments, 1988, H1s Bulletin 2336, for more details.



Table 77. Defined benefit pension plans:' Percent of
full-time participants by selected plan features, small
establishments, 1990

Table 78. Defined contribution and stock plans: Percent of
full-time employees participating by type of plan, small
establishments, 1990

Profes-
Al sional, | Clerical | Production
Item ‘ technical, | and sales ¢
Participants| snd related participants| ea
participants; Parkcipants
Early retirement permitted| 95 97 97 93
Disability benefits
provided 1 85 92 92
Lump sum payment or ad_
hoc pension increase
provided between
1985-89 .. 7 6 7 7
Cost-of-living
provided 2 2 3 1
* Excludes supplemental pension plans.
Table 79. Cash or deferred arrangements:' Percent of

full-time employees participating in plans permitting
employee contributions with pretax dollars, small
establishments, 1990

Profes-
sional, | Clerical | Produc-
‘All em. | techni- | and |tion and
tem ployees |°@ and| sales | service
related | employ- | employ-
employ-| ees | ees
ees
Percent of all employees in plans
with cash or deferred arrangement| 17 28 23 10
Salary reduction plans*.. 15 23 2
‘Savings and thrift plans 10 16 15
Profit sharing plans 2 2 3
Supplemental contri
money purchase pension Plans 0 1) 0)
Freestanding accounts*... 2 5 3
Regular contributions to pension
plans on a pretax basis 2 2
Defined benefit pians® . e (3) iv) ()
Money purchase plans 2 3 2 2
Deferral of profit sharing allocation’ | @) 1 () o)

* Tabulations show percent of employees participating in plans that al-
tow income, and associated tax, to be deferred, Not all participants may
elect to have their income deferred. Includes employee contributions to re-
tirement plans under several sections of the Internal Revenue Code (IRC).
Excludes pretax contributions for insurance, dependent care, and other ex-
penses under IRC section 125.

* Employee may elect to make pretax contributions to a long-term sav-
ings or retirement account.

Less than 0.5 percent.

* Employer contributions are not made to the plan.

* Required employee contributions to a defined benefit pension plan
are made on a pretax basis, but an account separate from the pension
plan is not established for these savings.

* Employer profit sharing distribution may be taken in cash by the em-
ployee, triggering current year tax liability, or may be deferred into a long
term account, with corresponding deferral of taxes,

NOTE: Sums of individual items may not equal totals either because of
rounding or because some employees participate in more than one type of
plan. Where applicable, dash indicates no employees in this category.

Profes-
sional, | Clerical | Produc-
‘Alem: | techni | and |tion and
Type of plan Toyees [C2 and] sales | service
ployees | ‘elated | employ- | employ-
employ-} ees | ees
ees
Savings and thrift 10 16 15 5
Profit sharing 15 7 7 | 13
Immediate cash only 0) - 1) =
Deterred benefits only 15 16 17 13
Combination (0) 1 V) VW)
Employee stock ownership . 1 1 1 0)
Money purchase pension 6 9 6 6
Stock bonus “) - Y -
Simplified employee pension .. 1 1 1 )

* Less than 0. percent,

NOTE: Because of rounding, sums of individual items may not equal to-
tals, Where applicable, dash indicates no employees in this category.



Chapter 2. Work Schedules, Paid Time Off,

and Parental Leave

The majority of full-time employees worked a 40-hour
week. Time off with pay was available to employees in sev-
eral different forms—from daily rest periods to annual va-
cations of several weeks. In 1990, survey coverage of paid
time off benefits included provisions for lunch and rest pe-
tiods; holidays and vacations; and personal, funeral, jury-
duty, and military leave. Paid and unpaid maternity and
paternity leave were also surveyed. (Information on paid
sick leave appears in chapter 3.)

Work schedules

Weekly work schedules of 40 hours were predominant,
applying to three-fourths of the full-time employees cov-
ered by the survey (table 3). Alternatives, such as 35 or
37'/, hours per week, were most prevalent among white-
collar workers. Three quarters of the work force were
scheduled to work five 8-hour days.

Formal flexible work arrangements, which give em-
ployees the opportunity to begin and end work within a
range of hours, were rarely observed. When available, lim-
its on the amount of flexibility varied from plan to plan,
but generally employees must be at work for a core of
hours during midday. White-collar workers were more
frequently offered flexible work schedules than were blue-
collar ‘workers.

Paid time off

Paid lunch and rest periods. Formal paid lunch periods
were provided to fewer than one-tenth of the employees,
and about half were provided formal rest time, such as cof-
fee breaks and cleanup time (tables 4 and 5). Paid rest time
was slightly more common among production and service
workers than among the other two occupational groups,
while paid lunch time generally applied equally to all
groups.

Blue-collar employees who were covered by paid lunch
period plans averaged 33 minutes per day; while their
white-collar counterparts averaged 42 minutes each day.
Paid rest time, averaging 27 minutes a day, was provided
most commonly as two daily breaks of 10 or 15 minutes
each.

Paid holidays. Paid holidays, averaging 9.5 days per year,
were provided to over four-fifths of full-time employees.

White-collar workers were more likely to receive paid holi-
days than were blue-collar workers, Floating holidays and
“personal holidays,” such as employee birthdays, were in-
cluded in the holiday plans reported (tables 6 to 8).

When a holiday fell on a scheduled day off, such as a
Saturday or Sunday, another day off was regularly granted
to three-fourths of the employees receiving paid holidays.
Most of the remaining workers received either another day
off or an additional day’s pay, depending on when the holi-
day fell.

Paid vacations, Paid vacations were provided to nearly 9
out of 10 employees (table 9). As with paid holidays,
white-collar workers were more likely to receive paid va-
cations than blue-collar workers. Vacation pay provisions
for all employees averaged 7.6 days at 1 year of service,
13.5 days at 10 years, 15.0 days at 20 years, and 15.3 days
at 30 years.

Plans covering white-collar employees generally pro-
vided more vacation days than those for blue-collar em-
ployees, particularly as length of service increased. Three-
fifths of white-collar employees, for example, became
eligible for at least 15 days of vacation at 10 years of service
compared with two-fifths of blue-collar employees.

In cases where holidays, vacation, sick leave days, or
personal leave were combined under one leave category
and could not be shown separately, the total amount of
leave was reported as vacation time. These consolidated
leave plans or “leave banks” have been adopted by a num-
ber of establishments, most notably those that must always
remain open, such as hospitals and nursing homes. Such
arrangements were rare, but when found typically offered
a greater average number of days than vacation plans that
were not leave banks.

Nearly all white-collar employees received their regular
salaries or earnings during vacation periods. Nine-tenths
of blue-collar employees also received their regular pay;
the remainder received either a flat-sum payment or pay-
ments based on a percentage of regular earnings. Anni-
versary-year bonus vacation days, such as an extra week of
vacation at 10 and 20 years of service, were included in the
count of regular vacation time.

Virtually all employees covered by vacation plans had
to work a specified period of time before being able to take
a vacation (table 10). The most common length-of-service



Table 45, Medical care benefits: Percent of full-time
Participants in plans with inhospital surgical benefits by
comparison with outpatient surgical coverage, small
establishments, 1990

-Medical care benefits: Percent of full-time
participants In fee-for-service plans. with inhospital surgical
benefits by second surgical opinion provisions, small
establishments, 1990

Profes- Profes-
sional, | Clerical | Produc- sionai, | Clerical | Produc-
All par- | techni-.| and | tion and Alt par-| techni | and tion and
Outpatient surgery ticipants eal, and} sales | service ttem . ticipants cal, and! sales | service
related | partici- | parti ‘pants | related | partici- | partici-
partici- | pants | pants partici- | pants | pants
pants pants

Total 100 100 100 100

Coverage the same as inhospital

surgery 72 69 73 73

Coverage differs from inhospital

surgery 28 31 27 27
Coinsurance rate higher for

outpatient surgery 23 25 22 23

100 percent .. 22 24 at 22

‘90 percent or 1 1 2 1

Other differences" 5 6 5 4

* Includes plans under which inhospital surgery is subject to the overall
Plan deductible while outpatient surgery is not, and plans where inpatient
and outpatient surgery have different deductibles.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

49

Total .. 100 100 | 100 | 100

With second surgical opinion

provision n 72 ca) 70

Pian pays for, but does not
provide incentives for, second

opinions 38 36 37 39

Plan provides incentives for

second opinions 33 36 34 32

For selected procedure: 25 28 25 29
No payment without

second opinion .. 2 3 2 1
Reduced coinsuran

without second opinion .| 23 25 23 22

For all procedures ... 7 7 7 7

Reduced coinsurance .
without second opinion | 1 1 1 1
Schedule of payments
lower without second

opinion . 1 2 1 1

Other lower payments 4 5 5 4
Details of incentive not

available 2 1 2. 2

Without second surgical o
provision

29 28 29 30

* Procedures most commonly mentioned were tonsillectomy, adenoid-
ectomy, hysterectomy, surgery of the nose or back, removal of the gall
bladder, and coronary bypass surgery.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 87. Other benefits: Percent of part-time employees
eligible for specified benefits, small establishments, 1990

Profes-
sional, | Crerigay | Produc
techni. | erica!” tion
, Allem-| cal, and
Employee benefit ployees| and re- eres service
lated es ‘employ-
employ- ees
ees
Income continuation plan
‘Severance pay 4 3 5 3
‘Supplemental unemployment
benefits .. - - - -
Transportation benefits:
Free or subsidized
employee parking ... a4 | 65 | 85 | 87
Subsidized commuting .. () 1 - ()
Job-related travel
accident insurance .. 3] a 6 1
Gifts and cash bonuses:
Gifts 7 9 8 7
Nonproduction bonuses a3 | 37 | 34 | at
Financial and legat services:
Financial Counseling «1... ie) 1 10) (0)
Prepaid legal services 1 - 1/0
Family benefits:
Employer assistance for child
care 1}, 0}, 0 2
Employe i
assistance for adoption . oO; oe) oT o
Eldercare ... 1 1 1
Long-term care insurance. - - - -
Health promotion programs:
In-house infirmary 1 1 1 iv}
Weliness programs . 4 21 3| 2
Employee assistance programs 4 7 2
Miscellaneous benefits:
Employee discounts ... 46 | 28 | 47 | 48
Employer-subsidized
recreation facilities 1 fy) 1 2
Subsidized meals .. 10 1 3] 17
Sabbatical leave - - - -
Retocation allowanc 2 2 3} ¢
Education assistanc
Job related .. jo} i} 12 6
Not job refated 1 1 1 1

* Less than 0.5 percent,

NOTE: Where applicable, dash indicates no employees in this cate-

gory.

91



While all defined benefit plans and nearly all defined
contribution plans were used for retirement purposes, a
small percent of employees were in capital accumulation
plans. These plans provide employees on opportunity to
put aside assets for long-term purposes with little or no re-
strictions on withdrawals. For one-half of the participants
in capital accumulation plans, this was in addition to a re-
tirement plan (table 72).

A large majority of participants in retirement and capi-
tal accumulation plans were enrolled in only one plan.
Participants in savings and thrift plans were most likely to
have another retirement or capital accumulation plan
available to them (table 73).

Defined Benefit Plans

In 1990, one-fifth of full-time employees in small esta-
blishments—approximately 6.5 million employees—par-
ticipated in defined benefit pension plans. Full-time em-
ployees in small establishments, as mentioned above, were
more likely to be covered by a defined contribution plan
than a defined benefit pension plan.

Benefit formulas

Earnings-based formulas applied to about two-thirds of
the full-time employees covered by defined benefit pension
plans (table 74). Such formulas pay a percent of the em-
ployee’s annual earnings per year of service (for example,
1.5 percent of earnings times 30 years of service, or 45 per-
cent of annual earnings).

While earnings-based formulas are widespread, varia-
tions are common in the approach to calculating annual
earnings and the rate paid per year of service. For a large
majority of participants with earnings formulas, pensions
were based on earnings in the final years of employment
(terminal-earnings formula); for the remainder, an aver-
age of career earnings was used (career-earnings formula.)

Participants with terminal-earnings formulas typically
had earnings defined as the average over a 5-year period
(table 75). Such formulas usually designated the 5 consec-
utive years with the highest earnings out of the last 10
years before retirement.

Formulas based on terminal earnings usually provided
full-time participants with a flat percent of earnings per
year of service. These flat rates generally ranged from 1 to

2 percent of earnings and averaged 1.65 percent per year of «

service,

A large majority of participants in plans with formulas
based on career earnings had benefit formulas that varied
according to service, earnings, or a combination of factors.
For example, a plan will 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.
The annual pension payment is the sum of these credits.
‘Where career-earnings formulas specified a uniform per-
cent for each year of service, the average was 1.52 percent.

70

It is difficult to judge whether terminal- or career-earn-
ings formula plans provide the more generous pension
payment, because different variables go into computing
benefits. For example, calculated average earnings will
generally be lower under career-earnings formulas,” but
these benefits are less likely to be offset by a retiree’s Social
Security payments. (See next section.) In addition, al-
though the average flat rate per year of service differed
only slightly between formulas, terminal-earnings formu-
las imposed a maximum on years of service to be included
in calculating benefits much more often than career-earn-
ings formulas. (See maximum benefits, below.)

The earnings that are used in computing both terminal-
and career-earnings formula pension benefits are very sim-
ilar. Most participants were in plans that included only
“basic” earnings, that is, straight-time earnings. Other
participants had additional earnings included in the bene-
fit calculation, such as overtime pay and shift differentials.

Most plans that did not use a percent-of-earnings bene-
fit formula specified a dollar amount to be paid for each
year of service, such as $20 monthly, which, after 30 years
of service, yields a pension of $600 a month ($20 times 30).
Dollar-amount formulas applied to nearly one-fifth of
pension plan participants. While the dollar amount in
these formulas sometimes varied with an employee’s earn-
ings or service, the predominant method was to multiply a
uniform (single) dollar amount by years of service. Uni-
form dollar amounts credited per year averaged $27.60 a
month.

Two additional types of defined benefit pension plan
formulas accounted for the remaining participants. Per-
cent-of-contribution formulas, which specify a periodic
contribution by an employer, and occasionally by an em-
ployee, to a plan, accounted for one-tenth of the pension
participants in small establishments. Such formulas are
common in multiemployer plans covering full-time em-
ployees in small establishments in such industries as con-
tract construction and trucking. Benefits under percent-
of-contribution formulas are a percent of total
contributions, for example, 1 percent of total contribu-
tions per month. If career contributions totaled $40,000,
monthly pension benefits would equal $400. (See chapter
7)

The final type of plan, cash account pension plans, speci-
fy an employer contribution and guarantee a rate of inter-
est on that contribution. Benefits are based on the value of
each employee’s account balance at retirement. While
both percent-of-contribution and cash account pension
formulas have features that resemble defined contribution
plans, the fact that a certain level of benefit is guaranteed

29 An employee who worked 30 years with a 5-percent pay increase
‘each year and who earned $25,000 in the last year of service would have
career average earnings of $13,451 a year, while the final 5-year average
would be $22,730. The difference between the career and final averages
lessens with shorter periods of service.



|
i
|

Table 30, Long-term disability insurance:. Percent of full-time participants with benefits based on percent of earnings formula
by maximum monthly benefit, small establishments, 1990

Total Maximum monthly benefit No
Type of payment Total | with maxi-
yl maxi. | $1500 | $1501- | $2001- | $2501- | $3001- | $3501- | $4001- | $5001- | $7501- | $10,001] mum
mum! -j+or less | $2000 | $2600 | $2000 ; $3500 | $4000 | $5000 | $7500 | $10,000) or more |payment
All participants
Total. 79 7 8 9 12 2 4 18 "4 10 2 at
Fixed percent of earnings 93 7 7 5 9 12 4 18 "1 10 1 16
Less than 50 percent 2 2 1 ro) - - - - - - - fy
50 percent 8 5 ® te) 2 - 1 e® 1 1 ro) 3
55 percent 1 = - - - ~ - - - - - 1
60 percent 64 56 4 3 5 10 2 2 13 9 7 1 8
65 of 67 percent 7 14 2 2 1 1 1 3 1 3 Q 3
70 percent... 1 1 - - - 1 - - oy 8 - 6 -
More than 70 percent io) - - - - - - - - - - ®
Percent varies by earnings ...... 7 2 - i) - - - - - @ . 1 5
Percent varies by service io) ie) - - - - - - 0 - - - (o
Professional, technical, and
related
Total... 82 9 5 5 14 1 2 19 12 4 3 18
Fixed percent of earnings 1 80 9 5 5 14 1 2 19 12 1 1 n
Less than 50 percent .. 2 2 2 @ - - - - - - - . .
‘50 percent 6 4 - 1) 2 - ig) 1 (7) 1 1 @ 2
55 percent 1 - - - - - - - - - - - 1
60 percent 61 56 5 4 3 "4 1 1 14 10 6 1 5
65 or 67 percent .. 19 16 2 1 1 1 - 1 5 1 5 @ 3
70 percent 2 2 - - - 1 - - iv) ie) - @ -
Percent varies by earnings ..... 8 2 - - - - - - - - - 2 6
Percent varies by service .. o) o) - - - - - - (3) - - - °

See footnotes at end of table.

31



Table 36. Medical care benefits: Percent of full-time participants by coverage for selected categories of care, small

establishments, 1990—Continued

Care provided
Category of medical care Total Subject to | Subject to | Subject to Cara 04 Pro>
All Covered in full | internal limits | overall imits | internal and
only? only? overall limits
Clerical and sales
Hospital room and board 100 100 13 2 59 25 -
Hospitalization—miscellaneous
services* ... 100 100 13 2 59 25 -
Extended care facili 100 84 4 12 13 55 16
Home health care® 100 82 13 7 7 45 18
Hospice 100 53 4 6 at 23. 47
Surgery
Inpatient 100 100 22 iv) 11 7 -
Outpatient 100 100 26 iv) 65 9 -
Physician visits
tn hospital 100 4100 15 ) 72 12 -
Office 100 100 4 1 79 6 -
Diagnostic X-ray and laboratory 100 100 20 1 69 TT -
Prescription drugs—nonhospital 100 97 2 a 64 " 3
Mental health care
{n hospital 100 98 2 14 9 74 2
Outpatient 100 96 iy) 16 1 78 4
Alcohol abuse treatment
Inpatient detoxification® 100 97 13 7 63 3
Inpatient rehabilitation’ 100 7 iv) 1 8 87 23.
Outpatient rehabilitation’ 100 72 1 14 6 52 28
Drug abuse treatment
Inpatient detoxification’ 100 94 4 13 14 62 6
Inpatient rehabilitation® 100 73 1 1 5 56 27
Ouipatient rehabiltatio 100 68 1 13 4 50 32
Production and service
Hospital room and board 100 100 13 3 58 25 -
Hospitalization—miscellaneous
services* 100 100 13 3 58 25 -
Extended care facility 100 82 5 W W 55 18
Home health care® 100 5 13 8 15 40 25
Hospice 100 50 3 5 20 22 50
100 100 23 v) 68 9 -
100 100 27 O 64 8 -
100 100 7 1 69 13 -
100 100 6 "1 75 8 (a)
ray and laboratory 400 100 at 1 66 1 -
Prescription drugs—nonhospital 100 95 2 18 65 9 5
Mental health care
In hospital. 100 98 1 7 8 71 2
Outpatient 100 98 v) 7 1 78 4
Alcohol abuse treatment
inpatient detoxification® 100 97 8 13 13 65 3
Inpatient rehabilitation® 100 78 1 11 6 60 22
Outpatient rehabilitation® 100 72 1 13 4. 55 28
Drug abuse treatment
inpatient detoxification® 100 94 5 14 aR) 64 6
Inpatient rehabilitation® 100 73 1 12 3 57 27
Outpatient rehabilitation’ 100 68 1 12 2 53 32

* For all but vision care, percents include employees who elected to
waive participation in their employer's medical program but who enrolled in
dental and/or vision plans.

® Internal limits apply to individual categories of care, e.g., separate
limits or benefits for hospitalization. Limits may be set in terms of dollar
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 serv-
ices are rendered.

* Overall limits are expressed only in terms of total benefits payable un-
der the plan, rather than for individual categories of care. Limits are set
as deductibles, coinsurance percentages, and overall dollar limits on plan
benefits.

* Services provided during a hospital confinement.

43

® Some plans provide this care only to a patient who was previously
hospitalized and is recovering without need of the extensive care provided
by a generat hospital.

® Less than 0.5 percent.

7 Charges incurred in the outpatient department of a hospital and out-
side of the hospital.

* Detoxification is the systematic use of medication and other methods
under medical supervision to reduce or eliminate the effects of substance
abuse.

* Rehabilitation is designed to alter abusive behavior in patients once
they are free of acute physical and mental complications.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 43. Medical care benefits: Percent of full-time
participants in plans with hospital room and board coverage
by type of benefit payments, small establishments,

1990

Profes-
sional, | Clerical | Produc-
‘All par. | techni- | and | tion and
Type of payment tick be tg| Cah and} sales | service
ipants | related | partici- | partici
partici- | pants | pants
pants
Total... 100 | 100 | 100 | 100
Full semiprivate rate! at 25. 20 19
Full semiprivate rate for limited
period, then percent of semiprivate|
rate 15 16 16 4
80 percent 14 16 14 13
85 percent e ® 1 6
90 percent 1 i) 1 1
95 percent ro) _ - 6
Other . is) i) - ie)
Percent of semiprivate rate 62 58 63 63
80 percent 49} 43 51 51
85 percent 1 1 1 1
90 percent 8 1 8 7
95 percent @ io) 0 ie)
Other . 2 4 2 2
Varies 1 1 1 2
Percent of semiprivate rate for
limited period, then overall
coinsurance provisions co) 1 i) )
Daily dollar allowance .. o) - °Q 0
Daily dollar allowance, plus percent
of additional charges 2 1 2 3

* Includes full service benefits provided by health maintenance organi-
zations or preferred providers.
? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal: to-
tals. Where applicable, dash indicates no employees in this category.

Table 44. Medical care benefits: Percent of full-time
participants in plans with inhospital surgical benefits by
type of payment, small establishments, 1990 .

Pro-
Pro-
shang, | Cler- | duce
Ail itechni) 28 | fon
Type of payment partici-| cal, | 2 ant
pants | and sas serv:
related] artic) ice
partic: | Pants | partici
pants pants

Total 100 | 100 | 100

Full usual, customary, and reasonable

charge’ 23 | 25 | 22 | 23

Full usual, customary, and reasonable
charge up to a specified amount, plus
percent of additional charges

Full usual, customary, and reasonable

charge up to a specified amount .. 7) ea ro) fe}

Percent of usual, customary, and
reasonable charge:
80 percent
85 percent
90 percent ..
Other percent’.

g

evi
@

8
eonk

Son

Percent of usual, customary, and
reasonable charge plus percent of
additional charges based on plan's
coinsurance rate

©9;ea!]oea

Dollar allowance per procedure, plus
percent of additional charg
80 percent
Other percent

3
3
na

co) 1), @

Dollar allowance per procedure

* Includes full service benefits provided by health maintenance or-
ganizations or preferred provider organizations.

? Less than 0.5 percent.

* Includés plans with overall benefit limitations, such as maximum
dollar amounts and deductibles, where the coinsurance rate is 100 per-
cent.

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



Table 37. Health care benefits: Percent of full-time participants by arrangement for payment to providers and type of

financial intermediary, small establishments, 1990

A piticlpants Professional, technical, and] Clerical and sales Production and service
Fee arrangement and financial related participants participants participants
intermediary Medical | Dental | Vision | Medical | Dental | Vision | Medical) Dental | Vision | Medical! Dental | Vision
care’ care care care" care care care’ care care care’ care care
Total 100 | 100 | 100 | too | 100 | 100 | 100 | 100 } 100 | 100 | too | 100
Traditional fee-for-service ... 7 | 85 | 78 | 69 | 86 | 78 | 77° | 88 | 66 | 73 | 82 | 79
No intermediary-selt
insured 2s | sa | a5 | ar | 3a | 40} a7 | 41 | 33 | 25 | 35 | 34
Commercial insurance company| 25 | 30 | 19 | 24 | 32 | 18 | 26 | 31 | 18 | 24 | 20 | 49
Blue Cross-Blue Shield 24 13 9} 2 | 11 to | at | to | 2 | 14 8
Independent organization i¢) 9) - 7) 0 > (7) 1 - e - -
Medical or dental sociaty - 3] wi] - 2| 1 - 3 5 | - 3 | 16
Other .. 19) @ 1 iv) - - - - - 1 iv) 1
Combined 2/1 0 - 2| @ - 3 1 - 1/06 -
Preferred provider organization‘ 8 7 s | 16 8 4 | 43 6 s | 1 6 6
No intarmediary--selt
insured? .. 3 3 4 3 4 2 3 3 3 4 2 4
Commercial insurance company | 6 11 @ 9 2 2 7 2 1 5 | a -
Blue Cross-Blue Shield 3 1 - 4 1 - 3 i] - 3 1 -
independant organizati 0) 1 - ) - - 0 | 6 - 0) 1 -
Medical or dental society 6 1 1 ~ 2 1/0 1 2/ 0 1 2
Prepaid health maintenance
‘organization? 14 7 | 13] 16 6 | 1 | 10 4] wl 15 9 9
No intermediary--selt
insured? is) - 1 - (a) i) - = (a) - -
Commercial insurance company| 2 1 2 1 4 1 1/1 6 2 2| -
-Blue Cross-Blue Shield .. 1 - 1 - 2 1 - 3 1 - 2
Independent organization 10 6 12 5 9 8 3 14 " 8 5
Medical or dental society - - - - ) - - 0 - - -
Combined e) - i) - - iv) - - e - 2
Other... - 2 7 - 1) 2 - 2 " - 2 6

Plans providing services or payments for services rendered in the
hospital or by a physician.

? “includes plans that are financed on a pay-as-you-go basis, plans fi-
nanced 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 com-
smercial carrier through Administrative Services Only-Minimum Premium
Plan (ASO-MPP) contracts and. plans in which.a commercial carrier pro-
vides protection only against extraordinary claims.

® Less than 0.5 percent.

* 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.

* Includes federally qualified (thlose meeting standards of the Health
Maintenance Organization Act of 1973, as amended) and other HMOs
delivering comprehensive health care on a prepayment rather than fee-
for-service basis.

® Includes exclusive provider organizations, which are groups of hos-
pitals and physicians that contract to provide comprehensive medical
services. . Participants are required to obtain services from members of
the organization in order to receive pian benefits.

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

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}



for capital accumulation purposes. Retirement plans, as
defined in this study, do not allow withdrawal of employer
contributions until retirement age, death, disability, sepa-
ration from service, age 59’ , or hardship. Capital accu-
mulation plans, on the other hand, impose less stringent
restrictions for withdrawal of employer contributions, for
example, permitting one or two withdrawals per year, or
withdrawal after 2 or 5 years of service.>?

Defined contribution retirement plans covered just over
one-fourth of the employees covered by the 1990 survey.
Taken together with participants in defined benefit pen-
sion plans (which, as described earlier in this chapter, are
always for retirement purposes), two-fifths of the full-time
employees covered by the survey participated in at least
one retirement plan.

Defined contribution plans may also be classified by
type of plan (table 78). The survey provided data on the
following types: Profit-sharing plans (15 percent); savings
and thrift plans (with 10 percent of employees participat-
ing); and money purchase pension plans (6 percent). Em-
ployee stock ownership plans, simplified employee pen-
sion plans, and stock bonus plans were rarely found.*?
Plans that allowed the purchase of company stock below
the market price (stock purchase plans), or that allowed
the purchase of stock in the future at a designated price
(stock option plans) also were rare. Savings and thrift
plans, money purchase pension plans, and profit-sharing
plans were all more common among white-collar workers
than blue-collar workers.

Nearly three-fifths of participants in defined contribu-
tion retirement plans had all contributions to these plans
made by the employer. A large majority of contributory
plans were savings and thrift plans, which involve employ-
er matching of employee contributions.

Cash or deferred arrangements

Plans with a cash or deferred arrangement covered one-
sixth of the full-time employees in the 1990 small establish-

32 It should be noted that most defined contribution plans can be used
both to provide retirement income or to accumulate financial assets.
Capital accumulation plans may provide retirement income because
withdrawals of the employer's contributions are voluntary, not manda-
tory. Similarly, pre-retirement access to accumulated assets from de-
fined contribution retirement plans is frequently possible. These plans
nearly always permit preretirement withdrawals of the employer's con-
tributions (for example, at age 59!/2, upon termination of employment
prior to retirement, or upon disability). Many of these plans also permit
employees to receive a lump sum, rather than an annuity, upon retire-
ment.

33 4 money purchase pension plan provides for a pension annuity or
other form of retirement income that is determined by fixed contribution
rates plus earnings credited to the employee’s account. A stock bonus
plan is a plan whereby the employer or the employee and the employer
jointly contribute to a trust fund that invests in various securities. Em-
ployee stock ownership plans are generally wholly employer financed,
and are designed to distribute company stock periodically to employees.
Simplied employee pension plans are arrangements under which estab-
lishments with 25 or fewer employees set up employer-financed ac-
counts, similar to individual retirement accounts (iRA’s), for eligible em-
ployees. Employee may elect to make voluntary contributions. Savings
and thrift and profit-sharing plans are described later in this chapter.

B

ment survey (table 79). These arrangements, also known
as 401(k) plans, allow participants to choose between re-
ceiving currently taxable income or deferring taxation by
placing the money in a retirement account. Cash or def-
erred arrangements took the form of either salary reduc-
tion plans, deferrals of profit-sharing allocations, or man-
datory regular contributions to a pension plan on a pre-tax
basis,

Salary reduction plans allow employees to contribute a
part of their earnings to a retirement plan, and defer in-
come taxes on those contributions and their earnings until
they are withdrawn from the plan. Such contributions are
referred to as “employee elective deferrals” or “pretax
contributions.”

Deferrals of profit-sharing allocations provide. em-
ployees with the choice of receiving an employer's profit-
sharing contribution immediately in cash, or deferring the
contribution and postponing taxation until distribution.
Such arrangements were rare, as were pension plans that
allowed employees to make required contributions on a
pretax basis.

Salary reduction features, more common among white-
collar employees than among blue-collar employees, were
available through several types of defined contribution
plans. The most common vehicle for pretax savings was a
savings and thrift plan, accounting for two-thirds of par-
ticipants. The remainder generally could make salary re-
duction contributions through a profit-sharing plan or a
freestanding plan, that is, a plan set up for employee salary
reduction with no employer contribution.

From a different perspective, two-fifths of all partici-
pants in defined contribution plans could make voluntary
salary reduction contributions to their plan. While nearly
all participants in savings and thrift plans could make such
contributions, fewer than one-fifth of those in deferred
profit sharing plans and virtually none in money purchase
plans had this option.

Savings and thrift plans

Savings and thrift plans covered 1 in 10 full-time em-
ployees. Under these plans, employees contribute a prede-
termined portion of earnings to an account, all or part of
which is matched by the employer. Contributions are in-
vested in various vehicles, such as stocks, bonds, and
money market funds, as directed by the employee or em-
ployer, depending upon the provisions of the plan. Al-
though usually designed as a long-term savings vehicle,
savings and thrift plans allow withdrawals for specified
conditions (such as medical and educational expenses).
Withdrawals are taxable as current income to the recipi-
ent, and may be subject to a penalty imposed by the plan.

Savings and thrift plans allow employees to choose from
a range of possible contribution rates. A plan, for example,

34 For freestanding 401(k) plans, participants were those workers ac-
tually making pretax contributions. For other plans, participants were
those workers in plans offering cash or deferred arrangements, whether
or not workers actually made pretax contributions.



Table 81. Plan financing: Percent of full-time participants in selected employee benefit programs. by source of financing,

‘smail establishments, 1990

Sickness and | Long-term , Defined
orgie Medical care | Medical care | Dental care | Dental care |,
accident disability < Life insurance} benefit
insurance | insurance | fr employee | for family | for employee | for family pension
All participants
100 100 100 100 100 100 100 100
64 84 58 33 58 37 83 95
36 16 42 67 42 63 7 5
Professional, technical, and
related
Total 100 100 100 100 100 100 100 100
Wholly employer financed 87 85 57 28 51 28 87 ot
Partly employer financed 43 15 43 2 49 72 13 9
Clerical and sales
Total 100 100 100 100 100 100 400 400
Wholly employer financed 60 84 53 30 55 34 85 94
Partly employer financed 40 16 47 70 45 66 15 6
Production and service

Total 100 100 100 100 100 100 100 100
Wholly employer financed 69 84 61 37 65 45 79 96
Partly employer financed 3t 16 39 63 35 55 21 4

Table 82. Fiexible benefits plans and reimbursement
accounts:' Percent of full-time employees eligible, small
establishments, 1990

Profes-
sional, | Clerical | Produc-
All efigi-| techni- | and | tion and

Coverage ble em-| cal, and} sales | service
ployees | related | employ- | employ-
employ-| ees |. ees

ees

Total 100 | 100 | 100

Provided flexible benefits and/or
reimbursement accounts.

Flexible benefits plan with
reimbursement accounts ...

Flexible benefits plan with no
reimbursement accounts

Freestanding reimbursement

accounts 6 W 7 4
Not provided flexible benefits or
reimbursement accounts .. 92 87 91 95

* Flexible benefits plans, also known as flexible compensation and
cafeteria plans, allow employees to choose between two or more benefits
or benefit options -- cash may be one of the options ~- in determining their
individual benefit packages. Reimbursement (flexible spending) accounts,
which are used to finance benefits or expenses unpaid by insurance or
benefit plans, may be part of a flexible benefits program or stand alone
(freestanding accounts). These accounts may be financed by the em-
ployer, employee, or both. The employee contribution is usually made
through a salary reduction arrangement.

® Less than 0.5 percent.

NOTE; Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

83



coverage treated the same as those for drug abuse treat-
ment. Benefits provided under substance abuse care in-
cluded both detoxification and rehabilitation. Detoxifica-
tion involves supervised care by medical personnel
designed to reduce or eliminate the symptoms of chemical
dependency. Rehabilitation is designed to provide a vari-
ety of services intended to alter the behavior of substance
abusers. Such services are generally provided once detoxi-
fication has been completed.

While virtually all participants covered by alcohol
abuse treatment benefits were eligible for inpatient (in-
hospital) detoxification, four-fifths received inpatient re-
habilitation coverage. (Detoxification is generally consid-
ered medically necessary, and thus it is included in nearly
all medical plans. There is a greater tendency to exclude
inpatient rehabilitation, because it requires less constant
and less immediate care.) Outpatient alcohol abuse treat-
ment, generally rehabilitative care, was available to three-
fourths of participants with alcoholism coverage. Cover-
age patterns were similar for drug abuse treatment
benefits.

As was true with mental health care, plans were more
restrictive in covering substance abuse treatment than oth-
er illnesses.!” Participants were more than twice as likely,
however, to have inpatient detoxification treated the same
as any other inpatient confinement (28 percent) than to
have inpatient rehabilitation covered the same as any other
illness (11 percent). Six percent of the participants with al-
coholism treatment coverage had outpatient care treated
the same as other conditions.

Specific limitations for substance abuse treatment most
commonly included restrictions on the number of days of
inpatient hospital care per year, the number of outpatient
visits per year, reduced coinsurance levels for outpatient
treatment, and maximum dollar amounts per year or per
lifetime. A typical limitation on inpatient care was 30 days
per year. Similarly, outpatient care might be restricted to
20 or 30 visits per year. Dollar maximums were often com-
bined between inpatient and outpatient care, with $50,000
per lifetime a common limit. Finally, limitations on days
and dollars were often combined for alcohol and drug
abuse care."

Health maintenance organizations

Health maintenance organizations provide a fixed set of
medical benefits for a prepaid fee. The survey tabulated the
details of three categories of medical care provided by

17 The designation of substance abuse coverage as more restrictive
than that for other illnesses results from a comparison of types of cover-
age. For instance, if a plan limits inpatient substance abuse care to 30
days per year but the limit on inpatient care of any other type of iliness is
greater than 30 days per year, that plan contains separate, more restric-
tive, limits.

18 For more detailed discussion of employer-provided ‘substance
abuse coverage, see Marc E. Kronson, “Substance Abuse Coverage Pro-
vided by Employer Medical Plans,” Monthly Labor Review, April 1991,
pp. 3-10,

38

HMO’s—physicians’ office visits, out-of-hospital prescrip-
tion drugs, and extended care facilities. For physicians’ of-
fice visits, the majority of HMO participants were required
to pay a copayment, typically $5 or greater per visit, before
treatment was received. Most of the remaining partici-
pants received coverage in full. In general, HMO’s did not
limit the number of physicians’ visits.

Out-of-hospital prescription drug benefits were nearly
universally available to HMO participants; and two-thirds
had to pay a copayment per prescription, commonly be-
tween $3 and $7. Finally, extended care treatment facility
benefits were also almost always provided to HMO partici-
pants, most commonly with a limit on the number of days
for which care was available.

Cost containment

In addition to data on the extent of coverage for specific
medical services, the survey looked at the availability of
medical plans with either benefit management programs,
managed care plans, or review boards. The goal of these
programs is to make sure that the services rendered are
medically necessary and provided in the most appropriate
health setting. These programs developed at least partly in
response to the rapid rise in medical care costs during the
1980's.

Some advanced managed care programs can consist of
four or more features: pre-admission review of all hospital
admissions for non-emergency’ or non-maternity care,
concurrent review to monitor care while hospitalized, dis-
charge planning to coordinate a continued course of treat-
ment in more appropriate health care settings, and manda-
tory second surgical opinions for certain selected
procedures.

Among the features studied in 1990, about one-fourth
fee-for-service participants had their care subject to utili-
zation review, compared to three-tenths of preferred pro-
vider organization participants (table 51). Utilization re-
view is the process of reviewing the appropriateness and
quality of care provided to patients. More generous benefit
provisions for prehospitalization testing, a means of de-
creasing the length of hospitalization, covered one-half of
the fee-for-service participants and slightly more than one-
half of preferred provider organization enrollees.

“Some managed care programs may consist of only one
or two cost containment provisions, such as mandatory
second surgical opinions and pre-admission certification.
Three-fifths of the fee-for-service participants were re-
quired to get pre-authorization certification before being
admitted to a hospital. Less common cost containment
features in fee-for-service plans included incentives for the
employee to audit hospital bills and incentives for child de-
liveries in lower cost birthing centers, rather than in hospi-
tals.

Increasingly, health maintenance organizations may re-
quire a separate deductible for hospital admission to dis-
courage unnecessary hospitalization. These deductibles



Preface

This bulletin presents results of a 1990 Bureau of Labor
Statistics survey of the incidence and detailed provisions of
selected employee benefit plans in small private establish-
ments. It is the Bureau’s first survey of benefits in small
establishments and provides representative data for 40.8
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 1990 Employee Benefits Survey reports on benefits
provided to employees in establishments with fewer than
100 workers in all private nonfarm industries. The
publication of these data represents the last major step ina
planned expansion of BLs employee benefits data. Between
1979 and 1986, the survey provided benefits data on
full-time 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
full-time employees in State and local governments with
50 employees or more. In 1988 and 1989, expanded
surveys of medium and large establishments covered
full-time employees in establishments employing 100
workers or more in all private industries.

Beginning with the data published in this bulletin, the
Employee Benefits Survey will provide data on both
full-time and part-time employees in all private industries
and State and local governments. Later this year, data will
be available from the 1990 survey of State and local
government employees. The results of the 1991 survey of
employees in medium and large private establishments
will be published in 1992. In future years, small private
establishments and State and local governments will be

surveyed in even-numbered years, and medium and large
private establishments will be surveyed in odd-numbered
years.

Data for this bulletin were compiled and analyzed in the
Division of Occupational Pay and Employee Benefit
Levels by Cathy Baker, Michael Bucci, Thomas Burke,
Edward Coates, Jason Ford, Avy Graham, Douglas
Hedger, Stephanie Hyland, Rita Jain, Natalie Kramer,
Marc Kronson, Michael Miller, David Ott, Laura Scofea,
Patrick Seburn, Margaret Simons, Cynthia Thompson,
Jerline Thompson, and Arthur Williams, under the
direction of Allan Blostin, James Houff, and John Morton.
Text was prepared for publication by Mahin Besharat.

Computer programming and systems design were
provided by David Caples, Mary Constable, Mohamed
Elzein, Aholivah Maier, Cheryl Sims, and Edward
Thomas of the Division of Directly Collected Periodic
Surveys, under the direction of Leslie Chappel. Larry
Huff, Thomas Kelly, and Ronald. Lambrecht of the
Statistical Methods Group (Office of Compensation and
Working Conditions) were responsible for the sample
design, nonresponse adjustments, sample error compu-
tations, and other statistical procedures, under the
direction of Chester Ponikowski. Fieldwork for the survey
was directed by the Bureau’s Assistant Regional
Commissioners for Operations.

Material in this publication is in the public domain and,
with appropriate credit, may be reproduced without
permission.

Pictured on the cover of this bulletin is The
Watchmaker by Norman Rockwell (c) 1948, The Norman
Rockwell Family Trust.

|
{



Table 61. Dental care benefits: Percent of full-time
Participants in plans with orthodontic benefits by lifetime
maximum amount of coverage, small establishments, 1990

Table 62: Dental care benefits: Percent of full-time
participants by provision for preauthorization of treatment,

‘smail establishments, 1990

Protes- Profes-
sional, | Clerical | Produc- sional, | Clerical | Produc-
At par- | teehnis | and | tion and ‘All par- | techni. | and tion and
Dollar amount’ tieipants| #4 and] sales | service Iter ticipants | 2! and| sales | service
related | partici- | partici- related | partici- | partici
partici | pants | pants partici | pants | pants
pants pants
Total 100 | 100 | 100 | 100 Total 100, 100/100) _~— 100
Lifetime maximum specified 78 85 78 m4 Preauthorization required 87 62 58 52
Less than $500 e e = ® -
. 5 6 3 5 Minimum expense requiring
3 3 5 1 reauthorization:
7 15 15 19 $ 10 13 "1 7
2 2 3 @ $101 - $199 .. 13 16) 4 14
38 46 38 33 $200 12 12 14 "1
2 1 1 4 Greater than $200 17 18 18 16
9 12 "1 7 Dollar amount not determinab! 4 2 4 5
3 1 3 5
Preauthorization not required . 4a] 38) 42 48
No tifetime maximum 22 15 22 26

" Coverage for dental procedures may also be subject to scheduled al-
fowance, deductible, or coinsurance provisions in addition to maximum dal-

lar limitations.
? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

61

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 41. Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
total annual deductible.and maximum out-of-pocket expense,
‘small establishments, 1990

Table 42, Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
maximum benefit provisions, small establishments,

1990

Profes- Profes-
sional, | Clerical | Produc- sional, | Clerical | Produc-
techni | and | ti techni- | and | tion and
: All par- Type and dollar amount of. | All par-
Dollar amount Jeipoats| Cal and] sales al cal; and] sales | service
ticipants| ‘Stated partic maximum’ ticipants| elated partici
Partici- | pants partici- ants
pants pants
Total... 100 | 100.| 100 | 100 100 | 400 | 100°} 100
Plan specifies annual deductible and, With maximum limits 73 69 ” %
out-of-pocket maximum? 85 87 88 82
$300-8499 2 2 2 2 Lifetime maximum only . 69 67 69 70
$500-$699 19 | 24 2 16 Less than $100,000 1 - 1 1
$700-$899 9 9 8 10 $100,000 .. 1 a 2 2
$900-$1,099 10 10 hl 9 $100,001-$249,999 .. @ @ iv) ie)
$1,100-$1,29 25 24 25 25 0,000 .. 7 6 7
$1,300-$1,49: 2 2 2 2 $250,001-$499,989 . - e @ io)
$1,500-$1,699 ... 7 5 8 7 $500,000 4 2 4 8
$1,700-$1, 891 2 1 2 2 $500,001 1 ie) 1 1
$1,900-$2,099 2 2 1 3 $1,000,000 50 53 49 48
$2,100 and greater . 7 8 7 6 More than $1,000,000 .. 5 5 6 5
Based on earnings i) 1 i) i)
Annual or disability maximum
Deductible not on an annual basis...) 4 3 2 6 only 3 2 2 5
Plan does not specify maximum Both lifetime and annual or
annual out-of-pocket expense: "1 10 9 12 disability maximums ie} © fe re
' Total amount of deductible and outof-pocket maximum is for aach in- Other mesdenum .. O97, a] oa) o
sured person. In some plans, the individual and family deductibles @© — Watout maximum lit. or 31 29. 28

* Under federally qualified HMOs, there is a limit on the amount of
copayments the participant must pay, equal to a percentage of the total
premium. These plans were excluded from the computation of the out-of-
Pocket dollar limits. -

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

47

‘ Maximum described is for each insured person. Where the maximum
differed for employees and dependents, the employee maximum was tabu-
lated.

? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table A-1. Number of establishments and full-time occupational quotes studied and estimated number of full-time workers
within scope of survey, small establishments, United States, 1990

Number of occupational quotes studied?
‘sion® Number of establish-
Industry division ments studied Total Professional, techni-| Gieical and sales | Production and
cal, and related service
All industries 2,016 5,874 1,283 2017 2,274
Manutacturing 208 716 101 116 499
Nonmanufacturing 1,808 4,858 1,182 1,901 1,775
Mining 26 81 6 1 64
Constr 191 571 96 125 350
Transportation, communication:
electric, gas, and sanitary services 142 393 63 125 205
Wholesale trade .. 308 1,004 146 479 379
Retail trade .. ai? 946 79 483 404
Finance, insurance, and real estat 233 607 243 325 39
ces 491 1,256 549 373 334
Estimated number of full-time workers within scope of survey
All industries 32,465,564 5,695,930 10,455,187 16,814,448
Manufacturing 4,825,909 588,096 662,464 93,575,349
Nonmanufacturing 27,639,655 5,107,833 9,792,728 12,739,099
Mining 254,243 10,210 14,718 229,316
Construction 9,244,019 271,986 921,055 2,650,977
Transportation, communications,
electric, gas, and sanitary services 1,645,554 181,596 483,491 980,467
Wholesale trade .. 4,092,094 543,267 2,000,528 1,548,299
Retail trade 6,498,963 400,880 2,506,926 3,591,157
Finance, insurance, and real estate .| 2,498,963 665,339 1,817,166 316,458
Services . 9,405,820 3,034,555 2,948,838 3,422,426
* As defined in the 1972 edition of the Standard industrial Classitica- they provided data for all items studied. See the section on survey re-
tion Manual, U.S. Office of Management and Budget. Industry data are sponse.
shown for informational purposes only and are subject to larger than nor-
mal sample error. See section on reliability of estimates. NOTE: Because of rounding, sums of individual items may not equal
® ‘These figures refer to all respondents to the survey, whether or not totals.

96



Table. 21.:.Paid ‘sick leave:.-Percent of full-time employees by sick leave provision, small establishments, 1990
Profes- Profes-
sional, | Clerical | Produc- sional, | Clerical } Produc-
Allem- | techni} and tion and ‘Allem. | techni-) and | tion and
Sick leave policy’ cal, and| sales | service Sick leave policy! ‘ cal, and| sales | service
Ployees | related | employ- | employ- Ployees | related | employ- | employ-
employ-| ees | ees employ-| ees | ees
ees ees
Total 100 | 100 | 100
At 10 years of
Provided paid sick leave? 47 70 61 29 service —Continued
: . 60 and under 120 days . 1 2 2 0)
Sick leave provided 120 days or more 1 2 1 ro)
annually" 43 65 56 27
: At 15 years of service:
Ab1 year of servict Under 5 days .. 5 4 4 5
Under 5 days .. 5 4 5 6 5 and under 10 days . at a7 28 15
5 and under 10 days 22 29 30 14 10 and under 15 days rT 24 14 4
10 and under 15 days 1 23 14 4 15 and under 30 days 2 4 3 2
15 and under 30 days 2 4 3 2 30 and under 60 days 1 is) 1 o)
30 and under 60 days 1 2 1 ro) 60 and under 120 day: 1 3 2 1
60 and under 120 days ) 1 Q tu) 120 days or more 4 2 2 i)
120 days OF MOTE eux ie) a, 0 ~
At 20 years of service:
‘At 3 year of service: Under 5 days 5 4 4 5
Under 5 days ... 5 4 4 5 5 and under 10 days a4 27 27 18
5 and under 10 days .. 21 28 28 15 10 and under 15 days tt 24 14 4
10 and under 15 days 11 | 24 14 4 15 and under 30 days 2 4 3 2
18 and under 30 days 3 4 4 2 30 and under 60 days 1 a) 1 Q
30 and under 60 days 1 1 3 i) 60 and under 120 days 1 2 2 i)
60 and under 120 days . 1 2 1 iv) 120 days or more 1 3 2 e)
120 days or more iv) 2 e) -
At 26 years of servi
At 5 years of servic: Under 5 days .. 5 4 4 5
Under § days 5 4 4 5 5 and under 10 days at 27 27 16
5 and under 4 at 27 28 15 10 and under 15 days .. 1 24 14 4
10 and under 15 days 1 24 14 4 15 and under 30 days .. 2 4 3 2
18 and under 30 days 3 4 4 1 30 and under 60 days . 1 0 1 i)
80 and under 60 days 1 1 2 1 60 and under 120 days 1 2 1 v)
60 and under 120 days 1 2 1 i) 120 days or more . 2 3 3 1
120 days or more 1 2 iv) 0)
‘Sick leave provided on a per
At 10 years of disability basis® 4 7 6 2
service:
Under 5 days 5 4 4 5 As needed basis” 1 2 i v)
5 and under 10 days . at 27 28 15
10 and under 15 days "4 24 14 4 Other basis .. ) e ) 7)
15 and under 30 days 2 4 3 1
30 and under 60 days 1 1 2 ©) Not provided paid sick leave .. 53 30 39 71

* Some plans grant sick leave at partial pay, either in addition or as
an alternative to full-pay provisions. 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.

* The total is less than the sum of the individual breakdowns be-
cause some employees had annual and per disability plans.

* Less than 0.5 percent,

* Employees earn a specified number of sick leave days per year.

21

§ Provisions were virtually the same after longer years of service.

* Employees earn a specified number of sick leave days for each ill-
ness or disability.

” Plan does not specify maximum number of days.

* Includes formal plans with provisions 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.



Chapter 3. Disability Benefits

This chapter discusses three types of disability benefits:
Sick leave, sickness and accident insurance, and long-term
disability insurance. Paid sick leave and sickness and acci-
dent insurance provide workers protection against loss of
income during temporary absences from work due to il-
Iness or accident. During more extended periods of dis-
ability, workers’ income may be continued through long-
term disability insurance plans.

Short-term disability protection through sick leave,
sickness and accident insurance, or both, was provided to
three-fifths of all full-time employees in the small estab-
lishments in 1990 (table 19). Sick leave usually provides
100 percent of the worker’s normal earnings, whereas sick-
ness and accident insurance usually replaces 50 to 67 per-
cent of pay.

Sick leave was provided to nearly half the full-time em-
ployees and sickness and accident insurance to one-fourth
of the full-time workers. An eighth of the workers had sick
leave plans coordinated with sickness and accident insur-
ance. Coordination can take two forms: Starting insurance
benefits after sick leave pay has ended, or paying both
benefits concurrently. When payments are made from
both sources, sick leave pay is reduced by the amount of
the insurance benefits so that the total benefit does not ex-
ceed full salary.

Regardless of the method of coordination, employers of-
fering sickness and accident insurance tended toallowfewer
sick leavedays than those without such insurance. At5 years
of service, for example, annual sick leave plans coordinated
with insurance granted an average of 7.5 days at full pay.
Plans not coordinated with insurance provided 13.3 days.

Long-term disability insurance (LTD), which typically
pays 60 percent of earnings, was provided to one-fifthiof
the full-time employees in small establishments in 1990.
LTD insurance payments usually begin after 3 or 6 months
of disability and continue until retirement age or for a spe-
cified number of months, depending on the worker’s age at
the time of disability. .

Paid sick leave and LTD insurance were more prevalent
among white-collar workers, while sickness and accident
insurance was more prevalent among blue-collar workers.

Paid sick leave

Of the employees covered by paid sick leave plans, 89
percent were allowed a fixed number of days per year (an-
nual sick leave plans). Five percent of the participants
were provided sick leave benefits for each illness (per dis-

7

ability plans). Most of the remainder were covered by both
annual and per disability benefits (tables 20 - 25). Em-
ployees receiving annual plans averaged 8.5 days at | year,
11.5 days at 5 years, 14.0 days at 15 years, and 14.9 days at
25 years,

Two-fifths of the employees covered by annual sick
leave plans were allowed to carry over and accumulate un-
used sick leave from year to year (cumulative plans). Ap-
proximately two-thirds of the employees in cumulative
plans had limits on the amount of sick leave that could be
carried over to the next year, typically between 10 and 100
days. The remaining workers in cumulative plans were al-
lowed to accumulate an unlimited amount of sick leave.

Noncumulative plans provided, on average, a greater
number of days per year than cumulative plans. At 3 years
of service, for example, noncumulative plans provided
10.8 days per year, while. cumulative plans provided 9.3
days per year. This difference increased at longer lengths
of service. For example, at 20 years of service, workers in
noncumulative plans averaged 17.1 days per year, while
workers in cumulative plans averaged 10.8 days per year.

Workers were often not immediately eligible for sick
leave benefits. Slightly over one-half of employees had to
meet length of service requirements before qualifying for
sick leave benefits. Three months was the most common
length of service requirement.

While sick leave is commonly thought of as replacing
lost income while an employee is ill or injured, the survey
found that a majority of workers could use their benefits
for other reasons. For example, using sick leave to take
care of a sick child (available to 46 percent of annual par-
ticipants), or to take care of personal business (23 percent)
were the most frequently observed provisions.

Sickness and accident Insurance

Sickness and accident insurance plans covered one-
fourth of full-time employees in small establishments, pro-
tecting them against income losses due to short-term dis-
abilities in 1990. Two-thirds of the participants had their
benefits fully paid by their employer. The remainder most
often paid a percent of earnings, up to a specified maxi-
mum contribution? (tables 26-28).

9 The prevalence of such contribution formulas is influenced in large
part by the mandatory sickness and accident insurance plans in New
‘York and New Jersey, discussed later in this chapter.



Bureau of Labor Statistics

Regional Offices

84 Franscg

ua

AMERICAN GAMO

REGION

woemtonco <2 9,
oso°F

vs

ving isLANos:

Region |

1 Congress Street, 10th Floor

Boston, MA 02114
Phone: (617) 565-2327

Region II
Room 808
201 Varick Street
New York, NY 10014
Phone: (212) 337-2400

Region Ill
3535 Market Street
P.O. Box 13309
Philadelphia, PA 19101
Phone: (215) 596-1154

Region IV
1371 Peachtree Street, N.E.
Atlanta, GA 30367
Phone: (404) 347-4416

Region V
9th Floor
Federal Office Building
230 S. Dearborn Street
Chicago, IL 60604
Phone: (312) 353-1880

Region VI
Federal Building
525 Griffin Street, Room 221
Dallas, TX 75202
Phone: (214) 767-6970

Regions Vit and VI
911 Walnut Street
Kansas City, MO 64106
Phone: (816) 426-2481

Regions IX and X
71 Stevenson Street
P.O. Box 193766
San Francisco, CA 94119
Phone: (415) 744-6600



Table 29. Long-term disability insurance: Percent of full-time participants by method of determining payment, small

establishments, 1990

Type of maximum provision

With maximum Without maximum
Method Total coverage Plan maximum | Disability income {Plan and disability) coverage
only! maximum only* | income maximum
All participants
All methods . 100 84 48 10 26 16
Fixed percent of earnings .. 87 78 47 6 26 8
Less than 50 percent 2 2 - - 2 to)
50 percent 8 6 a 2 1 2
85 percent 1 6 = iv) - iv)
60 percent 60 85 31 3 a1 5
65 or 67 percent 16 4 1 1 2 2
70 percent 1 1 1 - i -
More than 70 percent oy - - : . 6
Percent varies by earnings 6 2 1 1 o) 4
Percent varies by service iv) 6 i) iv) - -
Scheduled dollar amount varies by
earnings is) iv iv) Vv) - -
Other’ 4 3 - 3 - 1
Not determinable .. 2 - - - - 2
Professional, technical, and
related
All methods ... 100 88 86 8 24 12
Fixed percent of earings 88 89 84 6 24 5
Less than 0 percent 2 2 - - 2 -
50 percent 6 5 3 4 1 1
55 percent 1 @ - i) - 0
60 percent 59 87 37 3 7 2
65 or 67 percent . 18 7 13 1 3 2
70 percent 2 2 1 - 1 -
Percent varies by earnings .. 8 2 2 O) O) 6
Percent varies by service i) O) 0 0 - -
Scheduled dollar amount varies by
earnings @ 0 e (a) - -
Other 3 2 - 2 - 1
Not determinable ... 1 - - - - 1

See footnotes at end of table.

29



Table 51. Me

ai care benefits: Percent of full-time

participants in fee-for-service plans’ by coverage for
selected cost containment features, small establishments,

1990
Profes-
sional, | Clerical | Produc-
Aapar-| techni. | “and tion and
Cost containment feature | MP3" ical, and) sales | service
iP related | partici- | partici-
partici- | pants | pants
pants
Higher rate of payment for generic
Prescription drugs -.n. 15 13 19 14
Mail order drugs 6 7 6 6
No or limited reimbursement for
nonemergency weekend
admission to hospital .. 14 15 15 13
Separate deductible for hospital
admission 10 "1 8 1"
Incentive for prehospitalization
testing 49 51 52 45
Prehospital admission certification
requirement 59 60 so | 58
Higher rate of payment for delivery
at birthing center .. 21 19 21 22
Incentive to audit hospital statement 7 6 6 7
Care subject to utilization review 27 27 27 27

‘ Data were not tabulated for health maintenance organizations be-
cause they had their own inherent cost containment features.

NOTE: Where applicable, dash indicates no employees in this category.

53



by the employer leads to their classification as defined
benefit plans by the Internal Revenue Service.

Private benefits and Social Security payments

Employers providing private retirement plans also
share the cost of Social Security coverage equally with
their employees. Because many plan sponsors feel that pri-
vate pension and Social Security benefits should not be du-
Plicative, formulas for calculating private pensions often
contain an offset provision under which part of the Social
Security pension is subtracted from the annuity. Social Se-
curity offsets are generally applied immediately upon re-
tirement, whether or not the retiree is eligible for Social Se-
curity benefits. Some plans coordinate with Social
Security through “excess” formulas that apply lower pen-
sion benefit rates to an employee's earnings below a speci-
fied level (either the Social Security taxable wage base—~
usually the career average—or a dollar amount equal to a
past taxable wage base). .

One-half of pension plan participants, including a large
majority of those covered under terminal-earnings formu-
las, had formulas that were “integrated” sith Social Secu-
tity (table 75).

Maximum 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 relatively high-paid employees.
Many plans, however, have provisions that restrict benefit
levels for all participants, For example, two-fifths of par-
ticipants were in plans that limited the number of years of
service included in benefit computations; maximums of
25, 30, or 35 years were most common.

Normal retirement

Just over one-half of defined benefit plan participants in
small establishments could retire before age 65 (usually at
age 62) and still receive full private pensions (normal re-
tirement benefits). Workers who had to wait until age 65
for full benefits usually did not have to satisfy a length-of-
service requirement (table 76).

When normal retirement was permitted prior to age 65,
however, plans generally imposed a minimum service re-
quirement. For example, normal retirement at age 62 was
available to nearly two-fifths of pension participants but
one-half of these employees had to have worked 10 years
or more,

Plans that allow retirement at any age with the required
amount of service and those that require combining a
worker's age and service to reach a specified sum for retire-
ment with full benefits were rare—covering less than 1 of
10 pension plan participants.

mt

Early retirement

Nearly all the full-time employees participating in de-
fined benefit pension plans could retire before normal re-
tirement age and receive an immediate, but reduced, pen-
sion (table 77), Early retirement was almost always solely
at the employee’s option. It was rare for a plan to 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 of time.

For virtually all participants in pension plans that al-
lowed early retirement, the early retirement benefit was
calculated using the normal retirement formula. The bene-
fit derived from that formula is then reduced by a percent-
age (factor) for each year between the actual and normal
retirement ages. Ifa 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 (100 percent minus 18, i.e., 3 years times
6 percent). In addition to the 18-percent reduction for ear-
ly 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. Reduction factors that differed by age were
used in plans covering nearly three-fifths of participants
with early retirement opportunities. Most of these partici-
pants were in plans with reduction factors that differed for
each year of early retirement, based on the employee's life
expectancy at that age (actuarial reductions). Other age-
related methods of reducing benefits approximate an actu-
arial reduction. For example, the reduction factor may dif-
fer for age brackets of several years instead of changing
each year. Two-fifths of participants had uniform reduc-
tion factors, most commonly 3 to 6 percent for each year of
early retirement. In plans with a low uniform reduction,
such as 3 percent per year, the employer is subsidizing
some of the early retirement benefit by making the reduc-
tion less severe than if benefits were computed actuarially.

Nearly seven-tenths of all participants were covered by
plans permitting early retirement at age 55; in most in-
stances, 10 years of service was required, If service require-
ments were satisfied, some participants could retire earlier
than age 55. Many of these participants could retire with
reduced benefits at any age, generally after 30 years of ser-
vice.

Disability retirement

A career-ending disability may entitle an employee toa
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 disability retirement benefit might be def-
erred until the other forms of income have ceased. Nine
out of 10 pension plan participants in small establishments



Table 24. Paid annual sick leave:' Average number .of days Table 25. Paid annual-sick leave:' Percent of full-time
at full pay for full-time participants by sickness and accident Participants by unused sick leave policy and carryover

insurance coordination, small establishments, 1990 provisions, small establishments, 1990
Profes- Profes-
sional, | Clerica! | Produc- sional, | Clerical | Produc-
techni- | and | tion and 5 techni- | and tion and
Item iceits| Cal, and! sales | service Unused sick Jeave policy and All patg[caland| sales | service
ipants | related | partici | partici- uryover provision pants’ ‘elated | partici | partici-
Partici- | pants | pants partici. | pants | pants
pants pants

Unused sick leave policy

At 1 year of service:
100 | 100 | 100 | 100

31 4 29 27

Total ..

‘With sickness and accident
64 7.0 68 56 Carryover only

insurance .... |
Without sickness and accident Cash-in ont 13 7 14 18
insurance of 94) 127 8.9 70 Carryover ant 8 7 8 7
Unused benefit los! 47 45 49 48
At 3 years of service: Data not available ie) - 1 iv)
With sickness and accident Carryover provisions
insurance 69 72 76 5.9
100 | 100 | 100 100

Without sickness and accident Total .
insurance | 118} 163] 112] 280

Unlimited accumulation

At 5 year of service:
Limit on total number of days

With sickness and accident accumulated es | 6 | 72 | 60
insurance 75| 77] 86) 64
Without sickness a Under 10 days .. 3 3 3 5
insurance 138/ 173} 136/ 90 10 days . 5 3 8 5
11 - 19 days 9 8 Fy 10
At 10 years of service: 20 days .. 2 2 2 3
21 - 24 days 1 1 7) 1
With sickness and accident 25 days . 1 1 1 2
insurance sis] BO 8.0 96 63 26 - 29 days Q ® iy) 19)
Without sickness and accident 30 - 39 days 1 a | 13 11
insurance .. | 152| 181] 170] 99 40 - 49 days 3 6 1 1
50 days .. 1 1 1 1
At 15 years of service: 51 - 64 days 6 4 4 4
65 day 1 1 1 1
With sickness and accident Q i] 1 0
insurance .. 84 82] 10.3 64 QO > 1 q
Without sickness and accident 18 | at 16 7
insurance ..... 163/ 188; 169] 10.5 a 6 2 v)
At 20 years of service: ro) 6 a iy]
4 3 71 0
With sickness and accident 1 1 2 1
insurance .. 87 84 10.9 65 Days not avallable 1 e 1 @
Without sickness and accident
insurance . 174! 194} 198] 11.1 Data not available 2/ @ 1 8
At 26 years of service? * Paid sick leave plans with a specified number of days available each
With sickness and accident ae
ineurance 90) 86) 114] 66 Less than 0.5 peroent,
without sickness and accident NOTE: Because of rounding, sums of individual items may not equal to-

insurance. 175} 198] 202) 114 tals. Where applicable, dash indicates no employees in this category.

* Paid sick leave plans with a specified number of days available each
year.
* The average (mean) was virtually the same at longer years of service.

NOTE: Computation of average excluded days paid at partial pay and
workers with only partial pay days or zero days of sick leave.



Work schedule

The number of hours per day and hours per week for
which part-time employees were scheduled to work varied
widely. Most prevalent were work schedules of 4 or 5
hours per day, typically 5 days per week. Total hours were
frequently between 15 and 30 per week. Part-time white-
collar employees tended to work longer hours per day but
fewer days per week than blue-collar workers.

Time off

Paid time off was the most prevalent type of benefit pro-
gram available to the part-time workforce. Nearly three-
tenths of all part-time employees were eligible for paid va-
cations, paid holidays, and paid rest periods.

When paid time-off benefits were provided to part-time
employees, there were often significant differences be-
tween the number of days off part-time workers and full-
time workers received. For example, part-time employees
received an average of 6.7 paid holidays per year, while
full-time workers received pay for 9.5 holidays. Also com-
mon were provisions that were prorated based on the work
schedule of the part-time employee.

Additionally, part-time employees received fewer paid
vacation days than full-time workers. Part-time employees
eligible for paid vacations were granted an average of 9.1

89

days at 5 years of service, compared to 11.5 days for full-
time employees. At 20 years of service, part-time vacation
participants averaged 12 days, while full-time participants
averaged 15 days.

Other types of leave were less common. Just over one-
tenth of part-time employees were eligible for paid jury
duty, paid sick leave, or paid funeral leave. Maternity leave
and paternity leave, either paid or unpaid, were rarely pro-
vided to part-time workers.

insurance, retirement, and other benefits

Insurance benefits—sickness and accident insurance,
long-term disability insurance, medical care, dental care,
and life insurance—were available to one-tenth or fewer
part-time workers.

Similarly, one-tenth of part-time workers were eligible
to participate in a retirement plan. As with full-time work-
ers, defined contribution plans were the most prevalent
type of retirement plans observed. Defined benefit pension
plans were rarely available to part-time workers in the sur-
vey.

The incidence of other benefits, such as severance pay,
financial and legal services, family-related benefits (in-
cluding childcare and eldercare), and health promotion
programs, was rare (table 87).



related workers than among the other groups. Severance
pay was also more frequently available to white-collar em-
ployees.

The information presented in chapters 1-8 of this bulle-
tin describe the incidence and provisions of benefits pro-
vided to full-time employees in small establishments.”

Data on part-time employees are presented in chapter'9.

7 For some benefits, less detailed provision information is available
than was presented for earlier surveys of full-time workers in medium
and large private establishments. This is because the incidence of certain
benefits or the response rate was too low to meet publication criteria.

A Note on the Tables

The majority of the tables presented throughout this bulletin indi-
cate the percent of all employees, or of a selected group of employees,
covered by particular benefits and benefit features. In using these
tables, it is important to understand the group of employees about
whom data are being presented; this information is contained in the
title of each table. Some tables indicate the percent of all employees
covered by the survey who have a certain benefit; other tables indicate
the percent of employees covered by a certain benefit who have a cer-
tain plan feature.

For example, table 1 indicates that 69 percent of all full-time em-
ployees 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 per-
cent in these tables, with smaller percents indicating the availability
of plan features. For example, in table 37, 100 percent indicates those
workers with medical care plans and 74 percent indicates those work-
ers with medical care covered by a fee-for-service plan. A more de-
tailed discussion of data calculation is found in appendix A.



were covered by some type of disability retirement provi-
sion in 1990 (table 77). To be eligible for disability retire-
ment benefits, participants often had to meet a service re-
quirement, generally 10 years, or meet the qualifications of
their long-term disability insurance plans.

Most full-time employees with disability retirement
coverage were in plans with deferred benefits. Employees
with deferred benefits may be given long-term disability
insurance benefits that typically provide 50 or 60 percent
of earnings at the time of disability; the amount was typi-
cally greater than the amount of an immediate disability
retirement pension. Furthermore, most deferred retire-
ment benefits were greater than immediate disability pen-
sions, primarily because the time between the onset of dis-
ability and the start of pension payments was typically
added to an employee’s length of service for computation
of pension benefits. (See chapter 3 for details of long-term
disability benefit plans.)°

Postretirement pension increases

Inflation can severely erode the purchasing power of a
fixed pension throughout a worker’s retirement years. To
guard against this, some pensions are adjusted on a discre-
tionary basis while others are subject to automatic in-
creases specified in the pension plans. Plans that increased
pensions for current retirees at least once during the
1985-89 period covered fewer than 1 of 10 pension plan
participants. Most of these increases were discretionary,
or ad hoc, rather than automatic (table 77).

The amounts of ad hoc increases were not directly
linked to a cost-of-living index. Instead, retirees’ current
pensions were usually increased by a percent of the present
benefit, commonly a uniform amount. During the 1985-89
period, most pension plans granting ad hoc increases pro-
vided one increase, usually 10 percent of the current pen-
sion amount.

Since the survey provides only the number of current
employees covered by defined benefit pension plans and
not the number of retirees, it cannot specify the proportion
of annuitants actually receiving postretirement pension in-
creases. Thus, the measures discussed in this section de-
scribe the incidence of postretirement increases among ac-
tive plan participants.

Plans that provided for automatic increases in pension
benefits to compensate for increases in the cost of living
were rare. Where they were found, these cost-of-living-ad-
justment formulas usually were based on changes in the
BLS Consumer Price Index.

Postretirement survivor benefits

ERISA also requires defined benefit pension plans to pro-
vide a periodic benefit to a retiree and to continue a benefit
of at least 50 percent of the retiree’s payments to the spouse

30 For amore complete discussion of disability retirement, see Donald
Bell and William Wiatrowski, “Disability Benefits for Employees in Pri-
vate Pension Plans,” Monthly Labor Review, August 1982, pp. 36-40.

after the retiree’s death. When this type of pension—called
a joint-and-survivor annuity—is paid, the employee will
generally receive a lower benefit during retirement to ac-
count for the likely increase in the length of time payments
are made. When the retiree dies, a pension benefit will be
payable for the life of the surviving spouse. All defined
benefit pension plan participants had joint-and-survivor
annuity options available to them in 1990.1

Joint-and-survivor annuities are based on an actuarial
or arithmetic reduction of the employee’s pension. Nearly
one-half of the participants were in plans offering only a
joint-and-survivor option that provides a surviving spouse
50 percent of the retiree’s adjusted pension. Most of the
remaining participants had a choice of two alternative per-
centages or more (frequently 50, 67, and 100 percent) to be
continued to the spouse, with corresponding reductions in
the retiree’s annuity.

Preretirement survivor benefits

Virtually all defined benefit pension plan participants
also had survivor benefits available in case the employee
died before retirement. Participants generally had to-be
vested before such benefits were available. (Vesting is the
guaranteed right to future benefits. See the last section in
this chapter for details.) For most participants, a surviving
spouse would generally receive an annuity equivalent to
the amount payable if the employee had retired on the day
prior to death with a joint-and-survivor form of payment
in effect. Nearly all survivor pensions of this nature were
based on an early retirement benefit and, aside from the
joint-and-survivor reduction, usually were provided at no
cost to the employee. The most common preretirement
survivor annuity was 50 percent.

Participants not covered by joint-and-survivor annui-
ties generally had a preretirement survivor annuity calcu-
lated as a portion of the employee’s accrued benefit (the
benefit earned as of the date of the employee’s death, with-
out a joint-and-survivor reduction). If an employee dies af-
ter completion of the vesting requirement, a typical survi-
vor would receive an annuity equal to 50 percent of the
employee’s accrued benefit to date. Payments may be re-
duced by the early retirement adjustment, and begin when
the employee would have reached early retirement age.

Defined Contribution Plans

Three-tenths of the full-time employees covered by the
1990 survey participated in one or more defined contribu-
tion plans. Nearly two-fifth of the white-collar workers,
compared to one-fourth of the blue-collar workers, partici-
pated in these plans.

Defined contribution plans may be divided into those
designed to provide retirement benefits and those intended

31 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.



Table 76. Defined benefit pension plans:' Percent of full-time participants by minimum age and associated service
requirements for norma! retirement,’ small establishments, 1990

Profes- | Clerical | Produc- Profes- | Clerical | Produc-
All par Hteenaty,| and | tion and ‘Al pare [tenenal,| “and” | tion and
‘Age and service requirement® | 14 Par. |'eenmiea| sales | service || Age and service requirement? Par |technical,) sales | service
icipants | and re- na. | Sent ticipants | and re- es
tated par-| Parts | partici tated par-| Partict | partici-
ticipants | Pants | pants ticipants | Pam's | pants
Total yoo | 100 | 100 | 100
lage 62 37 25 34 44
No age requirement . 4 4 3 5 ||” No service requirement 15 9 4 19
25 years’ service 1 - 1 1 |] 5 years' service .. 4 1 4 6
30 years’ service 3 4 2 4 || 10 years’ service 6 4 2 10
More than 30 year 0) 0) . : 15 or 20 years’ service .. 9 10 13 6
25 years’ service 2 1 0) 3
2 1 1 3 j] 30 years’ service 1 “ 1 1
iy) iv) 9) o
20 years’ service 1 1 1 2. |lAge 63-64 1 1 1 2
30 years’ service ) 0 0) 1 |] No service requirement 1 1 1 1
5 years’ service .. ) - - 1
1 Oo - 1
6 - lage 65 46 58 53 36
No service requirement 32 48 39 2
Age 60 . 6 5 5 7 || Syears’ service 8 4 5 6
6-9 years’ service 0) 1 0) - 10 years’ service 5 3 3 7
10 years' service 2} 0 1 3 |) 18 years’ service 1 - 3 -
15 years’ service (0) ro) 0) - 20 years’ service 1 2 a]
20 years’ service 1 0) 1 1 || 25 years’ service 0) 1 0) 0)
28 years’ service 1 3 1 1 || 30 years’ service 1 1
30 years’ service 2/04 2 2
More than 30 years’ service ..| (4) - - () [lsum of age plus service® 4 6 4 2
Equals 8 1 2 1 0)
Equals 8: 2 3 2 1
Equals & 1 1 1 1

Excludes supplemental pension plans.

? 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 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,

* Less than 0.5 percent.

* In some plans, participants must also satisly 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.

B





Table 72. Retirement and capital accumulation pian
coverage: Percent of full-time employees by participation in
retirement plans and capital accumulation plans, smail
establishments, 1990

Profes-
: sional, | Clerical | Produc:

techni- | and | tion and
Allert |cai, and| sales | service
ployees | related | employ- | employ-
employ-| ees ees

Type of plan

ees
Total... 100 100 100 100
Covered by retirement or capital
accumulation plan .. 44 51 50 39
Retirement" only .. 41 46 45 36
Capital accumulation* only 2 2 2 2
Retirement and capital
accumulation 2 3 2 1

Not covered by retirement or capital

accumulation plan .. 56 49 50 61

* Includes defined benefit pension plans and defined contribution plans
such as money, purchase pension, profit sharing, and savings and thrift
plans in which employer contributions must remain in the participant's ac-
count until retirement age, death, disability, separation from service, age
59 1/2, or hardship. :

? Includes plans in which employer contributions may be withdrawn
from participant's account prior to retirement age, death, disability, separa-
tion from service, age 59 1/2, or hardship. Excludes pure cash profit shar-
ing, stock option, and stock purchase plans.

NOTE: Because of rounding, sums of individual items may not equat to-
tals. Where applicable, dash indicates no employees in this category.

16



Table 85. Summary: Percent of full-time employees participating in selected employee benefit programs and percent of

participants with
1987

lected features, medium and large establishments, 1979-86, 1988-89, and State and local governments,

tem 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | tose | 1987 | 1988 | 1989
Percent of employees participating
in the following benefit plans:
Paid lunch time 13 10 10 9 1 9 10 10 7 "1 10
Average minutes per day - - - 25 25 26 27 27 34 29 26
Paid rest time .. 75 76 75 76 74 73 72 2 58 2 a
Average minutes per day - - : 25 25 26 26 26 29 26 26
Paid funeral leave .. - - - - - - 88 88 56 85 84
Average days per occurrence - - - - - - 32| 32| 37/ 32] 33
Paid holidays... 99 99 99 99 99 99 98 99 81 96 97
‘Average days per year - 10.1 | 102 | 100 98} 98! 101] 100} 109] 94] 92
Paid vacations 100 100 99 99 100 99 99] 100 72 98 97
Paid sick leave 56 62 65 67 67 67 67 70 97 69 68
Paid personal leave 19 20 23 24 25 23 26 25 38 24 22
Percent of employees participating
in medical care plans ... 97 97 97 97 96 97 96 95 93 90 92
Percent of medical care participants with:
Coverage for home health care - - - - 37 46 56 66 76 76 7
Coverage for extended care facilities .. 54 58 60 62 58 62 67 70 78 73 80
Coverage for mental health care .. 98 98 99 39 99 39 99 99 98 98 97
Coverage for alcohol abuse treatmer - - - 50 53 61 68 70 87 80 97
Coverage for drug abuse treatment - - - 37 43 52 6 66 86 74 96
Required employee contribution for
self coverage .... 27 26 27 27 33 36 43 35 44 47
Average monthly contribution - - - - | $10.13 | $11.93 | $12.05 | $12.80 | $15.74 | $19.29 | $25.91
Required employee contribution for
family coverage - 46 49 51 54 58 63 74 66
‘Average monthly contribution - - - ~ | $32.51 | $35.98 | $38.33 | ¢ 41.40 | $71.89 | $60.07 | $72.10
Percent of employees participating in
defined benefit pension plans 87 84 a4 84 82 82 so; = 76 93 63 63
Percent of pension plan participants wit!
Normal retirement prior to age 65, - 55 56 58 64 63 87 64 92 59 62
Early retirement available . - 98 98 97 97 97 97 98 90 98 7
‘Ad hoc pension increase in last § years - - - - 51 47 41 35 33 26 22
Terminal earnings formula 62 53 50 52 54 54 87 57| 100 55 64
Benefit coordinated with Social Security - 45 43 45 55 56 6 62 18 62 63
Percent of employees participating in
defined contribution plans - - - - - - 53 60 9 45 48
Percent of employees with tax-deferred
savings arrangements - - - - - - - 33 28 36 4
Percent of employees participating in
life insurance plans 96 96 96 96 98 98 98 96 85 92 94
Percent of life insurance partic
Accidental death and dismemberment
insurance .. 72 69 72 72 72 74 73 72 67 76 a
Survivor income benefits - - - - - - 13 10 1 8 7
Retiree protection available - - 64 64 66 64 62 59 55 49 42
Percent of employees participating in
long-term disability insurance plans 49 40 4 43 45 7 48 48 31 42 45
Percent of employees participating in
sickness and accident insurance plans... 65 54} 50 51 49 51 52 49 14 46 43
Percent of employees eligible for
flexible benefits plans - - - - - - - 2 5 5 9
Percent of employees eligible for
reimbursement accounts ... - - - - - - - 5 5 12 23

* NOTE: Dash indicates data not collected in this year.



i
Table 53. Medical care benefits: Percent of full-time. participants in contributory plans‘ by type and amount of employee
contribution, small establishments, 1990
Employee Family anti Employee Family
Type and amount of contribution coverage | coverage? Type and amount of contribution coverage | coverage?
All participants Clerical and sales :
|
Total... 100 100 Total .. 100 100 |
Flat monthly amount 85 82 Flat monthly amount 85 a1 |
Less than $5.00" 2 1 2 1
$5.00-$9.99 10 1 13 1
$10,00-$14.99 15 2 - 16 3
$15.00-$19.99 7 2 $15.00-$19.99 .. 6 2
$20.00-$29.99 16 3 $20.00-$29,99 15 4 |
$30.00-$99.99 7 6 $30.00-§39.99 . 9 4
$40.00-$49.99 8 3 $40.00-849.99 . 5 4
$50.00-$59.99 4 5 $50.00-$59.99 3 6
$60.00-$69,99 2 4 $60.00-$69.99 2 4
$70.00-$79.99 oy 5 $70.00-§79.99 . i) 7
$80.00-$89.99 1 3 $80.00-$89.99 . 1 3
$90.00-$99.99 is) 2 $90.00-$99.98 . - 2
$100.00-$124.95 - 6 $100.00-$124.99 - 6
$125.00-$149,99 - 7 $125.00-$149.99 .. - 7
$150.00-$174.99 0 5 $150,00-$174.99 .. iv) s |
$175.00-$199.99 - 8 $175.00-$199.99 .. - 7
$200.00 or greater - 9 $200.00 or greater - 9
‘Composite rate‘ 15 10 Composite rate* 12 9
Amount varies by employee’ .. 7 5 ‘Amount varies by employee® 7 5
Amount varies by earnings 2 2 |Amount varies by earnings 2 2
Not determinable .. 6 12 INot determinable .... 7 "
Professional, technical, Production and service
Total . 100 100 Total ... 100 100
Flat monthly amount 85 84 Flat monthly amount 85 at
Less than $5.00 .. 3 1 Less than $5.00 2 4
$5.00-$9.99 .. 9 2) $5.00-$9.99 9 1
$10.00-$14.99 13 1 $10.00-$14. 14 2 |
$15.00-$19.99 8 2 $15.00-$19,99 7 2
$20.00-$29.99 25 3 $20.00-§29.99 12 2
$30.00-$39.99 8 4 $30.00-$39.99 5 9
$40.00-$49.99 7 2 $40.00-$49.99 7 2
$50.00-$59.99 4 8 $50.00-$59.99 4 3
$60.00-$69.99 a) 4 $80.00-$69,99 2 4
$70.00-$79.99 eQ 6 $70.00-$79.99 1 3
$80.00-$89,99 i) 4 ‘$80.00-$89.99 2 3
.00-$99.99 (o) 4 $90.00-$99.99 - 2
$100.00-$124.9 a 8 $100,00-$124.99 - 5
$125.00-$149.99 - 8 $125.00-$149,99 - 8
$150.00-$174.99 .. v) 5 $150.00-§174.99 iv) 6
$175.00-$199.99 - 1 $175.00-$199.99 - 6
$200.00 or greater - 8 $200.00 or greater - 9
Composite rate* 8 6 Composite rate* 20 13
Amount varies by employee* 10 6 [Amount varies by employee’ .. 7 5
Amount varies by earnings ... 1 1 |Amount varies by earnings 2 1
Not determinable .. 3 9 INot determinable 7 14
* Plans providing services or payments for services rendered in the area, for example, health care and sickness and accident insurance. Cost
hospital or by a physician, data for individual plans cannot be determined.
? if the amount of contribution varied by either size or composition of * Amount varies by options selected under a “cafeteria plan” or bal-
family, the rate for an employee with a spouse and one child was used. ance of employer-sponsored reimbursement account.
For a small percentage of employees, the employee contributes the same
‘amount for single and family coverage. NOTE: Because of rounding, sums of individual items may not equal to-
* Less than 0.5 percent. tals. Where applicable, dash indicates no employees in this category.
* A composite rate is a set contribution covering more than one benefit
55



Table 49. Medical care benefits: Percent of full-time participants in plans with alcohol abuse treatment benefits by extent of

benefits, small establishments, 1990

iat Professional, technical, and Clerical and sales Production and service
All participants related participants participants participants
Coverage limitation Inpatient|inpatient| Out-- |Inpatient]Inpatient| Out- |inpatient|Inpatient| Out- |inpatient|inpatient| Out-
detoxifi- | rehabili- | patient | detoxifi- | rehabili-| patient | detoxifi- | rehabili-| patient | detoxifi- | rehabili- | patient
cation’ | tation? | care* | cation' | tation? | care? | cation' | tation* | care’ | cation’ | tation? | care®
Total 100 100 100 100 100 100 100 100 100 100 100 100
With coverage 99 80 74 100 Bt 75 100 80 74 99 80 74
Covered the same as other illnesses 28 Wt 6 a7 10 6 30 12 7 26 10 5
‘Subject to separate limitations* 72 69 68 72 71 70 70 68 67 73 70 68
Limit on days .. 46 44 25 50 48 32 47 46 23 44 42 24
Per year 36 36 22 42 41 27 35 35 21 34 34 a
Per confinement .. 7 5 iw) 5 4 = 7 6 6 7 5 iv}
Per lifetime 6 8 3 5 6 3 7 9 3 5 7 3
Per other perio 4 3 2 4 3 4 4 3 2 3 2 1
Limit on dollars .. 39 39 50 37 37 47 37 7 49 42 42 52
Par day 1 1 13 0 1 13 1 1 13 i) 1 14
Per year 14 14 33 14 14 30 14 14 36 13. 13 32
Per lifetime 30 30 27 26 26 24 28 27 24 34 34 31
Per other period 5 5 4 3 3 2 3 3 2 6 6 6
Coinsurance fimit’ .. W Ww 28 8 8 29 9 9 29 13 13 28
Ceiling on out-of-pocket expenses
does not apply 18 18 28 15 14 27 a1 20 32 18 18 26
‘Separate copayment or
deductible 2 2 5 5 5 7 2 2 4 2 2 5
Other limitations . Ce) - 0 ) - iV) 6 - iv) 1 - iV)
‘Without coverage 1 20 26 ) 19 25 oO 20 26 1 20 26

* Detoxification is the systematic use of medication and other methods
under ‘medical supervision to reduce or eliminate the effects of substance
abuse.

? “Rehabilitation is designed to alter abusive behavior in patients once
they are free of acute physical and mental complications.

* Includes treatment in one or more of the following: Outpatient depart-
‘ment of a hospital, residential treatment center, organized outpatient clinic,
day-night treatment center, or doctor's office. If benefits differed by foca-
tion of treatment, doctor's office care was tabulated.

“ Separate limitations indicate that alcoho! abuse treatment benefits are
more restrictive than benefits for other treatments, For example, if a plan

51

limits inpatient rehabilitation care to 30 days per year, but the limit on inpa-
tient care for any other type of illness is greater than 30 days per year,
that plan contains separate limits. The total is less than the suri of the in-
dividual items because many plans had more than one type of liniitation.

® Less than 0.5 percent.

* Coinsurance rate is lower than that applying to other medical serv-
ices. In such cases, outpatient rehabilitation care is generally at a coinsur-
ance rate of 50 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 9. Paid vacations: Percent of full-time employees by amount of paid vacation Provided at selected
periods of service, small establishments, 1990—Continued

Protes- Profes-
sional, | cjoriea)| Produc sional, | rica | Produc+
techni | MRA tion techni: | MCA ton
, Allem-| cal, and ‘ All em-| cal, and
Vacation policy ployees| and re-/_,S%°8 | servico| Vacation policy ployees| and re- ones service
tated |°ROY employ. fated |°OROM employ-
lemploy- ees employ-| ees
ees ees
At 25 years of servic At 80 years of
Under 5 days .. oleate - service:—Continued
5 days... 8 3 é| 1 Over § and under todays} © | © | @ | @
Over 5 and under 10 days| ro) @ @ 10 days ... | 23 18 24 24
10 days .. | 23 | i¢ | 24) 24 Over 10 and under 15
Over 10 and under 15 . 1 1 i 1
1 1 1 1 21} 2] a} 19
ai | 2} 22) 20
1 2 1 1
days... 2 1 1 22 | 32) 26} 16
20 days «. zz} s2| 26] 16
Over 20 and under 25 2 4 1 1
days .. 2 4 2 1 7 7} 10 5
25 days 7 7} 10 5 Over 25 days 2 3 3 1
Over 25 days 1 2 2 1
Not provided paid vacations .. 2 6 7| 17
‘At 30 years of
service:
Under § days a! @| @ -
5 days 8 3 e6| i

* 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 eligtble for vacations.

* 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 10. Paid vacations: Percent of full-time participants
by length of service required to take vacation, small

establishments, 1990

Protes-
sional, | Clerical | Produc-
Allpar- | techni. | and | tion and
Length of service requirement | ; PR" | cal, and|. sales | service
pants | related | partici- | partici-
partici- | pants | pants
pants

Total

With service requirement
1 month .
2 months
3 months
4-5 months

Without service requirement

Service requirement not
determinable

100 | 100 100 | 100

x2 | ot 92 | 93
3 3 2 3
1 1 1 1
4 6 4 3

() 1 1 Q

1s | 29 | 22 | 40

() Q ) )

6 | 51 61 73
1 1 () 2
6 9 7 5
1 1 1 2

" Less than 0.5 percent.

NOTE: Because of rounding, sums

of individual items may not equal to-

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

13



Table 36. Medical care benefits: Percent of full-time participants by coverage for selected categories of care, small
establishments, 1990

Care provided
Category of medical care Total Subject to | Subject to -| Subject to | 8? ‘dere
All Covered in full | internal limits | overall limits |; internal and “
only* ‘only* ‘overall limits
All participants
Hospital room and board 100 100 13 3 87 26 -
Hospitalization—miscellaneous
services* .. 100 100 13 3 58 26 -
Extended care facility® 100 83 4 12 12 54 17
Home health care® 100 79 14 7 16 42 21
Hospice 100 51 4 5 20 22 49
Surgery
Inpatient .. 100 100 23 ° 69 7 -
Outpatient” 100 100 27 i) 64 8 -
Physician visits
100 100 16 iv) 1 13 -
400 100 5 1 76 7 6
y ry 100 100 24 1 67 "1 =
Prescription drugs—nonhospital 100 96 2 20 64 10 4
Mental health care
In hospital 100 98 1 7 6 72 2
Outpatient 100 96 iv) 7 1 7” 4
Alcohol abuse treatment
Inpatient detoxification” 100 97 5 13 14 64 3
Inpatient rehabilitation? 100 78 1 11 7 59 22
Outpatient rehabilitation? 100 72 1 14 4 53 28
Drug abuse treatment
Inpatient detoxification® 100 94 5 13 12 63 6
Inpatient rehabilitation? 400 73 1 "1 4 57 27
Outpatient rehabilitation 100 68 1 13 3 51 32
Professional, technical, and related
Hospital room and board 100 100 13 5 53 29 -
Hospitalization—miscellaneous
services* ... 100 100 13 5 53 28 -
Extended care facility’. 100 81 4 15 13 49 19
Home health care® 100 81 7 4 18 4 19
Hospice 100 49 4 5 24 19 51
100 100 25 rv) 7 4 -
100 100 30 tv) 64 7 -
Physician visits
In hospital 100 100 18 iV) 7 "1 -
Office . 100 100 6 13 72 9 -
Diagnostic X-ray and laboratory 100 100 22 1 67 40 -
Prescription drugs—nonhospital 100 97 a 2 62 "1 3
Mental health care
In hospital 100 98 1 19 7 71 2
Outpatient 100 94 iv) 20 0 74 6
Alcohol abuse treatment
Inpatient detoxification® 100 97 6 14 14 64 3
inpatient rehabilitation? 400 78 1 12 8 58 22
Outpatient rehabilitation? 100 73 2 14 3 84 27
Drug abuse treatment
Inpatient detoxification® 100 94 5 14 12 63 6
Inpatient rehabilitation? 100 73 1 12 4 57 27
Outpatient rehabilitation? 100 67 1 14 2 49 93

See footnotes at end of table.

42



Table 39, Medical care benefits: Percent of full-time
participant plans with overall limitations on benefits by
coinsurance rate, smail establishments, 1990

Profes-
sional, | Clerical | Produe-
techni- | and | tion and
cal, and} sales | service
felated | partici- | partici-
partici- | pants: | pants
pants

All par-

Coinsurance amount ticipants

100 100 | 100° | 100
96 94 96 96

Total ....

With coinsurance! ..
Coinsurance rate*

~eSn8
Bad
Sn2
aaone

percer
Other percent
Varies?

Without coinsurance® 4 6 4 4

* Represents the initial coinsurance in plans that have 100 percent cov-
erage after the individual pays a specified dollar amount toward expenses.
For example, the plan pays 80.percent until the individual's out-of-pocket
expense reaches $1000, and then coverage is at 100 percent.

‘A few plans have more than one coinsurance rate. {n those cases,
the coinsurance rate shown is that which applies to the malority of bene-
fits under the plan.

2 The overall colnsurance rate varies by specitied dollar amount of ex-
penses. For example 80 percent coverage up to $5000 and 90 percent
thereafter.

« ‘Less than 0.5 percent.

* Includes plans with overall benetit imitations, 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 to-
tals. Where applicable, dash Indicates no employees in this category.

Table 40. Medical care-benefits: Percent of full-time
Participants In plans with overall limitations on benefits by
maximum out-of-pocket expense provisions, small
establishments, 1990

Profes-
sional, | Clerical | Produc-
; ‘Alt par-| techni: | and | tion and
Provision ticjpants| C8) and} sales | service
related | partici- | partici-
partici- | pants | pants
pants
Total snes 100 | 100 | 100°} 100
Maximum on annual out-of-pocket
expense! | 88 90 91 88
1 6 4 1
15 24 15 1
18 7 7 19
9 9 10 7
32 30 32 33
3 2 4 2
E F 5 4 4 7
$2,000-$2,49: 6 6 6 5
$2,500 and greater .. 2 2] 4 2
Per family:
iv) (0) 1 i)
2 3 1 2
6 6 7 6
10 14 9 9
1 1 1 1
8 9 7 8
16 16 19 14
9 7 8 10
$4,000 and gteater .. 5 4 5 6
No family maximum 92 st 33 32
Coinsurance varies by procedure 2 3 2 3
‘No maximum on annual out-of-
pocket expenses 8 7 8 10
Coinsurance unchanged ... 8 ? 8 10
Final coinsurance changes to
other than 100 percent .. re) ie) - 8

* Deductible amounts were excluded from computation of the out-of-
pocket dollar limits, With rare exceptions, an annual out-of-pocket limit
was specified. 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 cara, may not be counted toward the out-of-pocket
maximum. Under federally qualified HMO's, there is a limit on the amount
of copayments the participant must pay, equal to a percentage of the total
premium. These plans were excluded from the computation of the out-of-
pocket dollar limits.

? Less than 0.6 percent,

2 In a tew plans, family out-of-pocket expense could not be computed
because no limit on family deductibles was given.

“ Different coinsurance levels apply to different categories of care, but
covered expenses under all coinsurance levels are limited to a specific
dollar amount after which the plan pays 100 percent of additional ex-
penses. Due to the varying coinsurance levels, out-of-pocket maximums
cannot be calculated.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



ways. For nearly all participants, the method of allocation
‘was as a proportion of salary. Other allocation methods in-
cluded formulas based on earnings and service, partici-
Pants’ contributions as a percent of total contributions,
and equal allocations to all participants.%

Participation and Vesting In Defined
Benefit and Defined Contribution Plans

Minimum age and/or service requirements for plan par-
ticipation are more common in defined contribution plans
than in defined benefit plans. To begin accumulating bene-
fits, approximately nine-tenths of savings and thrift and
deferred profit-sharing plan participants had to meet such
requirements. In contrast, only two-thirds of defined bene-
fit plan participants faced such provisions.

Of the defined benefit and defined contribution plans
with participation requirements, most required a mini-
mum amount of service and a designated minimum age.
These plans most often specified that employees could not
enter the plan until they reached age 21 and completed 1
year of service, the most restrictive requirements per-
mitted under the Internal Revenue Code.”

Even when an employee leaves an employer before be-
coming eligible for either a normal, early, or disability re-
tirement benefit, a pension may ultimately be paid. If cer-
tain conditions are satisfied at the time of separation,
workers have a vested interest in all or a portion of their
accrued defined benefit pension benefits and may begin re-
ceiving benefits years later. Vested benefits under such de-
fined contribution plans as profit sharing and savings and
thrift plans, however, are usually paid in a lump sum at
employment termination.

All defined benefit pension and defined contribution
plan participants are subject to the same vesting rules un-
der the Employee Retirement Income Security Act. Vest-
ing schedules vary significantly, however, between defined
benefit and defined contribution plans, and variations are
also common between individual types of defined contri-
bution plans. All vesting schedules apply to employer con-

36 For more details on profit-sharing plans, see Edward M. Coates,
HII, “Profit-sharing Today: Plans and Provisions,” Monthly Labor Re-
view, April 1991, pp. 19-25.

37 However, some plans, such as those found in religions institutions,
are exempt from certain restrictions in the Internal Revenue Code and
may require employees to meet greater age or length of service levels be-
fore coverage.

75

tributions; employee contributions (including pretax con-
tributions) are always 100-percent vested.

Immediate full vesting, a feature growing among de-
fined contribution plans but rarely found in defined bene-
fit plans, was available to just over one-third of savings and
thrift plan participants. Deferred profit-sharing plan par-
ticipants were much less likely to receive immediate full
vesting.

Graduated vesting, where the percentage of an em-
ployee’s benefit that is guaranteed increases over time and
reaches 100 percent, usually after 5 to 7 years, was most
common in deferred profit-sharing and savings and thrift
plans, with one-half of the participants covered by such a
provision.** Nearly one-fifth of the defined benefit pension
participants were covered under graduated vesting sched-
ules.

“Cliff” vesting, where no vesting occurs until an em-
ployee satisfies the service requirements for 100-percent
vesting, was found in a large majority of defined benefit
plans, but was much less frequent in savings and thrift and
deferred profit-sharing plans. Most participants in defined
benefit and defined contribution plans subject to cliff vest-
ing were fully vested after reaching 5 years of service.

For terminated and vested employees who wish to re-
ceive a defined benefit 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 re-
duced 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 an
employee no longer actively participating in a plan can be
more severe than for early retirement, the same factor was
used in plans covering most participants with early retire-
ment provisions. Where reductions differed, it was most
common to provide actuarial reductions to deferred vested
benefits, eliminating the subsidy employers provide to em-
ployees choosing early retirement.”

38 Multiemployer plans may continue to use 10-year vesting sched-
ules pursuant to a collectively bargained agreement. Single-employer
plans, in accordance with the Tax Reform Act of 1986, were required to
institute new vesting standards by the beginning of the plan year that
started on or after January 1, 1989.

38 For additional details on plan vesting requirements, see Avy D.
Graham, “How Has Vesting Changed Since Passage of Employee Re-
tirement Income Security Act?,” Monthly Labor Review, August 1988,
pp. 20-25.



requirement was 1 year for both white-collar participants
and blue-collar participants.

The survey also covered carryover and cash-in provi-
sions for unused vacation time (table 11). One-fifth of all
full-time workers covered were allowed to carry over at
least some of their unused vacation days into the next year;
one-tenth could cash in some or all of their vacation days
at the end of the year; and less than one-tenth had both
cash-in and carryover provisions. The majority lost vaca-
tion days that were unused at the end of the year. White-
collar workers were more likely to have carryover provi-
sions than blue-collar workers who, in turn, enjoyed a
similar advantage in cash-in provisions.

The average number of vacation days varied depending
on the cash-in/carryover provisions (table 12). At all
lengths of service, the greatest number of days was pro-
vided to those employees who could carry over unused va-
cation days. These employees averaged 2 more days a year
than employees without cash-in or carryover provisions.

Paid personal leave, Formal personal leave, which allows
employees to be absent from work with pay for a variety of
reasons not covered by other specific leave plans, was pro-
vided to one-tenth of the full-time employees (table 13).
Twice the proportion of white-collar employees as blue-
collar workers received personal leave. Most commonly,
employees provided personal leave were eligible for 1 to 5
days; the average was 2.8 days per year. A few employees
were provided as much personal leave as needed.

Paid funeral leave, jury-duty leave, and military leave. A
majority of white-collar workers and nearly two fifths of
blue-collar workers were eligible for paid leave to attend
funerals of family members (table 14). Nine-tenths of eligi-
ble employees received a set number of days per occur-
rence, averaging 2.9 days. White-collar workers received
an average of 3.1 days, while blue-collar workers averaged
2.8 days per occurrence.

Two-tenths of participants were in plans where the
number of days off varied by family relationship (e.g.,
mother, sister) to the deceased. These workers were in-
cluded in the count of workers having a set number of
days; the maximum number of days off was reported for
each plan that included this relationship provision. For
some employees who are not covered by a separate funeral
leave plan, 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. (See chapter. 3.)
Just over half the full-time workers were eligible for paid
leave while serving as a juror (table 15). .Paid time off for
jury duty was usually provided “as needed”; employer
payments commonly made up the difference between the
employee’s regular pay and the court’s jury allowance.
Military leave, providing pay for absence from work to
fulfill military training or duty commitments, was avail-
able in establishments employing one-fifth of the full-time
employees (table 16). The most common provision was 2
weeks off per year, but 6 percent of workers were in.estab-
lishments providing paid military leave as needed. For
workers with a specified number of days off, military leave
averaged 11.1 workdays per year. Pay for military leave
was either regular pay or the difference between regular

pay and military pay.
Parental leave

Unpaid maternity leave was available to 17 percent of
full-time employees; 8 percent were eligible for unpaid pa-
ternity leave (tables 17 and 18). White-collar workers.were
twice as likely to be covered by such plans than were blue-
collar workers. Two percent of the workers had paid ma-
ternity leave; paid paternity leave was virtually nonexis-
tent. Parental leave plans were defined as separate from an
employee’s other leave plans, such as sick leave and paid
vacations, which might be used by a new mother or father.
Unpaid maternity and paternity leave generally could be
taken after regular paid leave was used, and could contin-
ue for a fixed period of time. Employees had:a-reasonable
expectation of returning to their own or a similar job fol-
lowing leave, although this was not always specifically
guaranteed. —

For plans that provided a fixed number of days of un-
paid maternity or paternity leave, maximum maternity
benefits averaged about 13 weeks and maximum paternity
benefits averaged almost 12 weeks in duration. The aver-
age weeks varied slightly by occupational group.

Individual plans differed considerably in the amount of
unpaid time allowed, ranging from under 6 weeks to a little
over 1 year. Nearly all plans with both maternity and pa-
ternity leave allowed the same length of time off for each.*

8 For additional details on parental leave plans, see Joseph R. Meisen-
heimer, “Employer Provisions for Parental Leave,” Monthly Labor Re-
view, October 1989, pp. 20-24.



Table 47. Medical care benefits: Percent of full-time Participants In plans with mental health benefits by extent of

benefits, small establishments, 1990

. Professional, technical, Clerical and sales Production
All participants and related participants participants and service participants
Coverage limitation
Hospital | Outpatient | Hospital | Outpatient | Hospital | Outpatient | Hospital | Outpatient
care’ care? care’ care* care! care* care’ care®
Total 4100 400 100 100 100 100 100 100
With coverage .... 98 97 98 95 98 97 98 97
Covered the same as other
illnesses . 12 1 12 1 14 1 4 2
Subject to separate limitations® 85 95 86 95 84 95 87 96
Limit on days. 47 35 50 39 48 32 45 36
Per year 44 34 46 38 44 3 43 35
Per confinement 3 0) 3 0) 3 - 3 -
Per lifetime ... 1 oy 1 O 1 0) 1 0
Per other period rv) 1 “ 1 r7) } iv) 1
Limit on dotiars . 55 7 52 73 55 78 87 78
Per day iy) 28 19) 28 Oo 27 (9) 30
Per year 7 54 17 5 18 58 16 51
Per lifetime 47 - 43 - 46 - 50 ~
Per other period 2 1 1 1 1 1 2 2
Coinsurance limi 14 63 10 61 12 65 7 62
50 percent 7 53 5 52 6 56 8 51
Other* 7 10 5 8 6 9 9 al
Celting on out-of-pocket
expenses does not apply .... 26 55 25 52 27 59 26 54
Separate copayment or
deductible 3 9 6 12 2 8 2 9
Other limitations i) iy) oO i) i) - 0 -
Without coverage 2 a 2 5 2 3 2 3

' Excludes doctor's charges in the hospital.

* Includes treatment in one or more of the following: Outpatient de-
partment of a hospital, residential treatment center, organized out-
patient clinic, day-night treatment center, or doctor's office. If benefits
differed by location of treatment, doctors office care was tabulated,

3” Separate limitations indicate that mental health care benefits ‘are
more restrictive than benefits for other treatments. For example, if'a
plan limits inpatient mental health care to 30 days per year, but the
limit on inpatient care for any.other type of illness is greater than 30
days per year, that plan contains separate limits. “The total is-less than

the sum of the individual items because many plans had riore than
one type of limitation on mental health coverage.

* Less than 0.5 percent.

$ Includes plans with reduced coinsurance other than 50 percent
and plans where the rate of reimbursement varied during the treatment
period.

NOTE: Because of rounding, sums of individual items may not equal
totals. Where applicable, dash indicates no employees in this cate-
gory.

Table 48. Medical care benefits: Percent of full-time
participants in plans with substance abuse benefits by
uniformity in coverage, small establishments, 1990

Coverage limitation

Profes-
sional, | Clerical | Produc-
techni- | and | tion and
All par-
ticipants | C24 and| sales | service

related | partici- | partici-
partic | ‘pants | pants
pants

Total

With alcohol abuse treatment
benefits

Drug abuse treatment covered in
the same manner

Drug abuse treatment covered
differently

Drug abuse treatment benefits
not provided

400 | 100 | 100

100 | 100 | 100

87 86 87 88
40 Ww 10 10
3 3 3 3

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

50



Contents—Continued

Page
Work schedules:
Number of hours scheduled per week «1.0.0.0... 0006 ccceheceeceecctcusecueueenesenees 9
Paid time off:
Lunch time: Minutes per day 9
Rest time: Minutes per day ..... 10
Holidays and vacations: Average number of days . . 10
Holidays: Number of days provided each year .... il
Holidays: Policy on holidays that fall on a regularly scheduled day off ML
Vacations: Amount provided at selected periods of service ... 12
Vacations: Length of service required to take vacation . 13

. Vacations: Unused leave policy ...............¢.06 14
Vacations: Average number of days by unused leave policy .. 14

. Personal leave: Number of days provided per year .....: 14
Funeral leave: Number of days available per occurrence . . 14

. Jury-duty leave: Number of days available per occurrence . 15
Military leave: Number of days available per year 15
Parental leave policy .............00eeees 15
Unpaid Parental leave: Duration of benefits . 16

Short-term disability coverage:
. Participation in sickness and accident insurance plans and paid sick leave plans 20
Paid sick leave:
Type of provision 20

- Provision .. 21

. Average number of days at full pay by type of plan .. 22
Annual plans: Average number of days at full pay by accumulation policy . 22
Annual plans: Average number of days at full pay by sickness and

accident insurance coordination 23
Annual plans: Unused sick leave policy arid provisions ... 23
Sickness and accident insurance:

. Type and duration of payments 24

- Percent-of-earnings formula by maximum weekly benefit . 27

. Length-of-service requirements for participation 28

Long-term disability insurance:

. Method of determining payment .. 29
Percent-of-earnings formula by maximum monthly benefit 31
Benefit waiting period 32
Duration of benefits . 33
Length-of-service requirements for participation 33
Limitations on benefits for mental illness 33

. Survivor benefits 22... 06... ee ee 33

Medical care:
Coverage for selected categories of care 2.2.0.2... .0cce eee eeeeeseeesteeeeeenseveeenses 42
Fee arrangement and financial intermediary . 44
Overall limitations—amount of deductible . 45
Overall limitations—coinsurance 46

vii



Table 66. Life insurance: Percent of full-time participants
by provisions for age-related reduction of basic life
insurance benefits for current employees, small establish-
ments, 1990

Profes-
sional, | Cletical | Produc-
techni- | and | tion and
Forkatt cal, and| sales | service

related | partici- | partic
partici- | pants | pants

Provision

pants.
Total 100 100 100 100
Life insurance changes .. 39 41 4 36
Life insurance reduced 39 a ca) 36

Reduction begins at:
‘Age 60 or before

Age 65 23 24 26 21
Ages 66 to 69 .. Q Y Y Q
Age 70 14 18 |, 13 15
‘Age 71 or later iV) Vv) is) -
Life insurance benefits do not
change . 6 59 59 64

* Less than 0.5 percent.

NOTE:. Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 68. Life Insurance: Percent of full-time participants
with accidental death and dismemberment benefits by
amount of coverage,'small establishments, 1990

Table 67. Life insurance: Percent of full-time participants
with retiree life insurance coverage, small establishments,
1990

Profes-
sional, | Clerical | Produc-
techni: | “and | tion and
tobonts cal, and) sales | service

related | partici- | partici
partic? | ‘pants | ‘pants
pants

tem

Total .. 100 | 100 | 100 | 100
With coverage’ 19 18 at 19
Without coverage ... 7 5 72 76
Not determinable 7 9 7 5

* Includes plans in which coverage is fully paid by retiree.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 69. Life insurance: Percent of full-time participants in
plans with multiple of earnings and fiat dollar amounts of
insurance by availability of supplemental benefits, small
establishments, 1990

Profes-
sional, | Clerical | Produc-
techni- | and | tion and
cal, and! sales | service
related | partici- | partici-
partici. | pants | pants

All par-

{tem ticipants

pants

Total 100 | 100 | 400 | 100
Multiple of life insurance benefit 96 97 97 95
Less than 1 times 1 1 2 1

1 times 94 95 94 94
Greater than 1 times . 1 1 2 1
Flat amount .. 3 2 4
Less than $5,000 ia) io) 2
$5,000-$9,999 1 1 1
$10,000-$19,999 1 1 1
$20,000-$29,999 . 1 1 1
$30,000 or greater io) is) i)
Other? a @ 0) 1

* Benefits shown are payable for accidental death and are the maxi-
mum payable for dismemberment.

? Less than 0.5 percent.

* Includes plans in which basic life insurance benefits are expressed as
a flat dollar amount and accidental death and dismemberment benefits are
expressed as a multiple of earings.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Profes-

sional, | Clerical | Produc-

techni- | and | tion and

ftem teneetg| Cals and] sales | service

i related | partici-_| partici-

partici- | pants | pants

Pants

Multiple of earnings ..... 100 | 400 | 100 | 100
With supplemental benefits 46 44 52 40
jout supplemental benefit 54 58 47 59

0 1 0 ()
100 | 100. | 100

Not determinable ...

Flat amount

7 17 22 15
82 83 78 85
19) 0) 0) rv)

With supplemental benefits
Without supplemental benefits
Not determinable

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals, Where applicable, dash indicates no employees in this category.

67



Table 22. Pald annual sick leave: Average number of days
at full pay for full-time participants, small estabishments,

1990
Profes-
sional, | Clerical | Produc-
techni- and | tion and
Item dyeeata| cal and} sales | service
related | partici- | partici-
partic | pants | pants
pants
Paid annual sick leave’ by length of
service:
At 1 year 85 11.2 8.3 66
At3 years 10.2 13.9 10.1 7.2
At 5 years 14.5 14.7 12.1 8.0
At 10 years 13.0 15.4 14.8 87
At 15 years 14.0 16.0 16.4 4
At 20 years 14.6 16.5 17.2 95
At 25 years® 14.9 16.8 17.6 98

' Employees earn a specified number of sick leave days per year. This

number may vary by length of service.

2 The average (mean) was virtually the same after longer years of serv-

ice.

NOTE: Computation of average excluded days paid at partial pay and

workers with only partial pay days or zero days of sick leave.

Table. 23..:Paid annual sick leave:' Average-number-of days
at full pay for-full-time participants by accumulation‘policy,

‘small establishments, 1990

Clerical | Produc-
and | tion and
Nem eats sales | service
P partici | partici
pants pants
AU 1 year of service
Cumulative plan as} 100] 84] 80
Noncumulative plan . a3| 123| 82] 58
At years of service
‘Cumulative plan 93} 102; 91] 85
Noncumulative plan .. 108} 175| 107] - 66
At 5 years of service
Cumulative plan .. 97 10.3 98 8.9
Noncumulative plan 127| 190) 136) 76
At 10 years of service
Cumulative plan . 103) 105] 106| 96
Noncumulative plan yag| 202] 175) 83
At 16 years of service
Cumulative plan . tos} 106] 114] 97
Noncumulative plan . 162| 21.2] 197) 88
At 20 years of service
Cumulative plan .. 1o8| 107) 115] 98
Noncumulative plan .. wi] 221) 207| 94
AU25 years of service®
Cumulative plan .. 1o9| 108} 118| 98
Noncumulative plan . 175| 227| 12] 98

' Paid sick leave plans with a specified number of days available each

year.

* “The average (mean) was virtually the same at longer years of service

NOTE: Computation of average excluded days paid at partial pay and
workers with only partial pay days or zero days of sick teave.

|
|



Table 64. Life insurance: Percent of full-time participants in

Pane wih Sb tenor rearnings formulas’ by amount of b:

insurance and maximum coverage provisions, small establishments,

in plans In plans with maximum coverage
Formula Tota | without
maximum All Less than | $50,000- | $100,000- | $250,000- | $500,000- | $1 000,000
coverage $50,000 | $99,999 | $249,999 | $499,099 | $999,999 | or more
Ail participants
Total 100 35 65 3 16 22 16 6 3
Life insurance is equal to annual
‘earnings times?
Less than 1.0 2 - 2 - 1 1 eo - -
48 19 29 1 10 7 6 3 1
S| & | 6] a) eh aye ] 7 6
1
iv) - iy) iv) - - -
30. 9 21 - 1 8 1 2
1 1 - - - - - -
3 1 3 - 1) 0 = is)
5 1 3 1 = - a) =
2 2 is) - - 6 ra) -
Multiple varying with earnings .. 1 - 1 - 0 1 ~ -
Professional, technical, and
related
Total .. 100 a 6 1 7 25 19 4 2
Life insurance is equal to annual ‘
earnings times:*
Less than 1.0 . 2 - 2 - 1 1 ) - -
37 15 at 0 10 6 4 1 1
° ° 7 : "5 1 2 ~ 0
- - 1
i) - () - «) = - - -
39 10 29 - 2 12 13 1 1
) 6 = - - - - - .
3 1 3 - 0 2 ) - -
6 2 4 1 = 3 - e -
0 1 is) 1 - 5 ; 0) iy) -
‘Multiple varying with earnings 1 - 1 - oy ro) 1 .
Clerical and sales
Total 100 36 64 3 13 21 15 9 4
Life ingurance is equal to annual
1 - 1 - 1 is) oy - -
45 16 29 1 9 7 4 7 iv)
% | & | 4 6 " 2 | 6 : 0
4
oy - ) - ° - v . )
31 10 2 - 1 8 8 1 3
1 1 - - - - - - -
3 1 3 - is) 2 i) = te)
4 1 4 2 ~ 2 - ) -
4 a 1 - - ¢) 1 ro) -
Muttiple varying with earnings 1 - 1 - iv) (eo) 1 - -

See footnotes at end of table,



Table 58. Dental care benefits: Percent of full-time

establishments, 1990

participants by extent of coverage for selected procedures, small

Type of dental procedure
Extent of coverage Examina- | Dental x- i Dental Periodontal] Endodon- fcg| Orthodon-
tions rays Fitirgs | irgery’ | Inlays | Crowns |PeToner ‘ies | Prosthetics) OMT Os
All participants
100 100 100 100 100 100 100 100 100 100
100 100 100 99 96 98 98 99 95 63
8 8 8 8 8 8 8 8 8 iv)
Incentive schedule‘ 4 1 1 1 iv) Y 1 1 0 -
Subject to copayment® 4 3 1 4 3 4 3 3 4 4
Percent of usual, custo
and reasonable charge 87 87 85 at 8t 82 82 83 79 55
Less than 60 - - - - - - - = iV) iv)
) 6 7 8 64 64 "1 7 63 45
- - v) 1 4 5 1 1 3 3
1 1 4 4 2 2 4 4 1 1
- @ 3 3 v) iv) 3 3 1) -
16 20 87 87 9 9 54 57 7 1
iv) 2 3 3 1 iy) 3 3 i) -
2 2 2 2 ) ic) 1 1 ra) -
67" 62 9 5 1 1 5 6 2 5
efit”. - a) 4 3 4 3 4 3 4 3
Subject to overall plan
provisions only’ .. ic) 1 1 1 1 1 1 1 1
Not covered - - - 4 2 1 1 5 37
Not determinable - - - iv) - ) - - -
Professional, technical, and
related
100 400 100 100 100 100 100 100 100 100
100 400 100 100 97 98 99 400 93 65
‘Scheduled cash allowance 6 6 6 6 6 6 6 6 6 -
Incentive schedule* 1 1 1 1 0 () 1 1 - :
Subject to copayment® . 5 3 iv) 1 1 2 1 1 2 1
Percent of usual, customary,
and reasonable charge wn.) 88 90 87 85 85 85 85 86 & é
- - - - - - - - )
0 1 41 1 7 70 17 10 68 49
= - i) e) 3 4 iv) (a) 2 2
ia) ) 2 2 e 1 2 2 iv) (7)
- 1 6 6 0) G) 6 6 - -
15 19 58 60 10 10 55 60 7 1
10) 1 3 3 Q 0 3 3 i) -
1 1 1 1 ig) Q 1 1 (a) -
72 67 7 3 ts) rv) 3 4 2 8
Discounted benefit - ic) 5 5 5 5 5 5 5 3
Subject to overall
Provisions onty* (s) is) i) iy] 9) ) i) i] iv) iv]
Not covered .. - - . () a) 7 35
Not determinable - - - - - - - - - -

See footnotes at end of table.

58



Table 15. Paid jury-duty leave: Percent of full-time
employees by number of paid jury-duty leave days
available per occurrence, smail establishments, 1990

Table 16. Paid military leave: Percent of full-time
employees by number of paid military leave days available
per year, small establishments, 1990

Profes- Profes-
sional, Produe- sional, | Gjerigal | Produe-
atten. | Clerical" ton techni- | FCA!) ton
llem-| cal, and Altem-| cal, and
Number of days Ployees| and re- |,°00° | service Number of days loyees| and re- [S215 | service
lated |p S” |employ- lated |°TMPOYjemploy-
lemploy- ees ‘employ ees
ees ees
Total 100 | 100 | 100 Total 100 | 100} 100
Provided paid jury-duty leave .. 64 | 72 | 62} 43 Provided paid military leave 21, 20] 26] 15
Under 10 days 2 1 2 1 Under 5 days iv) 0) - 0)
10 days 3 3 4 2 1] 1 1
2a days 0, (v) 10) () 12 16 14 ?
ys 2 1] 0) 1 1 +} 0
‘Over 20 days 1 1] 0 1 i) 1] () 0
No maximum specified? 48 | 64) 55 | 398 1 1 1 1
‘Number of days not available 0) iv) () - No maximum specified? 6 9 8
Number of days not avai 1 1 1 -
Not provided paid jury-duty leave......] 46 | 28 | 98) 57 we ners
Not provided paid military leave 7] 71} 7] 85

* Less than 0.5 percent.
* Jury-duty leave is provided as needed.

NOTE: Because of rounding, sums of individual items may not equal
totals, Dash indicates no employees in this category.

* Less than 0.5 percent.
* 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.

Table 17. Parental leave: Percent of full-time employees by leave

policy, small establishments, 1990

Profes-
sional, Clerical | Production
All| technical, | and and
Employer leave policy employees! and — | sales em-| service
related | ployees | employees
employees
Total 100 100 100 100
Eligible for parental leave’ .. 198 30 23 13
Eligible for maternity leave 19 29 23 13
Paid days only 2 3 2 1
Unpaid days only 16 26 19 “
Both unpaid and paid days i] co) 1 (0)
Information not available on
type of days 6 i) 1 ®
Not eligible for maternity
leave .. (0) 10) 0) co)
Eligible for paternity leave 8 18 8 6
Paid days only 0. 19) i) 0
Unpaid days only 7 13 8 5
Both unpaid and paid days @ 0 ® i)
Information not available on
type of days (0) i] ie) i)
Not eligibte for paternity
leave W 16 14 7
Not eligible for parental leave 81 70 7 87

* Parental leave includes plans providing maternity leave only, paternity leave only,

and both maternity and paternity leave.
? 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 30. Long-term disability insurance: Percent of full-time participants with benefits based on percent of earnings formula
by maximum monthly benefit, small establishments, 1990—Continued

Total Maximum monthly benefit No
Type of payment Totat | with maxi-
vy maxi- | $1600 | $1501- | $2001- | $2501- | $3001- | $3501- | $4001- | $6001- | $7501- | $10,001] mum
mum! | or less | $2000 | $2500 | $3000 | $3500 | $4000 | $5000 | $7500 | $10,000] or more |payment
Clerical and sates
Total. 100 78 5 5 6 12 2 4 a 9 Ww 1 22
Fixed percent of earnings 96 7 5 5 6 12 2 4 at 9 1 ) 19
Less than 50 percent .. 2 2 1 is) - - - - - - - < i)
‘50 percent .. 7 3 - io) ea - i} 1 1 a) 1 i) 4
55 percent 1 - - - - - - - - L - _ 1
60 percent 7 60 3 5 "1 2 3 17 7 9 ® 4
65 or 67 percent 14 1 e 1 1 - 1 3 1 2 19) 3
70 percent... 1 - - - ea - - 1 fe) - ra) -
More than 70 percent o) - - - - = - . - ~ : u a
Percent varies by earnings 4 1 - - - - - - - ic} - 1 3
Percent varies by service .. 1 ) - ~ - - - - e - = - )
Production and service
Total 100 76 7 6 7 10 3 5 10 W 6 1 24
Fixed percent of earnings 90 74 7 4 17 10 3 5 10 1 6 1 16
Less than 50 percent .. 2 1 is) G) - - - - - - - = 1
13 9 1 re) 6 - - 2 - 1 - 4
oO] - - - - - - - - - ~ 1 6
58 49 3 ou 8 8 3 3 7 10 6 1 9
7 15 3 3 4 2 - io) 2 1 - 2
70 percent... io) fo - - - - - - 10) ~ - - -
Percent varies by earnings ... 10 2 - 2 - - - - - - - - 8
' Maximum payment from plan before offsets are deducted. Excludes ? Less than 0.5 percent.
disability income maximum provisions, which do not restrict LTD payments
unless the level of income guaranteed by the plan plus other nonofisetting NOTE: Because of rounding, sums of individual items may not equal to-
income exceeds a specified percentage of predisabllity earnings or flat dol _—tals. Where applicable, dash indicates no employees in this category.

lar amount.

Table 31. Long-term disability insurance: Percent of
full-time participants by benefit waiting period,’ small
establishments, 1990

Profes-
sional, | Clerical | Produc-
techni- | and | tion and
cal, and| sales | service
related | partici- | partici.
partici- | pants | pants

All par-

Length of waiting period ticipants

pants
Total .. 100 { 100 | 100 | 100
Less than 3 months 6 8 5 3
3 months 40 38 40 43
4-5 months 4 3 5 4
6 months 4 44 40 38
7-11 month: 1 1 2 od
1 year or more 2 2 1 1
Varies by service* 2 1 1 5
Not determinable 4 3 5 5

* Length of time between onset of disability and beginning of LTD pay-
ments.

? Benefits commence after expiration of paid sick le ve and/or sick-
ness and accident insurance benefits.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

32



Table 50. Medical care benefits: Percent of full-time participants in plans with drug abuse treatment benefits by extent of

benefits, small establishments, 1990

Al participants Professional, technical, andj Clerical and sales Production and service
Pa related participants Participants Participants
Coverage limitation Inpatient| inpatient} Out- |Inpatient/Inpatient] Out- |Inpatient|Inpatient| Out- /Inpatient|inpatient| Qut-
detoxifi- | rehabili-} patient | detoxifi- | rehabili-| patient | detoxifi-| rehabiti-| patient | detoxifi- | rehabili- | patient
cation’ | tation? | care* | cation’ | tation® | care® | cation’ | tation? | care? | cation’ | tation? | care?
Total .. 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 ; 100 | 100
With coverage .. 99 7 71 99 7 71 | 100 7 72 99 76 n
Covered the same as other illnesses | 26 6 4 26 6 4 28 8 5 25 5 4
Subject to separate limitations* 73 a 67 73 72 67 7 70 67 74 72 68
Limit on days 46 44 22 48 48 27 47 46 at 44 42 24
Per year . 37 35 20 4 39 23 36 35 19 35 34 19
Per confinement 6 5 6 5 4 - 6 6 ) 6 5 (e)
Per lifetime 5 7 2 4 5 1 7 9 2 4 6 2
Per other period 3 2 2 3 3 4 4 3 2 2 2 1
Limit on dollars 42 42 82 40 41 48 40 39 53 44 44 53
Per day iv) 1 13 ie) 1 13 1 1 14 iv) 1 13
Per year 14 14 34 15 16 31 14 14 37 14 14 34
Per lifetime 33 33 29 31 3 26 32 31 27 36 36 31
Per other period 5 5 4 3 3 2 3 3 2 7 6 6
Coinsurance limit® .. 1" 1 30 8 8 29 9 10 32 13 13 28
Ceiling on out-of-pocket expenses|
does not apply .. 19 19 28 15 15 26 22 a 33 19 19 26
Separate copayment or
deductible .. 2 2 5 5 5 7 2 2 4 2 2 5
Other limitations i) - i) is) - i) i) - iv) 1 = iv)
Without coverage .. 1 23 29 1 23 29 6 23 28 1 24 29

* Detoxification is the systematic use of medication and other methods
under medical supervision to reduce or eliminate the effects of substance
abuse.

? Rehabilitation is designed to alter abusive behavior in patients once
they are free of acute physical and mental complications.

* includes treatment in one or more of the following: Outpatient depart-
ment of a hospital, residential treatment center, organized outpatient clinic,
day-night treatment center, or doctor's office. If benefits differed by loca-
tion of treatment, doctor's office care was tabulated.

* Separate limitations indicate that drug abuse treatment benefits are
more restrictive than benefits for other treatments. For example, if a plan

52

limits inpatient rehabilitation care to 30 days per year, but the limit on inpa-
tient care for any other type of illness is.greater than 30 days per year,
that plan contains separate limits. The total is less than the sum of the in-
dividual items because many plans had more than one type of limitation.

® Less than 0.5 percent.

® Coinsurance rate is lower. than that applying to other. medical serv-
ices, In such cases, outpatient rehabilitation care is generally at a coinsur-
ance rate of 50 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Benefit payments under sickness and accident insur-
ance plans were either a percent of employee earnings or a
flat dollar amount. White-collar participants were more
likely to be covered by plans with earnings-based formulas
than were blue-collar participants.

Under earnings-based formulas, the percent of earnings
was usually fixed—typically 50 to 67 percent—although
some plans varied the percent by length of service or length
of disability. Four-fifths of the participants in earnings-
based plans had a dollar limit on the amount of the weekly
benefit.

Blue-collar workers were the most frequent recipients of
scheduled dollar benefits, which provided either a fixed
weekly amount (usually between $100 and $180) or vary-
ing weekly benefits (usually based on earnings).

Plans that placed a fixed maximum on the number of
weeks of coverage, commonly 26 weeks, covered virtually
all participants.

Three-fourths of the employees with sickness and acci-
dent insurance were required to be on the job for a speci-
fied time before they were covered by the plan. This service
requirement was typically 5 months or less.

Sickness and accident insurance, unlike sick leave, usu-
ally requires a waiting period before benefits begin, most
commonly 1 to 7 days. Waiting periods may be shortened
or eliminated entirely for employees involved in an acci-
dent or who are hospitalized. The waiting period is effec-
tively dropped when sickness and accident insurance is
coordinated with sick leave, because insurance payments
typically start after sick leave pay has ended.

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 ($170 in New York and $261 in New Jersey
during 1990).!°

The State of Hawaii requires that employers provide a
minimum level of temporary disability income protec-
tion—55 percent of earnings to a maximum of $255 per
week 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 un-
able to work for an extended period of time (tables 29-35).
Generally, LTD benefit payments begin after 3 or 6 months
of disability and continue until retirement age, or for a spe-
cified number of months, depending on the employee's age

10 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, Califor-
nia and Rhode Island also have mandated temporary disability insur-
ance plans, but these plans require no employer contribution and, thus,
are not included in this survey.

18

at time of disability. In most instances, the LTD payments
take the form of a percent of predisability earnings.

Of the full-time employees covered by the survey,. 19
percent had LTD coverage; 16 percent of those employees
with coverage were required to contribute towards the cost
of their plan. Of those with jointly financed LTD plans,
one-third could choose from various options under a “caf-
eteria plan,” with employee contributions varying by the
mix of benefits selected. (See chapter 7 for additional infor-
mation on cafeteria plans.) Another one-third contributed
a monthly amount per $100 of covered earnings, with the
most common rate between 20.and 39 cents per $100 of
coverage."!

Service requirements were imposed upon three-fifths of
the LTD participants before they were covered by their
plan. One-third of participants had service requirements
of 1 to 3 months and 1 in 10 had service requirements of 1
year or more. It was rare for LTD participants to be in plans
that required an employee to have reached a certain age to
be eligible for the benefit.

The degree of participation varied widely among the
employee groups, with white-collar workers more than
three times as likely to have LTD insurance as blue-collar
workers. However, some employees not covered under
LTD insurance are eligible for an immediate disability pen-
sion through their retirement plan (see chapter 6).

Two-fifths of the full-time participants had to wait 3
months, and another two-fifths had to wait 6 months after
the disability occurred before beginning to receive LTD
payments. For other participants, LTD benefits com-
menced after sick leave and sickness and accident insur-
ance benefits ended.

Nearly 9 out of 10 participants received their LTD bene-
fit as a fixed percent of predisability earnings. The most
common benefit was 60 percent of monthly pay. Most of
these plans set a limit on maximum monthly payments.
These maximums commonly ranged between $4,001 and
$10,000; the average was $4,767.

One third of the participants were in plans that imposed
a maximum on all sources of disability income. Such ceil-
ings affect benefits only if the amount payable from the
Lp plan plus income from outside sources, such as teha-
bilitative employment and all Social Security payments,
exceeded a specified percentage (most commonly 70 or 75
percent) of predisability earnings.

Survivor benefits, payable to an eligible dependent upon
the death of a disabled employee, were available in plans
covering about half of the LTD participants. These benefits
usually took the form of a lump-sum payment (most often
equal to 3 times the monthly LTD benefit) or a percent of
the monthly LTD benefit paid for a fixed number of

11 Covered earnings are that portion of a worker’s earnings to which
the replacement rate formula is applied. For example, ifan LTD plan pays
60 percent of earnings with a maximum monthly benefit of $3,000, cov-
ered earnings would be $5,000 ($3,000 is 60 percent of $5,000).



Table 83. Summary: Percent of full-time employees participating’ in selected employee benefit programs, small

independent businesses,” 1990

Profes- Profes-
sional, Produc: sional, | ericat |ProdUC-
techni. | "ca!" tion techni. |letCal tion
Employee benefit program jloyess ana ets, one Employee benefit program ovens an sales one
lated. |°P%O% lemploy. lated OMY employ:
lemploy- ees lempioy-| ees
ees ees

Paid: Dental care—continued
Holidays st} 95} 90 | 71 |) Family coverage:

Vacations es | 95 | 92] 80 Wholly employer financed . 9} wo] 9] 9

Personal leave wo | i} 2] 6 Partly employer financed | at | a7] 40

Lunch period 8) 8] 8] 9

Rest time 46 | 47} 43 | 48 [Lite insurance s7| 75 | 62] 49

Funeral leave se | 62 | 44 | 30 Wholly employer financed a7] 64} 52| 39

Jury duty leave 47 | 67 | 83 | 37 Partly employer financed .. wo] 1] 10] 10

Military leave 1s | 22 | wl 14

Sick leave 40 | 68 | 51 | 25 |Allretirement® 3 | 43} 96 | 33

Maternity leave 2, 3] 3| 4

Paternity leave oO oO ) ) [Defined benefit pension 12 W 10 13
Wholly employer financed 4} iw) 9] 12

Unpaid: Partly employer financed 1 2 1 4
Maternity leave 14 23 16 10
Paternity leave 7| 48 | 8 |.- 5 {Defined contrioution® 2e| 98} 32] 22

Uses of fund:

Sickness and accident insurance 23 | 24! 22 | 23 Ratirement® 26 | 96 | 29) 21
Wholly employer financed ... 1a} is | 43 | 48 Woolly empioye w| w| 7] 48
Partly employer financed . e| tw} 9| 8 Partly-employer financed to] 17] 23] 6

Capital accumulation® 2) 4] 3] 4

Long-term disability insurance .. 14 32 7 6 Wholly employer financed’ 1 2 2 “4
Wholly employer financed 2] 2| wl 6 Partly employer financed . 1 2) 2] 4
Partly employer financed . 1 4| 2] © |] Types of plans:

‘Savings and thrift 7\/ 19) w] 4

Medical care .. 67 | 93} 73] 88 Deferred profit sharing . 14] 15) 16] 19

Employee coverage: Employee stock ownership 1 2/010
Wholly employer financed . a | 61] 43 | 36 Money purchase pension 7| wl o7/] 6
Partly employer financed . 2e| 32] at | 22 Stock bonus -| =] -| -

Family coverage: Simplified employee pension 1 1 11 0
Wholly employer financed 23] 25 | 23] 21
Partly employer financed . 44 | 88 | 50 |. 37 |[Stock option . 0 -| 0 -

Dental care 23} 30 | 26 | 19 [Stock purchase -) -] -|--

Employee coverage:

‘Wholly employer financed ... 14.| 17 | 15 | 18 j\Cash only profit-sharing -j -] -] -
Parily employer financed 9) 13] 4 8
Flexible benefits plans =. olo]loe)o
Reimbursement accounts .. sion s| 3

* Participants are workers covered by a paid time off, insurance, re-
tirement, or capital accumulation 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. Benefits for which the employee must pay the
full premium are outside the scope of the survey. Only-current employ
ees are counted as participants; retirees are excluded.

2 See appendix A for scope of study.

® Includes defined benefit pension plans and defined contribution re-
tirement plans, The total is less than the sum of the individual items be-
cause many employees participated in both types of plans.

* Less than 0.5 percent.

® The total is less than the sum of the individual items because some
employees participated in both retirement and capital accumulation

85

plans, and in more than one type of plan.

® Plans were counted as retirement plans if employer contributions
had to remain in the participant's account until retirement age, death,
disability, separation from service, age 59 1/2, or hardship.

7 Employees participating in two or more plans were counted as par-
ipants in wholly employer-financed plans only if all plans were noncon-
tributory.

® Includes plans in which employer contributions may be withdrawn
from participant's account prior to retirement age, death, disability, sepa-
ration from service, age 59 1/2, or hardship.

NOTE: Because of rounding, sums of individual items may not equal
totals. Where applicable, dash indicates no employees in this category,
In a few instances, the figures differ slightly from those published in the
June 10, 1991 news release, USDL 91-260



were most commonly between $50 and $200 per hospital
admission. In 1990, nearly one-fifth of HMO participants in
small establishments had a separate hospital admission de-
ductible.

Finally, some cost containment measures encouraged
alternative means of obtaining prescription drugs. Nearly
one-sixth of fee-for-service participants received higher re-
imbursement for obtaining generic rather than brand
name prescription drugs. Mail order drugs were available
to fewer than one-tenth of participants. In such arrange-
ments, participants often receive a higher reimbursement
or are charged less for mail order drugs than for drugs pur-
chased over the counter.

Other medical benefits

The 1990 survey measured the incidence of several oth-
er services provided through medical care plans (table 52).
For example, one-fourth of medical care participants were
in plans that covered at least some of the costs for routine
physical examinations and nearly three-tenths had at least
partial coverage for organ transplants. HMO’s nearly al-
ways included coverage for hearing care, physical exami-
nations, well-baby care, and immunizations and inocula-
tions. The main reason for such a high incidence of these
services is that HMO's are required to include these benefits
to qualify under the Health Maintenance Organization
Act of 1973, as amended.”

Employee contributions

Nearly three-fifths of full-time participants had their in-
dividual medical coverage wholly financed by their em-
ployers in 1990. One-third of participants received fully
paid family coverage (tables 53-55),

Data on the amount of an employee's contributions for
medical benefits occasionally were not available because a
single payroll deduction applied to both medical care and
One or more other benefits. Where the amount was re-
ported, employee premiums for individual and family cov-
erage averaged $25 and $109 a month, respectively.

Employee medical care premiums showed some varia-
tion by type of plan. Slightly more than one-half of full-
time participants in HMO's were required to contribute for
single coverage and just over three-fourths for family cov-
erage, compared to two-fifths and two-thirds, respectively,
for non-HMO’'s, The average premiums for individual and
family coverage were higher for participants in HMO’s than
for those in non-HMO’s; in fact, average employee contri-
butions for family coverage in HMO’s were $30 per month
higher than in non-HMo’s,

Of employees required to contribute toward the cost of
their medical care coverage in 1990, about one-seventh

19 Under this act, an HMO must provide certain coverage, such as
home health care, physical examinations, and children’s eye and ear ex-
aminations. Under certain circumstances, employers may be required to
offer employees medical care coverage through Federally qualified
HMO's.

39

could do so with pretax dollars. These employees had the
advantage of reducing their taxable income while purchas-
ing medical coverage. Pretax contributions may be re-
quired or optional, and are often offered as part of a flex-
ible benefits arrangement.

Participation requirements

Medical care plans typically required that only a short
eligibility period, if any, be served by new employees be-
fore coverage began (table 56). Just over two-fifths of med-
ical care plan participants were allowed to join a plan im-
mediately upon being hired. For participants required to
complete a minimum length of service, the required period
was usually 3 months or less. For one-fourth of partici-
pants, the service requirement was not determinable, usu-
ally because plan documents (typically prepared by a
health coverage provider) did not include the employer’s
eligibility provisions.

Coverage for retired workers

Although the Consolidated Omnibus Budget Reconcili-
ation 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 addi-
tion, the continuation period stipulated by the law is lim-
ited.

The survey of small establishments focused on coverage
for retired employees that was financed wholly or partly
by the employer (table 57).

Of the medical care participants in the survey, nearly
one-sixth worked for employers who financed, at least in
part, medical care protection after retirement. The vast
majority of workers would receive post retirement cover-
age regardless of their age. Slightly over two-fifths of the
workers in plans with employer-financed post retirement
medical coverage did not have to meet eligibility require-
ments. Where an eligibility requirement was imposed, the
requirement was usually either a stated length of service or
qualification for the company pension plan.

The level of medical care coverage for retirees under age
65 was generally the same as for active workers. Although
benefit provisions were reduced for some retirees upon
reaching age 65, more commonly there was no change in
benefit levels apart from coordination with Medicare.

Dental Care

Dental care benefits were available to three-tenth of full-
time employees in small establishments in 1990 (tables
58-62). Dental care may be offered as part of a comprehen-

20 The act requires employers who maintain health insurance plans to
continue coverage to terminated workers for up to 18 months. 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.



Chapter 7. Plan Administration

In addition to thé data on individual benefit plans, the
survey explored how insurance and retirement benefits
were administered and financed,’ and whether benefits
“were offered independently or as part of a flexible benefits
program.

Plan sponsor

Single employers were: the predominant sponsors of
Most major benefit plans offered to full-time workers in
the’1990 small establishment survey (table 80). ‘A large
majority of participants in life insurance, health care, long-
term disability insurance, and defined benefit pension
plans were in single-employer plans. Just over one-half of
sickness and accident insurance participants were in sing-
le-employer plans; most of the remaining participants
were covered by State-mandated temporary disability in-
surance benefit plans.” (State plans are discussed in
chapter 5.)

Multiemployer plans: typically result from collective
bargaining agreements between employers within an in-
dustry or related industries and one or more labor unions.
These plans allow employees moving from one employer
to another within an industry to receive the same or similar
benefits. Defined benefit pension plans were by far the
most common benefit sponsored by multiemployer
groups, and production-service employees were the most
likely recipients of such a benefit. Other benefits often
sponsored by multiemployer groups included health care
and sickness and accident insurance.

Multiemployer defined benefit pension plans are found
much more frequently in small establishments (fewer than
100 employees) than in medium and large establishments.
The larger representation of multiemployer plans in small
establishments results from the high incidence of small es-
tablishments in such industries as contract construction
and trucking.

Plan financing

Generally, there were many more participants in wholly
employer-financed plans than in partly employer-financed
plans (table 81). Employee contributions were most often

“© Mandatory benefits were also included for railroad employees.
A small number of workers received sickness and accident insurance
through the Railroad Unemployment Insurance Act, and defined
benefit pension plans through Tier 2 of Railroad Retirement. Railroad
Retirement is a federally mandated defined benefit pension plan
for employees in the railroad and related industries; Tier 2 resembles
a private plan.

80

required for medical and dental care, particularly for fami-
ly coverage. In fact, more than three-fifths of the medical
and dental care plan participants were required to contrib-
ute toward the cost of family coverage.

For almost all benefits, a greater percentage of blue-col-
lar workers than white-collar workers participated in
wholly employer-financed plans. The exceptions were life
insurance plans, where wholly employer-financed plans
were more common for white-collar workers, and long-
term disability insurance, where the ratio of contributory
to noncontributory plans was similar for all occupational

groups.

Flexible benefits plans and reimbursement
accounts

Employers have traditionally offered their workers
benefit plans in a number of areas, such as medical care,
life insurance, capital accumulation plans, and retirement
benefits. Employees may have a choice between one or
more plans in a benefit area. For example, the employee
may be offered a choice between a traditional fee-for-ser-
vice medical plan and a health maintenance organization,
but plans in each benefit area are offered separately. In re-
cent years, new approaches to offering benefits have
emerged. BLS currently collects data on two such arrange-
ments for offering benefits—flexible benefits plans and re-
imbursement accounts.

Full-time employees in small establishments rarely were
offered flexible benefits plans (table 82). Such plans, often
called cafeteria plans, allow employees to design individu-
al benefit packages by choosing between two or more types
of benefits. Most commonly, an employee was able to
choose from a menu of medical care benefits, dental plans,
and varying levels of life and long-term disability insur-
ance, as well as the option of purchasing extra days of va-
cation. Other options offered included vision care benefits,
sickness and accident insurance, and cash in lieu of bene-
fits.

Generally, an amount of “credits” or employer money is
allocated to the employee who may then contribute addi-
tional funds if the cost of the benefits chosen exceeds the
employer’s allotment. In some plans, the employee is re-
quired to purchase a minimum amount of some benefits.
For instance, an employee may have to choose a medical
care plan and purchase a certain level of life insurance.

Reimbursement accounts were offered to nearly 1 in 10
full-time employees covered by the 1990 small establish-



Table 56. Medical. care benefits’: Percent. of full-time
participants by length-of-service requirements for participa-
tion,’ small establishments, 1990

Table.57.. Medical care benefits’: Percent of full-time
participants by provision for coverage after retirement, small
establishments, 1990

Profes- Profes-
sional, | Clerical | Produc- sional, | Clerical | Produe-
. At par-| techni: | “and | tion and Al par. | techni: | and tion and
_ Length-ot-service requirement. | /N'P@"- | cal, and| sales | service Provision telpants [2h and| sales | service
ip related | partici- | particl- ip related | partici- | partici-
partici- | pants | pants partici- | pants | pants
pants pants
Total . 100 | 100 | 100 | 100 Total 100 | 100 | 100 | 100
With service requirement .. so | 24 | 2 | 33 With employer-financed retiree
1 month W W 12 9 coverage” .. 15 16 7 13
2.months 5 4 4 7
months 10 7} wo] 1 For retirees under age 65 only...) 2 1 2
4-5 months .. 1 7) 1 2 For retirees 65 and over only ..... 2 4 2 1
6 months 2 1 1 2 For all retirees . oT to | 13 | 10
7-11 months 1] @ 1 1
1 year ia) i) iG) Benefits cancelled on retirement or
Over 1 year 0 7) - to) financed wholly by retiree ea | 82 | a1 86
Without service requirement 44 | s2 | 46 | 36 Data not available 2 3 2 1
Service requirement not * Plans providing services or payments for services rendered in the
determinable a | 4 | % | 28 hospital or by a physician. Excludes plans that provided only dental, vi-
sion, or prescription drug coverage.

‘ Plans providing services or payments for services rendered
hospital or by a physician. Excludes plans that provided only dental, vision,
‘oF prescription drug coverage.

* Length of time employees must be on the job before they are cov-
ered by a plan that is at least partially employer financed. There is fre-
quently an administrative time lag between completion of the requirement
and the actual start of participation. If the lag was 1 month or more, it was
included in the service requirement. Minimum age requirements are rare.

® Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

57

* Includes plans financed wholly by employers and plans financed
jointly by employers and retirees.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



ment survey. A greater proportion of white-collar tnan
blue-collar workers in small establishments were eligible.
These accounts, also called flexible spending accounts,
provide funds from which employees pay for expenses not
covered by their regular benefits package. Commonly,
medical care reimbursement accounts could be used to
pay for deductibles, the employee’s coinsurance, and for
services not covered under a medical care plan. Dependent
care accounts could be used to reimburse the employee for
expenses associated with the care of dependent children
and adults. Additionally, many accounts allowed for the
pretax payment of medical care and other insurance pre-
miums.

Reimbursement accounts are usually funded solely by
employee pretax money, although some accounts are
funded either wholly or partially by employers. Reim-
bursement accounts may be part of a flexible benefits plan
or they may stand alone.

More than three-quarters of employees eligible for reim-
bursement accounts could allocate funds for medical care
deductibles and coinsurance and for other health expenses

81

not covered by their medical care plan. Nearly all eligible
employees could use money from these accounts to pay for
dependent care expenses, generally both child care and
care for elderly or disabled relatives. Reimbursement ac-
count funds could also be allocated for the payment of the
employees’ share of health care premiums, other insurance
premiums, such as life insurance or a spouse’s insurance
premiums, and legal services.

Nine of 10 employees participating in flexible benefits
plans or reimbursement accounts were required to con-
tribute toward the cost of their benefits, or were allowed to
contribute to obtain additional benefits. Nearly all of these
contributions were in the form of a salary reduction ar-
rangement, which resulted in lower income tax liabilities.

Individual benefit plans offered through a flexible bene-
fits plan were analyzed and included in the tabulations for
spécific benefit areas in this bulletin.”

41 For information on flexible benefits plans in medium and large pri-
vate establishments, see Joseph R. Meisenheimer and William J. Wia-
trowski, “Flexible benefits plans: employees who have a choice,”:
Monthly Labor Review, December 1989, pp. 17-23.



Table 26. Sickness and accident insurance: Percent of full-time participants by type and duration of payments, small
establishments, 1990—Continued

Maximum weeks of coverage
Type of payment Total Thess than Varies by
os ‘3 13 14-25 26 27-54 52 Over 52 | “Sohice
Production and
service
All types .. 100 2 17 1 74 1 3 ) 1
Fixed percent of earning: 55 2 6 0 45 iv) 1 ) 1
Less than 50... ) - - ~ Q 10) - - -
50 27 0 1 ) 25 - - - 1
60 8 1 4 - 4 - 0) - -
66 ( - _ - ) - - : -
6 16 1 1 0”) 14 - - - r0)
70 2 - 1 - 1 - ~ - -
7 1 - O) - 0) - 0) c) -
a 0) - - ) - - - - -
Other percer 1 - - - 1 - - Y
Percent of earnings varies .. 2 rv) 0) 1 Q) - - iv)
By service 1 - () - 1 0) -
By length of disability ) ) - - - - - - -
By both service and length of
disability 0) - - - - - - - iv)
Fixed weekly dollar benefit 4 0) 1 1 26 0) 2 - -
Less than $60 2 - 1 - 1 - - - -
$60-$79 4 - 2 0 1 - 1 - -
$80-$99 1 - 1 - ) - - - -
$100-$119 12 - 3 0) 9 - 0 - >
$120-$139 5 0) 1 Q 3 iv) - - -
$140-$159 7 - 1 i) 6 - - - -
$160-$179 4 - - - 3 iv) 4 - -
$180-$199 2 - - - 2 - ) - -
$200-8219 2 - 0) 1 - = - -
$220 or more 3 Y 2 - 1 - v) - -
Weekly dollar benefit varies 2 - Q - 1 - iv) i)
By earnings .... 2 - 0) - 1 - oO - -
By service or length of disability.) (') - - - - - - i) -
* Less than 0.5 percent, NOTE: Because of rounding, sums of individual items may not equal to-

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



table of the percent of full-time workers receiving:

White collar ‘Blue collar
Paid sick leave .. . 4 29
Paid jury-duty leav 66 B

When paid leave was provided, covered employees re-
ceived, on average:

@ 10 holidays each year;

e Vacations of 8 days at 1-year of service,

14 days at 10 years, and 15 days at 20 years;

3 days of funeral leave per occurrence;

@ 11 days of military leave per year;

e Jury duty as needed.

Unpaid maternity leave was available to 17 percent of
all full-time workers and unpaid paternity leave to 8 per-
cent. Such benefits are separate from vacations, sick leave,
and other time-off provisions that also, may be available to
new parents. The average length of unpaid parental leave
was about 13 weeks. Paid parental leave was rare.

Disability benefits

Employees may be protected from loss of income during
short-term illnesses or injuries by sick leave, sickness. and
accident insurance, or both. Half of the: full-time em-
ployees in small establishments had sick leave coverage in
1990 and one-quarter had sickness and accident insurance
coverage. For longer term or permanent disabilities, long-
term disability insurance ‘may be available to provide. in-
come replacement. While 19 percent of all full-time work-
ers had such coverage, three-times as many white-collar as
blue-collar workers received this protection.

Short-term disability benefit. plans, on average, pro-
vided sick leave-of 12 days per year with full pay at 5 years
of service; and sickness’and accident insurance benefits
commonly for 26 weeks at 50 or 67 percent of regular pay.

“Long-term disability insurance typically replaced 60
percent of regular pay, providing pay after 3 or 6 months
of disability.

Medical, dental, and vision care, and life
insurance

Medical care was among the most widespread benefit
provided to full-time employees in small establishments—
seven-tenths of workers:participated in such plans. The
availability of other health-related benefits was less preva-
lent—three-tenths of full-time employees participated in a
dental care plan and one-tenth had vision care coverage.
There was little variation in health care benefits among oc-
cupational groups.

For full-time employees participating. in ‘medical care
plans: -

e Nearly three-fifths were in plans paid for entirely by

the employer for individual medical care, and one-
third for family. coverage. Where workers contrib-

uted, their average monthly premiums were $25 for
individual coverage and $109 for family coverage.

13, percent participated in plans with a preferred pro-
vider option. Participants: choosing the option re-
ceived care at lower costs if treatment was provided
by designated hospitals or physicians.

© 14 percent participated in health maintenance organi-
zation plans.

Among dental care participants:

@ Virtually all had coverage for preventive arid:restor-
ative dental procedures, while nearly two-thirds: had

» coverage for orthodontia;

@ The majority were covered by plans that imposed an-
nual limits on dental. expenses, typically: $1,000;

Life insurance protection was available to nearly two-

thirds of full-time employees in small establishments in
1990—three-fourths of white-collar and slightly over-half
of blue-collar employees:

Among full-time employees with life insurance protec-

tion:

Nearly two-thirds were: covered by life insurance
based on a flat dollar amount; this was more com-
mon among blue-collar than white-collar: partici-
D2TtS;

@ One-quarter had insurance available on the lives of
their spouses, although the majority had to pay the
entire premium for such coverage;

e Fewer than 1 in 5 were in plans that continued em-
ployer-financed life insurance coverage after retire-
ment.

Defined benefit pension and defined contribution
plans

About two-fifths of all full-time workers were covered
by at least one retirement plan in 1990. Defined contribu-
‘tion plans, which specify employer and employee contri-
butions but do not guarantee future benefits, were the most
frequently observed form of retirement and capital accu-
mulation plan. Such plans can be vehicles for financing re-
tirement benefits if funds can not be withdrawn easily, or
they may be shorter term capital accumulation plans if pe-
riddic withdrawals are allowed. Defined contribution
plans were available to three-tenths of the full-time work-
ers, and were more’common among white-collar than
blue-collar workers. There are several types of defined
contribution plans: Savings and thrift, profit sharing,
money purchase pension, employee stock ownership,
stock bonus, and simplified employee pension (SEP).

The most frequently observed types of defined contribu-
tion plan. were. deferred. profit sharing and savings and
thrift:plans. For participants in these plans:

@ Nearly all savings and thrift plan participants were re-
quired or allowed to contribute funds on a pretax
basis, deferring income taxes until funds are re-
ceived from the plan;



of limit. Other plans required an employee copayment or
offered a discount on the purchase of eyeglasses and con-
tact lenses.

One-fifth of the vision care participants had eye exami-
nations paid in full. Eyeglasses were covered in full for
one-eighth of the participants, while contact lenses were
rarely covered in full.

Finally, an eighth of the medical participants were cov-

41

ered for eye examinations only (table 52). This coverage
was not part of a regular vision care plan. Such limited
benefits were typically provided through the employee’s
HMo.*5

25 For more details on vision care benefits, see Rita S. Jain, “Em-
ployer-sponsored vision care brought into focus,” Monthly Labor Re-
view, September 1988, pp. 19-23.



Chapter 1. Incidence of Employee Benefit Plans

The 1990 Employee Benefits Survey covered establish-
ments with fewer than 100 employees. These establish-
ments had less extensive employee benefits coverage than
the medium and large establishments (those with 100
workers or more) surveyed in 1989, as shown below:

Percent of employees participating in benefit plans

Medium and large
Small establishments, establishments,
1990 1989
Benefit Full Part Full-time
Total time time employees only
Paid holidays 72 848 97
Paid vacations 7% 88 29 97
Unpaid maternity
14 17 4 37
6 8 2 18
5669 6 92
52 O64 6 94
3642 10 gt

The Bureau’s 1990 survey of small private industry es-
tablishments provides data on employee work schedules
and develops information on the incidence and detailed
characteristics of employee benefits paid for, at least in
part, by the employer.' These benefits include paid lunch
and rest periods; holidays, vacations, and personal, funer-
al, jury-duty, military, parental, and sick leave; sickness
and accident, long-term disability, and life insurance;
medical, dental, and vision care; and private retirement
and capital accumulation plans. Because data presented in
this bulletin are limited to formal plans, the extent of such
benefits as rest periods and personal leave may be under-
stated.

Data also are collected on the incidence of several other
benefits, including severance pay, subsidized parking, fi-
nancial counseling, child care assistance, wellness pro-

! There are a few exceptions to this general rule, The survey provides
estimates on the availability of postretirement medical care and life in-
surance, dependent life insurance, supplemental life insurance, and long-
term care insurance even if such coverage must be fully paid for by an
employee or retiree. This is because the guarantee of insurability and
availability of coverage at group premium rates can be considered a bene-
fit. In addition, reimbursement accounts, salary reduction plans, and pa-
rental leave plans are tabulated even if there is no employer cost involved,
beyond administrative expenses.

grams, employee assistance programs, and educational as-
sistance. In addition, information was obtained on flexible
benefits plans, reimbursement accounts, and unpaid pa-
rental leave.

For the 1990 survey of benefits in small private estab-
lishments, information was collected for both full-time
and part-time employees. (Employees were classified as ei-
ther full-time or part-time in accordance with practices of
the surveyed establishments. Part-time workers typically
are scheduled to work fewer hours per week than full-time
workers engaged in the same type of work activity.)

The majority of full-time workers within the scope of
the Employee Benefits Survey were provided? medical
care benefits, life insurance, paid holidays, and paid vaca-
tions (table 1). Among other benefits studied and com-
monly available in 1990 was employer-subsidized parking
(table 2).

Time-off benefits

Paid holidays and vacations were available to over 80
percent of full-time employees in small establishments in
1990.3 In contrast, paid military leave was provided to 21
percent of workers and paid personal leave was provided
to 11 percent of workers.* About half the full-time workers
received paid funeral and jury-duty leave and formal paid
rest periods, while fewer than one-tenth had formal paid
lunch periods.

In general, white-collar workers were more likely to re-
ceive formal paid time-off benefits than were their blue-
collar counterparts. This trend was most pronounced for
sick leave and jury-duty leave, as seen in the following

\

2 Data were collected on the number of workers “participating” in
benefit plans. All workers were considered participants in wholly em-
ployer-financed plans that require a minimum length of service, even if
‘some workers had not met those requirements at the time of the survey.
Where plans—such as medical care or life insurance—required an em-
ployee to pay part of the cost (contributory plans), workers were consid-
ered participants only if they clected the plan.

3 In addition to data on all full-time employees in small establish-
ments, data are presented separately for three occupational groups—
professional, technical, and related; clerical and sales; and production
and service workers. This bulletin often discusses the first two groups
jointly as white-collar workers, in contrast with production and service,
or blue-collar, workers. Occupational groups differ from earlier studies;
see Appendix A for further details.

4 Workers covered by a plan were labeled participants whether or not
they used a benefit. For example, while the tables in this bulletin describe
the provisions of sick or parental leave plans, they do not indicate the
number of employees using these benefits or the amount of leave time
taken.



X-ray and laboratory services {table 36). With few excep-
tions, coverage included physicians’ office visits, mental
health conditions, and out-of hospital prescription drugs.
Virtually all participants were covered by inpatient alco-
hol and drug detoxification benefits. Coverage was some-
what less extensive for inpatient and outpatient substance
abuse rehabilitation benefits.

Among benefits less frequently provided were hearing
care (16 percent), routine physical exams (26 percent),
well-baby care (32 percent), and: immunizations and in-
octlations (23 percent).

Funding arrangements

In 1990, three-fourths of full-time medical plan partici-
pants in small establishments were covered by a fee-for-
service medical plan (table 37). These plans pay for specif-
ic medical procedures as expenses are incurred. There are
three major arrangements for financing plan benefits: self-
insured plans, commercially insured plans, and Blue
Cross/Blue Shield plans, each covering approximately
one-third of the fee-for-service plan participants. Self-in-
sured plans (where the plan sponsor—typically the em-
ployer—bore the financial risk for making plan payments)
covered one-fourth of fee-for-service participants in small
establishments.

Preferred provider organizations (PPO's) covered an
eighth of medical care participants in small establishments
in 1990. ppo's offer a higher benefit 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. (See chart 1.)

Fourteen percent of medical care participants covered
by the survey were enrolled in health maintenance organi-
zations (HMO’s). HMO's provide a prescribed set of benefits
to enrollees for a fixed payment. The HMO thus bears the
risk associated with delivering care."

HMO's are classified in this survey as either the group/
staff type, with services provided in central facilities, or as
individual practice associations (IPA’s), with providers
working from their own offices. The following tabulation
shows the percent of HMO participants by type of plan for
small establishments in 1990:

Plan type Percent of.
participants
Group/staff.......... ro)
Individual Practice Association 34

Combination 4

HMO plans rarely had an open enrollment option. In
such plans, an enrollee has the ability to use health care
providers outside of the HMO, although reimbursement of

12 For a more detailed discussion on HMO’s, see Thomas P, Burke and
Rita S. Jain, “Trends in Employer-provided Health Care Benefits,”
Monthly Labor Review, February 1991, pp. 24-30.

35

expenses is less than if the HMO providers are used.

Payment arrangements

Medical plan provisions were examined to determine
the extent of coverage for each type of medical service. In
this survey, each category of medical care is classified un-
der one of four payment arrangements: Full coverage, cov-
erage with internal (separate) limitations only, coverage
with overall limitations only, or coverage with internal and
overall limitations (table 36).

Full coverage for HMO’s indicates no restrictions on the
number of days of care, no dollar maximums on benefits,
and no required payments by the covered individual. Ina
fee-for-service plan, when a benefit is covered in full, all
expenses up to the usual, reasonable, and customary
charges, or the prevailing hospital semiprivate rate, are
borne by the plan.

Separate limitations restrict the level of coverage for a
particular type of medical service, independent of other
plan provisions. An example of a separate limit is a maxi-
mum of 45 days of hospitalization per year for mental
health care.

Overall limitations are deductibles, coinsurance re-
quirements, maximum benefit levels, or other provisions
that apply to many, if not all, types of medical care pro-
vided under the plan. Examples of overall limits include a
requirement that the employee pay the first $100 of ex-
penses.in a year, regardless of the source of the expense,
before the plan will begin payments (deductible); a re-
quirement that the employee pay 20 percent of covered ex-
penses beyond the deductible (coinsurance); a $1,000 limit
on the amount the employee-must pay, after which the
plan pays 100 percent of covered expenses (maximum out-
of-pocket expense); and a lifetime ceiling on plan pay-
ments of $1 million (maximum). Plans often apply overall
limits to protect against high risks posed by a small pro-
portion of participants.

HMO’s generally do not impose any overall limits on the
benefits they provide, Traditional fee-for-service plans, on
the other hand, almost always impose overall limitations
on their benefits. The most common type of payment ar-
rangement in fee-for-service plans is coverage subject to
overall limitations only. Under such an arrangement, the
employee must satisfy the deductible and meet the coinsu-
rance requirement before any benefits are paid. Nearly
three-fifths of all participants in plans with hospital room
and board benefits had coverage subject to overall limita-
tions only. Other services for which the majority of plan
participants had coverage subject to overall limits only
were physicians’ office visits, in-hospital physician ser-
vices, diagnostic X-rays and laboratory services, outpa-
tient prescription drugs, inpatient surgery, and outpatient
surgery.

The predominance of fee-for-service plans with cover-
age subject to overall limits only is at least partly the result
of rapidly growing costs of medical care throughout the



Table 11. Paid vacations: Percent of full-time participants
by unused vacation policy, small establishments, 1990

Profes..
sional, | Clerical | Produc-
techni- and | tion and
Policy a par, |cal. and| sales | service
‘cipants | ‘elated | partici- | partici
partici- | pants | pants
pants
Total 100 100 100 100
Carryover only at 34 24 15
‘Cash-in only abl 7 10 13
Carryover and cash-in « 8 9 6 8
Unused benefit lost 56 47 59 67
Data not available .. 5 3 4 6

NOTE: Because of rounding, sums of individual items may not equal to-

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

Table 13. Paid personal leave: Percent of full-time
employees by number of pald personal leave days
provided per year, small establishments, 1990

Table 12. Paid vacations: Average number of days for
full-time participants by length of service and cash-
In/carryover provisions, small establishments,

1990

Cash-in, No cash-in
Length of service | Allplans | carryover, | C@rvover oy

‘or both Y | carryover
At year 76 841 93 7.3
At 3 years .. 10.0 10.2 14 98
At 5 years .. 11.5 11.8 13.0 11.2
At 10 years: 13.6 13.8 15.1 13.2
At 15 years 14.5 14.8 16.3 14.2
At 20 years 15.0 15.3 16.8 14.7
At 25 years 15.3 15.6 17.2 15.0
At 30 years 15.3 16.6 17.3 15.0

NOTE: Computations of average excluded workers with zero vacation

Table 14. Paid funeral leave: Percent of full-time
employees by number of paid funeral leave days available
per occurrence, small establishments, 1990

Profes- Profes-
sional, | oi5,ica | Produe- sional, | 6 j-ricay |Produc-
techni | Hrical) "tion techni Clerical)" Yon
Allem-| cal, and Allem-| cal, and
Number of days ployees| and re- enn _| service Number of days ployees| and re- Renta _| service
lated |°"ROY lemploy- lated [°ME SY lemploy-
employ-| ees lemploy-, 8s
ees ees
Total 100 100 100 100 100 100 100
Provided paid personal teave 1] 47] 18 7 Provided p: az | s7| 54] 38
1 day 2 3 3 1 1 day 3 4 3 3
2 days 3 4 5 2 2 days 4 3 3 5
3 days 2 3 2 2 3 days 90} 35 | 96 | 25
4 days 1 3 1/0 4 days 1 2 1/0
5 days 1 1 1 () 5 days 4 7 5 1
More than 5 days 1 2 1 1 More than 5 days Y -1 0 | ¢
No maximum specifies 1 1 1 1 No maximum specifies 4 6 3
Varias by length of service 0) 7, O 7 0 Varies by length of service . ao; oro -
Number of days not available Ooo] a - Not provided paid funeral x so | a3 ole
provided paid funeral leave ........ 4 2
Not provided paid personal leave so | 83 | 87] 93
Number of days varies by relation-
shi os
” Lose than 0.5 paoont ship to deceas wo} 14) 13 7

® Personal leave is provided as needed.

NOTE: Because of rounding, sums of individual items may not equat
totals. Where applicable, dash indicates no employees in this category.

14

* Less than 0.5 percent.

? The maximum number of days provided for any occurrence was in-
cluded in the distribution of funeral leave days.

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



Table 3.. Work schedules: Percent of full-time employees
by.number of hours. scheduled per week,' small establish-
ments, 1990

Table 4.. Paid lunch time: Percent of full-time employees by
minutes of paid lunch time per day, small establishments,
1990

Protes-
“ Bonet | Clerical | Produc.
atvem- | oan’ | and. |tion and
Work schedule ployees and sales | service
related | Ploy: | employ-
rae, ees. | oes
ees

3
8

100 100 100

Under 35
35
Over
975
over 37.5 and under 40

Over 40 and under 50
‘50 and over
Hours per week not available .

BSoox

Sroteaanan
2

SoaBuoran

3
3

Non-fixed work hours

Hours per day:
Under 6

over 6.and under 7:

oir 7 and under 8

~ Over 10
Hours per day not available ..

3

2 B23 y we Ida a>
3
3

Non‘fixed work days ..

*” Work schedule data include regularly scheduled overtime, paid lunch,

and paid rest periods,
? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-

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

Profes-
sional, | Clerical | Produc-
techni | and | tion and
All em | cal, and| sales | service

Minutes per dey Bloyees | 2) ane sae employ

employ-| ees
ees

Total... 100 | 100 | 100

Provided paid lunch time 8 7 7 8

Under 30 minutes 1 ° iv) 1

80 minutes 5 3 3 6

Over 30 minu 2 3 4 1
Number of minutes not

available 0) 0) - 1

92 93 93 92

Not provided paid lunch time ..

" Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Contents—Continued

. Overall limitations—sum of deductible and out-of-pocket expense limits
. Overall limitations—maximum benefit provisions .,............45
. Hospital room and board coverage by type of benefit payments

. In-hospital surgical coverage-by comparison with outpatient surgical coverage
. Second surgical opinion provisions ..........+.. ee eeeenenaeen
. Mental health benefits by extent of benefits
. Substance abuse treatment benefits ...............
. Alcohol abuse treatment benefits by extent of benefits

. Selected cost containment features ...
. Coverage for selected special benefits .
. Contributory plans by type and amount of employee contribution

. Average monthly contribution for employee and family coverage ..

. Dental benefits by extent of coverage for selected procedures

. Orthodontic benefits by lifetime maximum amount of coverage .
. Dental preauthorization requirements .......- see eenceanes

. Flat dollar formulas by amount of basic insurance
. Age-related reductions for active older workers ..
|. Effect of retirement on basic coverage ..........
. Accidental death and dismemberment benefits ...
. Supplemental life insurance coverage .....

. Length-of-service requirements for participation

. Retirement and capital accumulation plans coverage
. Combinations of defined benefit and defined contribution plans

. Method of determining retirement payments
. Summary data on benefit formulas
. Minimum age and associated service requirements for normal

Summary data on plan provisions

. Type of defined contribution plans

Overall limitations—out-of-pocket expense limits

In-hospital surgical coverage by type of benefit payments ........

Drug abuse treatment benefits by extent of benefits .

Contributory status by type of funding arrangement. ...........

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

. Employer-financed coverage after retirement .......+-.seeseeersereneneen eens

Dental care:

Dental benefits by deductible provision ...
Dental benefits by yearly maximum amount of insurance ....

Life insurance:

. Method of determining amount of basic life insurance and

frequency of related coverages 6... . 6s eee e cece eee e eset eee n eens beeen ene nee eeeee
Multiple-of-earnings formulas by amount of basic insurance and
maximum coverage provisions ........sseeeeee eee e eee tee een enes

Dependent life insurance coverage ...

Retirement and capital accumulation plans:

Defined benefit pension plans:

retirement

Defined contribution plans:



Table 63, Life insurance: Percent of full-time participants
by method of determining amount of basic life Insurance
and frequency of related coverages, smail establishments,

1990
Profes-
sional, | Clerical | Produc-
techni | and | tion and
Item eiceat, | cal, and] sates | service
ip related | partici- | partici.
|} partici- | ‘pants | pants
pants
Total .. 100 100 100 100
Basic life insurance’ 99 99 99 | 99
Based on earnings az | 48 | 45 | 26
Mulltiple® 34 | 46 | 43 | 22
Graduated schedule 3 2 2 3
Flat amount 62 | 51 54 74
Flat amount based on service iv) - r0) ie)
Accidental death and dismember- :
ment coverage ... 78 79 7 79
Survivor income benefit’ 1 2 1 1
Supplemental benefits available .....] 27 28 36 a1
Wholly employee pald 25 | 24 32 | 20
Dependent coverage available... 2a | 22 | 22 | 28
Wholly employee paid... 13 18 18 "1

* A few participants received only accidental death and dismemberment

insurance or survivor income benefits.

? inchides participants in plans in which insurance equaled a multiple of

earnings, plus or minus a specific amount.

* Less than 0.5 percent.

* Consists of monthly income, usually a percent of earnings, for the
spouse or dependent children for a specified period after death of em-

ployee.

NOTE: Because of rounding, sums of individual items may not equal to-

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



months(generally not more than 6 months). placed upon.coverage. In most of these cases, benefitswere

Plans that included coverage for disabilities duetomen- provided for a specified period (usually 24 months) and
tal illness covered about half of long-term disability plan _then ceased unless the participant was institutionalized at
participants. However, the majority of these had limits _ the end of the limiting period.

19



Table 1. Summary: Percent of full-time employees participating’ in selected employee benefit programs, small establish-

ments,’ 1990
Profes- Profes-
sional, | Gjerica Produc} sional, Produc-
: techni | Hera)” tion techni- | MERC" tion
<->. Employee benefit program povecs ait. scales ab Employee benefit program poses an. sales s ane
“ lated ves. lemploy- fated |°P OY" lemploy-
lemploy- ees employ. ees
ees ees
Paid: Dental insurance—continued
Holidays 84 | 95 | 91! 75 || Family coverage:
Vacations ss | 94] 93 83 Wholly employer financed a]ow] i).
Personal leave a} ow) i] 7 Partly employer financed 19] 27} 23] 43
Lunch period e| 7) 7] 8
Rest time .. 48. {42 | 46} 51 |ltite insurance e4| 79} 7 | 55
Funeral leave 47 | 57 | 54 | 38 Wholly employer financed s3 | 69] 60 | 43
Jury duty leave 84} 72] 62 | 43 Partly employer financed n}om} tw] 1
Miltary leave a | 29) 2] 15
Sick leave . 47 | 70 | 61 | 29 |/All retirement? 42) 49) 47} 97
Maternity leave . 2] 3| 3] 4
Paternity leave © | © | © 4 © [foetined benetit pension 20 | 20] 23) 18
Wholly employer financed 19 | 18 | 21] 18
Unpaid: Partly employer financed 1 2 1 1
Matemity leave .. 17 | 2] 2) 12
Paternity leave ~ a} 13} 8] 5 [[Detined contribution? a1} 40} 36] 24
Uses of funds:

Sickness and accident insurance .. 26) 25) 24 | 27 Retirement® 2a | 36) 32] 21
Wholly employer financed 7{ wa] 16) 419 Wholly employer finance 1%] 19] 17] 15
Partly employer financed 9 | 10] 10 9 Partly employer financed "1 7} 16 6

Capital accumulation® 4 5 4 2

Long-term disability insurance 19 | 36 | 25 9 Wholly employer financed’ 1 2 2 1
Wholly employer financed .. 16; 30) 21 8 Partly employer financed 2 3 3 2
Partly employer financed 3 5 4 2 || Types of plans:

Savings and thrift. wo} 1) 15 5

Medical care 69} 62} 75 | 60 Deferred profit sharing 1%) 617/ wi] 43

Employee coverage: Employee stock ownership 1 1 11 0
‘Wholly employer financed .. 40} 46) 40} 937 Money purchase pension .. 6 9 6
Partly employer financed 29] 36 | 35 | 23 Stock bonus (y) -| 0 -
Family coverage: Simplified employee pension 1 11 6
Wholly employer financed .. 22} 23 | 22/| 22
Partly employer financed 46 59 53 38. |/Stock option } - QO 0)
Dental care ... 30 | 38 | 35 | 24 |istock purchase Oo] © o) “
Employee coverage:
Wholly employer financed .. 17 |. 19 | 19 | 15 .||Cash only profit-sharing O) -7; 0 -
Partly employer financed 2) | 16 8
Flexible benefits plans . 1 3 2 1
Reimbursement accounts 8/13 9 4

* Participants are workers covered by a paid time off, insurance, re-
tirement, or capital accumulation 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. Benefits for which the employee must pay the
full premium are outside the scope of the survey. Only current employ-
ees are counted as participants; retirees are excluded.

2 See appendix A for scope of study.

* Includes defined benefit pension plans and defined contribution re-
tirement plans. The total is less than the sum of the individual items be-
cause many employees participated in both types of plans.

* Less than 0.5 percent,

® The total is less than the sum of the individual items because some
employees participated in both retirement and capital accumulation

plans, and in more than one type of plan,

* Plans were counted as retirement plans if employer contributions
had to remain in the participant's account until retirement age, death,
disability, separation from service, age 59 1/2, or hardship.

7 Employees participating in two or more plans were counted as par-
ticipants in wholly employer-financed plans only if all plans were noncon-
tributory.

* Includes plans in which employer contributions may be withdrawn
from participant's account prior to retirement age, death, disability, sepa-
ration from service, age 59 1/2, or hardship,

NOTE: Because of rounding, sums of individual items may not equal
totals. Where applicable, dash indicates no employees in this category.
In a few instances, the figures differ slightly from those published in the
June 10, 1991 news release, USDL 91-260.



Table 26. Sickness and accident insurance: Percent of full-time participants by type and duration of payments, small

establishments, 1990

Maximum weeks of coverage

‘Type of payment Total | ose than Varies by
13 13 14-25 26 27-54 52 Over 52 | Mice
All participants
All types .. 100 2 16 3 73 1 3 1 1
Fixed percent of ear 68 1 8 2 52 ¢) 1 1 1
Less than 5 () - - - ) 0) - - -
50 31 Q 1 1 29 - () = 1)
60 14 19) 6 Y 4 “) 1 19) -
66 QO - - - 1) - - - 5
67 18 1 1 0) 15 - - iv) Q
70 2 - 1 - 1 - - (0) (0)
75 1 - rv) Q 0) od 0) “ -
80 0) - - 9) - - - . -
Other percent 3 - - 1 2 - - - )
Percent of earnings varies 2 ) ) - 1 0) - - 0)
By service 1 ~ iv) - 1 0 - - O
By length of disability V) v) - - (0) - - - -
By both service and length of
disability ... 0) - Y 7 0) - - - Y
Fixed weekly dollar benefit. 30 1 7 1 19 0) 2 - -
‘Less than $60 2 - 1 - 1 - - -
3 - 2 0) 1 - 1 -
1 - V) - iv) - - - -
9 ~ 2 9) 7 = 19) - -
3 9) 1 9] 2 Q - - -
5 0 1 0) 4 0 - - -
3 - - - 2 0 () - -
1 - - - 1 - 0 - -
1 - - ) 1 - - - -
$220 or more . 2 1 1 - 1 - “0 - -
Weekty dollar benefit varies 2 - 0) - 1 - 0) 0) -
By eamings 1 - () - 1 - i) ~ -
By service or length of disability] (’) - - - - - 1) 0 -
Professional, technical, and
J
All types .. 100 3 13 9 70 1 3 1 1
Fixed percent of earnings 83 1 1 9 58 (0) 2 1 1
50 38 1 (0) 2 36 ~ iy) - -
60 13 - 7 v) 4 ) 2 - -
66 Y - - - 1) - - = -
67 19 1 2 1 14 - - 0 1
70 4 - 2 - 2 - - 1 -
75 0) - - i) - - - - -
80 °) - 0 - - - - -
Other percent 8 - - 5 3 - - - -
Percent of earnings varies .. 2 1 0 - ) - - Q
By sevice .. 1 - 0 - 0} - - - 0
By length of disability 1 1 - - 0) - - - -
By both service and length of
disability 0) - iv) - iv) - - - -

See footnotes at end of table.

24



Sample design

The sample design for the Employment Cost Index and
this survey is a 2-stage probability sample of detailed occu-
pations. The first stage of sample selection is a probability
sample of establishments, while the second stage of sample
selection is a probability sample of occupation within the
sampled establishments. .

“Establishment sample

The sample of 3,567 establishments was the subset of the
ECI sample that had fewer than 100 employees at the time
of sample selection. The ECI sample is updated periodical-
ly over a 4-year cycle. Each year, new sample establish-
ments are introduced into the survey in selected industries
and replace the sample units that were previously selected
in those same industries. Using this procedure, the entire
sample is replaced approximately every 4 years.

- Thesample of establishments is selected by first stratify-
ing the sampling frame by industry group, and implicitly,

by region (State) and establishment employment. The in- _

dustry groups usually consist of 3-digit Standard Indus-
trial Classification groups, as defined by the Office of
Management and Budget, which are covered by the sur-
vey.

The number of sample establishments allocated to each
stratum (defined by industry) was approximately propor-
tional to the total employment of all sampling frame estab-
lishments in the stratum. Thus, a stratum that contained 1
percent of the total‘employment within the scope of the
survey received approximately 1 percent of the total sam-
ple establishments. Some industries are sampled at a high-
er rate than other industries because of publication re-
quirements or highly variable data.

Each sampled establishment was selected within an in-
dustry group with a probability proportional to its em-
ployment. For example, consider two establishments: A
and B, with respective employment of 5,000 and 1,000. Es-
tablishment A is five times more likely to be selected than
establishment B.

Occupational sample

At the beginning of each field visit by a Bureau field
economist to collect data from 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 varies from 4 in the smallest estab-
lishments to 8 in the largest establishments. The probabili-
ty of an occupation being selected is proportionate to its
employment within the establishment. There were 6,437
second stage sample units (sampled occupations) that re-
ported: data from the 2,017 first stage sample units
(sampled establishments) that cooperated in the survey.

The narrowly defined occupations are based on. the
Standard Occupational Classification (SOC) system de-

93

fined by the Department of Commerce. These narrowly
defined occupations are then classified into the three occu-
pational groups shown in this bulletin.

Data collection

Data for the survey were collected by visits of Bureau
field economists to the sampled establishments. To reduce
the reporting burden, respondents were asked to provide
documents describing their flexible benefits plans, reim-
bursement accounts, retirement and capital accumulation
plans, medical, dental, and vision care plans, and insur-
ance plans. These were analyzed by BLS staff in Washing-
ton to obtain the required data on plan provisions. Data on
paid leave generally were obtained directly from the em-
ployer at the time of the visit.

Data were collected during the period of November
1989 to October 1990, reflecting an average reference peri-
od of April 1990. Respondents were asked for information.
as of the time of the data collection visit.

Data calculation

The tables presented in this bulletin show the percent of
employees who were covered by paid leave plans or unpaid
parental leave plans; participated in medical, dental, and
vision care plans; participated in insurance, retirement, or
capital accumulation plans; or were eligible for flexible
benefits plans, reimbursement accounts, or other selected
benefits. Except in tables 2, 82, 84, and 87, counts of work-
ers covered by benefit plans included those who had not
met possible minimum length-of-service requirements at
the time of the survey.

Most of the tables in this bulletin show the percent of
workers covered by individual benefit plans or plan provi-
sions. Percentages are calculated in three ways. One tech-
nique, followed in tables 1, 3-5, 7, 9, 13-17, 19-21, 72, 78,
79, 83, and 86, shows the number of covered workers as a
percent of all workers within the scope of the survey; tables
2, 82, 84, and 87 show the number of eligible workers as a
percent of all workers.

A second approach is followed in tables 8, 10, 11, 18, 26,
28, 29, 31-37 52, 56-60, 62, 63, 66, 67, 71, 73-77, 80, and 81.
These tables show the number of workers covered by spe-
cific features in a benefit area as a percent of all employees
who participate in that general benefit area. They answer
questions concerning the typical coverage provided to per-
sons with a given medical, dental, and vision care, insur-
ance, defined benefit pension, or defined contribution
plan; for example, what percent of all employees with med-
ical care receive mental health care coverage?

The third approach provides a close look at an impor-
tant plan feature (tables 27, 30, 38-51, 53, 54, 61, 64, 65,
and 68-70), for example, what percent of all employees
with accidental death and dismemberment benefits have
coverage equal to their life insurance benefits? Tables 25
and 85 use a combined approach, indicating in the first
row of data the percent of persons who have a particular



Table 84. Other benefits: Percent of full-time employees
eligible for specified benefits, small independent

businesses, 1990

Profes-

Produc-
a sional, Ctret| ton
em ‘and | an
Employee benefit ployees| Ca. | sales | service
fated {eMPloy-|employ-
lemploy- ees: ees
ees
Income continuation plan
Severance pay 16 29 21 10
‘Supplemental unemployment
benefits ..., ) () Y) Y
Transportation benefits:
Free or subsidized
employee parking . 87 | 97 | 86] e8
Subsidized commuting 1 nb) 1
Job-related travel
accident insurance 10 18 W 6
Gifts and cash bonuses:
Gitts a) 6| 68] 9
Nonproduction bonuses 48 43 51 47
Financial and legal service:
Financial counseling .. 2 6 1 1
Prepaid legal services 2) 3] 3) 4
Family benefits:
Employer assistance for child
care 1 1 1 1
Employer financis
assistance for adoption uy ro) a) Oy
Eldercare. 2; 7] o4af4
Long-term care insurance 1/0 1 1
Health promotion programs:
In-house infirmary 4} tw] 3] 2
Wellness programs 4 7 4 3
Employee assistance programs .. 8 15 7 7
Miscellaneous benefits:
Employee discounts .. 38 | 29] 45 | 37
Employer-subsidized
recreation facilities . 4| 0] 3] 3
Subsidized meals. 3 3 1 4
Sabbatical leave =} =] -] -
Relocation allowance 7| wl] 8; 3
Education assistanc:
Job related 29 44 33 22
Not job related .. 3 7 3 1

* Less than ‘0.5 percent.

NOTE: Where applicable, dash indicates no employees in this cate-

gory.

86



> “Table 2. Other benefit

Percent of full-time employees

eligible for specified benefits, small establishments, 1990

Profes-
ere circa ee
aitem-) cal, | 270 | ang
Employes benefit ployees| and re- Fanatl service
tated /OME SY lemploy-
lemploy- ees
ees
Income continuation plans:
‘Severance pay 19] 30) 26 | 12
‘Supplemental unemployment
benefits 0) “) i)
‘Transportation benefits:
Free or subsidized
‘employee parking as | e4 | a5 | ea
‘Subsidized commuti 1 17 0 1
Job-related travel
accident insurance . 18} 24 | 19 9
Gifts and cash bonuse:
Gifts .. 10 a} 1 9
Nonproduction bonuses 45 42 47 44
Financial and legal services:
Financial counseling 2 5 2 1
Prepaid legal servic 2 2 3 1
Family benefits:
Employer assistance for child
care .. 1 2 2 1
Employer financial
assistance for adoption . 1 2 270
Eldercare 2 5 1 1
Long-term cat 1/0 1 1
Heaith promotion programs:
In-house infirmary 5] 1 4 2
Wellness programs 6| 10 8 4
Employee assistance programs 4158] 2) aw] oa
Miscellaneous benefits:
Employes discounts 33) s2| 46] 96
Employer-subsidized
recreation facilities . 6} 12 6 4
Subsidized meals 5 7 4 4
Sabbatical leave - - - -
Relocation allowance 2) 2] 6] 6
Education assistanc
Job related 35; 50] 41 | a7
Not job related .. 4 8 5 3

* Less than 0.6 percent.

NOTE: Where applicable, dash indicates no employees in this cate-

gory.



Appendix A: Technical Note

; Scope of survey

This survey of the incidence and characteristics of em-
ployee benefit plans is collected jointly with the Bureau’s
Employment Cost Index (ci). The portion of the sample
from which these estimates are made covers all private sec-
tor establishments in the United States employing fewer
than 100 workers at the time of sample selection’. All pri-
vate sector industries are covered in the survey with the
exception of farms and private households. All employees
‘are covered except the self-employed.

The industrial coverage, establishment size coverage,
and geographic coverage for this survey differs from the
earlier surveys conducted annually from 1979 to 1989,
The private sector surveys conducted from 1979 to 1986
excluded most of the service industries and included estab-
lishments that employed at least 50, 100, or 250 workers,
depending on the industry. The survey conducted in 1987
consisted of State and local governments with 50 or more
employees. The surveys conducted in 1988 ‘and 1989 in-
‘cluded all private sector establishments that employed 100
or more employees. All surveys conducted from 1979 to

* 1989 excluded establishments in Alaska and Hawaii.

Tables A-1 and A-2 show the estimated:number of es-
tablishments and full- and part-time employees within the
scope of the survey, the number of responding sample es-
tablishments, and the number of sampled (and respond-
ing) occupational quotes? within those establishments that
were actually studied for each major industry division.

Occupational groups

Data were collected individually for narrowly defined
occupations that were sampled. within establishments.
Each of these narrowly defined occupations is classified
into one of the following three broad occupational groups:

Professional, technical, and related. Includes professional,
technical, executive, administrative, managerial, and re-
* lated occupations.

1 The establishments included in this survey had to be determined in
advance of the actual collection since only the smaller establishments
were surveyed. The decision was made to classify establishments by size

as of the reference date of the sampling frame. All establishments that
were sampled with fewer than 100 employees are included in the survey,
even if they employed more workers at the time of data collection.

2 All of the employees in the detailed occupation selected may not be

> surveyed. Data for a manageable number (group) of employees in thede-
tailed occupation that included the employee position selected are col-
lected. This group is called a quote.

Clerical and sales. Includes clerical, administrative sup-
port, and sales occupations.

Production and service. Includes precision production,
craft, and repair occupations; machine operators and in-
spectors;. transportation and moving occupations; han-
dlers, equipment cleaners, helpers, and laborers; and ser-
vice occupations.

Employees excluded from the survey are the self-em-
ployed, proprietors, major stockholders, members of a
corporate board who are not otherwise officers of the cor-
poration, volunteers, unpaid workers, family members
paid token wages, persons permanently disabled, partners
in unincorporated firms, and U.S. citizens working over-
seas.

Benefit areas

Sampled establishments were requested to provide data
for a sample of their occupations on work schedules and
details of plans in each of the following benefit areas: Paid
lunch periods, paid rest periods, paid holidays, paid vaca-
tions, paid personal leave, paid funeral leave, paid military
leave, paid jury-duty leave, paid and unpaid parental
leave, paid sick leave, sickness and accident insurance,
long-term disability insurance, medical, dental, and vision
care, life insurance, retirement and capital accumulation
plans, flexible benefit plans, and reimbursement accounts.

Data were also collected on the incidence of the follow-
ing additional benefits: Severance pay, supplemental un-
employment benefits, parking, subsidized commuting,
travel accident insurance, nonproduction cash bonuses, fi-
nancial counseling, prepaid legal services, gifts, child care,
adoption assistance, eldercare, in-house infirmaries, long-
term care insurance, wellness programs, recreation facili-
ties, subsidized meals, employee discounts, relocation al-
lowances, job-related and non-job-related educational
assistance, employee assistance programs, and sabbatical
leave.

Sampling frame

The list of establishments from which the sample was
selected (called the sampling frame) was the State Unem-
ployment Insurance (U!) reports for the 50 States and the
District of Columbia. The reference date of the UI reports
that were sampled varies by industry from 1983 to 1988.
This is due to the nature of the sample selection and re-
placement, which is described below.



Table A2, Number of establishments and part-time occupational quotes Studied and estimated.number of part-time workers
within scope of survey, smail establishments, United States, 1990

Number of occupational quotes studied?

1 Number of establish-
Industry division ments studied Professional, techni- Production and

Total cal andvolated | Cleticat and sales ob
Ail industries ... 2.016 863 105 398 360
Manufacturing 208 36 4 9 23
Nonmanutacturing 1,808 827 101 389 337
Mining 26 7 1 5 1
Construction 191 7 - 10 7
Transportation, communications,
electric, gas, and sanitary services 142 33 3 12 8
Wholesale trade .. 308 a 3 37 3t
Retail trade .. 417 335 3 183 149
Finance, insurance, and real estate 233 40 3 26 "1
Services .... eee| 491 324 88 116 120

Estimated number of part-time workers within scope of survey

All industries... 8,212,775 697,474 3,996,718 4,118,583
Manutacturing 271,462 61,036 83,981 126,445
Nonmanufacturing 7,941,813 636,438 3,312,737 3,992,198

Mining 58,010 15,241 40,635 2,134
Construction .. 46,198 - 27,504 18,694
‘Transportation, communi ;

electric, gas, and sanitary services 303,135 15,298 64,010 228,826

Wholesale trade 265,995 5,037 152,693 108,265,
Retail trade 4,730,354 17,587 4,952,781 2,759,986
Finance, insurance, and real estate | 308,452 6,160 221,027 81,265
Services . 2,229,170 577,115 854,087 797,968
As defined in the 1972 edition of the Standard industfial Classitica- they provided data for all items studied. See the section on survey re-

tion Manual, U.S. Office of Management and Budget, Industry data are “sponse.

shown for informational purposes only and are subject to larger than nor-

mal sample error, See section on reliability of estimates, NOTE: Because of rounding, sums of individual items may not equal
® ‘These figures refer to all respondents to the survey, whether or not totals.

97



Table 59. Dental.care benefits: Percent of full-time 7
Participants by deductible provision’, small establishments,
1990 .

Table 60.. Dental care benefits: Percent of full-time
Participants by yearly maximum amount of coverage,’ small
establishments, 1990

Profes- Profes-
sional, | Clerical | Produc- sional, | Cletical | Produc-
‘al par. | techn: | “and tion ang Atpar.| techni: | “and |tion and
Type of deductible tapeats| cal and) sales | service Dollar amount? teipoats| C2 and] sales | service
icipants| related | partici- | partici- 'PAN'S| ‘elated | partici- | partici.
partici | pants | pants partici- | pants | pants
pants pants
Total 100 | 100 | 100 | 100 Total 1o0 | 100 | too |. 100
Subject to separate dental Yearly maximum specified? 84 | 66 | 84] 83
deductible® e | 6 | 72 | 64 Less than $500 .. 1 1 1 1
$500 . 2/0 2 2
Yearly deductible only .. ez | 60 | 67 | 60 3501-8749 0) 6 0 CO)
$25 19 | te | 22 | 1 $750... 8 8 ry 8
iY) oO } - $751-$999 2 1 1 3
ao | 37 | 40 | 30 $1,000 4a | s2 | so | 44
1 2 1) $1,001-$1,499 4 7 5 2
3 2 4 3 $1,600 " 2) w | 14
Over $100 6 1 1) 0 $1,501-81,999 2 1 1 2
$2,000 4 3 3 6
Lifetime deductible only 1} 0) 1 $2,001-$2,009 1 1) 0 1
. +1 1 $3,000 or more 2) 4 3 3
Over $50 0 ~ o -
No yearly maximum 16 | 14 | 16 | 47
Both yearly and lifetime
deductibles 4 6 8 3 * Includes all covered dental procedures except orthodontia, Amount
; of maximum specified is for each insured person.
Subject to overall plan deductible...) 3 5 3 3 ? Coverage for dental procedures may also be subject to scheduled al-
No deductible oo | 2 | 25 | ae lowance, deduetba, or ecinsurance provisions in ado to maximum do

' Excludes separate deductibles for orthodontic procedures.

? Amount of deductible described is for each insured person. In some
plans, the individual and family deductibles are identical.

+ Deductibles may not apply to all covered dental procedures. If sepa-
rate deductibles applied to different procedures, the sum of the deductible
amounts was tabulated.

« Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

° separate yearly maximums applied to different procedures, the sum
of the maximums was tabulated. Maximums applied to dental expenses
only.

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 64. Life insurance: Percent of full-time participants in plans with multiple-of-earnings formulas’ by amount of basic
insurance and maximum coverage provisions, small establishments, 1990—Continued

In plans In plans with maximum coverage
without
Forma Total | maximum | ,y | Less than | $50,000- | $100,000- | $250,000. | $500,000- | $1,000,000
coverage $50,000 $99,999 $249,999 | $499,999 | $999,999 or more
Production and service
Total 100 40 60 4 7 18 15 5 1
Life insurance is equal to annual
earnings times:
Less than 1.0 ... 2 - 2 - 2 - 1 - -
63 28 35 3 12 9 un i) 1
r 0 - - - - - -
8 2 6 is) 2 iv) 0 3 0
18 5 12 - 1 7 3 1 0
2 2 - - - - - 2
3 is) 2 - iv) 2 (9) - -
3 1 2 1 - Q - 1
i 1 a) - - 0 - :
) - 0 - - - ) : 2

Includes participants in plans in which insurance equaled a multiple
of earings, plus or minus a specific amount. In such cases, only the
‘multiple of earnings was included in the tabulation.

? When the multiple-of-earnings formula varied with age, the maximum
multiple was tabulated. A few plans varied the multiple-of-earnings for-
mula according to service; in these cases, a participant was assumed to

have 15 years of service.
+ 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 65. Life insurance: Percent of full-time participants in
plans with flat dollar insurance’ by amount of basic
Insurance, small establishments, 1990

Protes-
sional, | Clerical | Produc-
All par-| techn | and | tion and
Amount of insurance ticipants| C2" and| sales | service
Pants | related | partici- | partici-
partic | pants | pants
pants
Total 100 | t00 | 100 | 100
‘Less than $2,000 13) - 1 13)
$2,000-$4,999 4 3 2 6
'$5,000-$9,999 16 9 18 7
$10,000-$14,999 ., 50 42 50 52
$15,000-$19,999 .. 13 15 10 14
$20,000-$24,999 .. 7 8 7 7
$25,000-$29,999 .. 5 6 6 4
$30,000-$49,999 .. 1 3 2 a
$50,000-$99,999 .. 3 7 3 1
$100,000 and over 2 6 1 )

* Excludes participants in plans where insurance was a flat amount

based on service.
® Less than 0.6 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 7, Paid holidays: Percent of full-time employees by
number. of paid holidays provided each year, small
establishments, 1990

Table 8, Paid holidays: Percent of full-time participants by
policy on holidays that fall on a regularly scheduled day off,

‘small. establishments, 1990

Profes-| Profes-
sional, | Clerical | Produe- sional, | Clerical | Produc-
techni- | ~ and techni | and | tion and
Number of days a em |cal and| sales | -2"4 Holiday policy a par | cal and| sales | service
ployees) related |employ- Smiley. Pp related | partici- | partici-
Jemploy-| ees |°TMPOY partici- | pants | pants
ees Pants
Total 100 | 100 | 100 | 100 Total. 100 | 100 | 100 | 100
Provided paid holidays .. 84 95 ca) 75 Holiday is not observed ... 7 2 8 7
1 day 1 () 1 2
4.1119 days oO; OloOl oe Another day off granted ... 7} 86 | 7 | 7
2 days. 1 1 1
3 days - 1 2} ef. 4 Additional day’s pay in lieu of
3.1-3.9 days 0 -F ole holiday 4 1 3 6
4 days .. 2 1 2 2
S days... 3} $8]. 6 Another day off or day’s pay,
51-59 days ola) ole depending on when holiday falls.) 7 4 8 8
6 days 7 | 92) 417} 19
6.1 - 6.9 days 17, oO) 0 1 Another day off or holiday not
7 days . 1} 15} in| 40 observed, depending on when
71279 days 2,04 2} 2 holiday falls 2 2 2 1
8 days, to} 9) 41 9 .
8.1 - 8.9 days 2) 4] 2 1 thar provision applies’ 1 2 1 1
9 days al win 6
9.1'- 9.9 days 1 1 +) 0 Holiday policy not determinable . 2 2 2 3
10 days 7 ; 2 22 13 .
aay days. ©, 1 0, o, ' Includes plans where the policy differs by holiday.
Doge: OF OP) OO, NOTE: Because of rounding, sums of individual items may not equal to-
Bes ololole tals. Where applicable, dash indicates no employees in this category.
13 days 1 2} oe] 4
18.1- 13.9 days - 0 +] 0 | 0
14 days ..... 1 1 1 0)
More than 14 days... 1 2 11 0
Number of days not availat le () ) 10) iv)
Not provided paid holidays wl] 5) 9] 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.



coverage, while the remainder of the table is based on all
employees with that coverage.

This multilevel approach has the advantage of clearly
pointing out typical benefit plan characteristics after the
incidence of the benefit has been established. Any of the
second or third types of tables, if desired, can be converted
to the first type by multiplying each data cell by appropri-
ate factors. For example, to-calculate the percent of all em-
ployees in plans specifying a maximum payment for orth-
odontia, multiply the percent of those with orthodontia
coverage subject to a maximum (78 percent from table 61)
by the percent of dental care participants with orthodontia
coverage (63 percent from table 58), and multiply that
product by the percent of all employees. who have dental
care coverage (30 percent from table 1). In this example,
15.percent of employees are in plans that impose a maxi-
mum on orthodontia payments (.78 X .63 X .30).

Tables 6, 12, 22-24, and 55 differ from other tables be-
cause they display average benefit values rather than per-
centages of workers. These tables present the averages for
all covered employees; calculations exclude workers with-
out the benefit.

Survey response

The following summary is a composite picture of the es-
tablishment responses to the survey:

Number of establishments:

3567
752
798

2017

There are three procedures used to adjust for missing
data from partial schedules and total refusals. First, impu-
tations for the number of plan participants are made for
cases where this number was not reported (approximately
1 percent of participants in health and retirement and cap-
ital accumulation plans and less than 1 percent of partici-
pants in all other types of plans.) Each of these participant
values is imputed by randomly selecting a similar plan
from another establishment in a similar industry and
establishment size. The participant rate from this random-
ly 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 are made where
they are not available in a partially responding establish-
ment. These plan provisions are imputed by randomly se-
lecting a similar plan from another establishment in a simi-
Jar industry and establishment size. The plan provisions
from this randomly selected plan are then used to repre-
sent the plan that is missing plan provision data. (This was
done for about 7 percent of participants in sickness and ac-
cident insurance plans, 16 percent of flexible benefits plan
participants, 44 percent of medical, dental, and vision care
participants, 37 percent of long-term disability insurance

94

participants, 66 percent of retirement and capital accumu-
lation plan participants, and 24 percent of life insurance
plan participants. Imputations were done for less than 1
percent of the participants in paid leave plans.) Because of
the high plan provision imputation rate for some benefits,
publication of detailed provision estimates was limited.

For other forms of missing data (totally unusable estab-
lishments and refusals), a weight adjustment is made using
the sample unit employment. This technique assumes that
the mean value of the nonrespondents is equal to the mean
value of the respondents at some detailed “cell” level.
These cells are defined in a manner that groups establish-
ments 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.

One other form of missing data occurs when an estab-
lishment cooperates in the survey but refuses all informa-
tion concerning one or more of the selected occupations.
No adjustment was made for these missing data for this
survey; however, methods to impute for these data will be
explored for future surveys. If all sampled occupations in
cooperating establishments had supplied the- requested
data, the estimates in this bulletin would represent 44.7
million employees instead of the 40.7 million employees.
that are represented.

Survey estimation methods

The survey design uses an estimator that assigns the in-
verse 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. Two weight adjustment factors are applied to
the establishment data. The first factor is introduced to ac-
count for the establishment nonresponse and a second
post-stratification factor is introduced to adjust the esti-
mated employment totals to actual counts of the employ-
ment by industry for the survey reference date. These ac-
tual employment figures are obtained from the State
Unemployment Insurance reports for March 1990.

The general form of the estimator for a population total
Y is:

n’ £2; f1; oH
v= 3 y
i=1 Pi j=l
where: ~
n’ = number of responding sample establishments;
0; = occupation sample size selected from the i** es-
tablishment;
Yjj = value for the characteristics of the. jt selected oc-

cupation in the i'” selected establishment;
Pj = the probability of including the j' occupation in
the sample of occupations from the it” establish-
ment;
weight adjustment factor for nonresponse for
the i" establishment;

fly =



Table 18. Unpaid parental leave’:
full-time employees by maximum duration of benefits, small

establishments, 1990

Percent of

eligible

Profes-
sional, | Clerical | Produc-
All eligi-| techni- | and | tion and
Duration ble em-/ cal, and| sales | service
ployees | related | employ- | employ-
employ-; ees ees
ees
Unpaid maternity teave
Total .. joo | 100 | 100 | 100
Under 1 month 4 5 5 4
1 month i) 1 - -
Overt but under 2 months .. 48 45 45 54
2 months .. 0 iy) 1) 1
Over 2 but under 3 months .. 9 9 7 12
3 months 1 10 12 9
Over 3 and under 4 months 1 1 ® 1
4 months Q 1 (a) 1
‘Over 4 but under § months .. 10 4 14 5
Over 5 but under 6 months .. a) o) ) -
6 months 9 10 12 4
Over 6 months 7 7 4 10
Unpaid paternity leave
Total .. 100 | 100 | 100 | 100
Under 1 month 10 4 12 7
Over 1 but under 2 months . 52 55 37 66
Over 2 but under 3 months .. 8 5 10 7
3 months .. 8 5 13 5
‘Over 4.but under §-months .. "1 10 19 3
6 months .. 7 9 7 4
Over 6 months .. 5 7 1 7

* This table includes plans providing a fixed number of unpaid days off,
regardless of whether paid days off are also provided.

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
‘tals. Where applicable, dash indicates no employees in this category.

16



Table 38.. Medical care benefits: Percent of full-time
deductible,'smail establishments, 1990

participants in plans with overall limitations on benefits by amount of

‘ci Professional, technical, and| Clerical and sales Production and service
All participants related participants participants participants
Deductible Deductible Deductible Deductible
Type-and amount of deductible*
Ex. Ex- Ex. Exe
Total Includes! cides | Total jIncludes| cites | Total jIncludes! ait, | Total |includes| %.,
hospital |e spital hospital spite hospital | ospital hospital | Aosptal
expense expense | expense) expense | expense expense expense} expense
Total 82 18 | 100 82 18 | 100 84 16 | 100 a 19
Deductible specified ... 94 82 12 96 82 13 96 a4 nl 93 81 12
Deductible on an annual basis? .. 94 82 12 95 82 13 95 84 1" 93 81 12
Based on earings* ... is) (0) - 1 1 - (e) iv) - 6 i) -
Flat dollar amount . 94 82 12 94 8t 95 84 1 93 80 2
Less than $50 is) iv) - - - iv) iv) - is) iv) =
$50 2 2); 0 2 2 2 2 1 2 1 )
$51-$99 } is) - iV) () ~ iy) o > 1) Q -
$100 .. 35 34 4 38 34 3 33 29 4 35 932 a
$101-$149 . iv) iv) = ) iv) ~ 1 1 - ey iv) >
$150 7 6 1 8 6 3 7 6 1 6 5 1
$151 iy) iy) - > = - iy) iy) - iy) ty) -
$200 24 19 5 22 7 5 24 20: 4 25 19 6
i) oO - ol i) - - - - > - -
13 12 1 13 14 1 12 12 1 13 12 1
0) 0 - y) v) : 0) iy) : - - -
8 5 1 5 4 7) 6 6 G) 5 4 1
7 7 6 6 6 () 8 8 6 7 7 iv)
Deductible not on an annual basis iv) 0 i) 1 iv) iv) i) () 0 0 -
No deductible ... 6 iv) 5 5 (v) 5 4 6 4 7 6) 7

* The deductible is the amount of covered expenses that an individual
must pay before any charges are paid by the medical care plan. Deduc-
tibles that apply separately to a specific category of expense, such as a
deductible for each hospital admission, were excluded from this tabulation.

* Amount of deductible described is for each insured person. However,
many plans contain a maximum family deductible. In some plans, the indi-
vidual and family deductibles are.identical. If the deductible applied only
to dependents’ coverage, it was not tabulated,

* ‘The basis of the deductible is the length of time-within which a single

45

deductible requirement applies. Some plans require that expenses equal
to the deductible be incurred within a shorter period, such as 90 days,

“ These plans have deductibles that vary by the amount of the partioi-
Pant’s earnings. A typical provision is 1 percent of annual earnings with a
maximum deductible of $150,

5 ‘Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 86. Summary:
establishments,’ 1990

Percent of part-time employees participating’ in selected employee benefit programs, small

Profes- Profes-
Sional, | Gerigal | Produc: sional, | Cjericat [Produc
techni. | Merl” ton techni. | eFC” ton
Allem-j cal, and Altem-| cal, and
Employee benefit program ployees| and re- sales soniee Employee benefit program ployees| and fe- | sates sevice
lated wins lemploy- lated oe. | lemploy-
lemploy- ees employ, ees
ees ees

Paid: Dental care—continued
Holidays .. 28) 35} 37 | 19 |) Family coverage:

Vacations 29} 28 | 34 | 26 Wholly employer financed 1; @ 1 2

Personal leave 4] 13 4 2 Partly employer financed 1 1 1 1

Lunch period .. 51.0 6 6

Rest time 27 5 | 94 | 25 |[tife insurance . 6 5 8 6

Funeral leave 1 7) 17 5 Wholly employer financed .. 6 5 7 5

Jury duty leave 13 7] 17) 10 Partly employer financed 11 @ 1 1

Military leave .. 3 1 5 3

Sick leave sun. io} 36] 11 5 |All retirement. 40 7) 45 7

Maternity leave 1 0) 1

Paternity leave - - - ~ [Defined benefit pension 4 1 5 4
‘Wholly employer financed . 4 1 5 3

Unpaid: Partly employer financed ) -|; 0 rv)
Maternity leave 4 1 5 4
Paternity leave 2 1 4 1. |]Defined contribution’ 7 6| 12 4

Uses of funds:

Sickness and accident insurance 10 27 cc] 8 Retirement® . 7 6 1 4
Wholly employer financed 4} 16 2 4 Wholly employer financed’ . 5 5 8 3
Partly employer financed 6] 4 8 4 Partly employer financed . 2 1 3 1

Capital accumulation? 1) 0 1/ @

Long-term disabitity insurance ia) 2 1] @ Wholly employer financed’ iy) ~ 1] 0
Wholly employer financed eo 2} 9 | ® Partly employer financed . i) °) o) eo
Partly employer financed iv) - iv) iv Types of plans:

Savings and thrift 1 1 2 1

Medical care .. 6 6 7 6 Deferred profit sharing . 5 5 8 3

Employee coverage: Employee stock ownership ) - 1 -
‘Wholly employer financed 5 3 5 5 Money purchase pension 1 1 21 0
Partly employer financed .. 2 3 2 2 ‘Stock. bonus: e - e) -

Family coverage: Simplified employee pension a) a) -
Wholly employer financed 31 0 3 3
Partly employer financed .. 4 5 4 3 |IStock option . e) - 7) -

Dental care ... 3 1 3 8 ||Stock purchase io) -/ 0 -

Employee coverage:

Wholly employer financed 2 1 2 2 ||Cash only protit-sharing ...... - - - -
Partly employer financed . 1/ 6 1 1
Flexible benefits plans 1 - 1 1
Reimbursement accounts ... 1 e 1 1

* Participants are workers covered by a paid time off, insurance, re-
tirement, or capital accumulation 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. Benefits for which the employee must pay the
full premium are outside the scope of the survey. Only current employ-
ees are counted as participants; retirees are excluded.

® See appendix A for scope of study.

* Less than 0.5 percent.

* Includes defined benefit pension plans and defined contribution re-
tirement plans. The total is less than the sum of the individual items be-
cause many employees participated in both types of plans.

® The total is less than the sum of the individual items because some
employees participated in both retirement and capital accumulation

plans, and in more than one type of plan.
* Plans were counted as retirement plans if employer contributions
had to remain in the participant's account until retirement age, death,
disability, separation from service, age 59 1/2, or hardship.
” Employees participating in two or more plans were counted as par-
ticipants in wholly employer-financed plans only if all plans were noncon-

tributory.

* Includes plans in which employer contributions may be withdrawn
from participant's account prior to retirement age, death, disability, sepa-
ration from service, age 59 1/2, or hardship,

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

In a few instances, the figures differ slightly from those published in the
June. 10, 1991 news release, USDL 91-260.



Table 27.. Sickness and accident insurance: Percent-of full-time participants with benefits based on percent of
earnings formula by maximum weekly benefit, small establishments, 1990—Continued

Maximum weekly benefit
Type of payment Tota! | TH! | Less maxi-
with} jan {8100 to]$120 to|$140 to}$160 to/$200 to] $250 to| $300 to} $350 to|$400 or
maxi- si1g} si39'| $159 | si99 | $249 | s299 | $349 | $99 | more | TMTM
$100
mum
Production and service
Total .. 100 83 1 3 - 2 40 3 23 4 2 6 17
Fixed percent of earnings 97 | 82 1 3} - 2} 40 3 | 22 4 2 6} 45
Less than & 1 - - - - - : ~ - - - 1
50 48 46 - 1 - QO 40 1 - 4 - - 2
60 15 7 1 v) - - - iv) 3 - - 3 8
66 Oo! oe - - : z 2 ol 6 - 3 ‘
67 28 | 25 | - 1 - 1 - 1} 18 1 1 2| 2
70 3 2) - - - - - | 0 17 0 - 1 1
75 1 1 - - - - - +10 . : - 1
80 iv) - - - - - - - - . - | 0
Other percent .. 2 1 - - - 1 - - - - 1 - 1
Percent of earnings varies .... 3 1 - 1 - - - - 0 - - ie) 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 28. Sickness and accident insurance: Percent of
full-time participants by length-of-service requirements for
participation,’ small establishments, 1990

Profes-
‘sional, | Clerical | Produc-
techni- | and | tion and

Length-of-service requirement | All Pat | cai and) sales | service

ticipants) ‘elated | partici- | partici-
partici- | pants | pants
pants
Total . 100 | 100 | 100 | 100
With service requirement .. 7 | 68 | 7 | 7
1 month sa | 44 | 40 } 36
2 months 5 2 3 7
3 months 2 7] 2 | 13
4-5 months . 13 | 1 | 4] 13
6 months .. 3 1 2 3
1 year... 5 1 5 7
Over 1 year 1 1 2] 6
Without service requirement 22 | 33 | at 19
Service requirement not
determinable . 2 1 1 3

* Length of time employees must be on the job before they are cov-
ered by a plan that is at least partially employer financed, There is fre-
quently an administrative time lag between completion of the requirement
and the actual start of participation. If the lag was 1 month or more, it
was included in the service requirement. Minimum age requirements are
rare,

? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

28



Table 9. ‘Paid vacations: Percent of full-time employees by amount of paid vacation provided at selected
periods of service, small establishments, 1990 .

Profes- Profes-
sional, | cierigal [Produc] sional, | Gjerigal|Produc-
techni. | US" ton ‘and | tion
ion pol All em-| cal, an , All em- and
Vacation poticy Ployees| and re-|,°25 | service Vacation policy ployees| and re- |, S228 | service
lated my lemploy- lated |°EOY"| employ.
lemploy-| ees lemploy-| ees
ees ees
Total .. 400 | 100 | 100 | 100 |} At 10 years of
: service:
Provided paid vacations’ 88 94 93 83 Under 5 days ie) i) 19) =
5 days 8 2 6) 12
At 1 year of service: Over 5 and under 10 days| (?) (9) @ e
Under 5 days a] ea a G} 10 days .. | 26} 19 | 2] 27
5 days . 46 | 25 | 42 | 55 Over 10 and under 15
Over 5 and under 10 days | 1 2 i 2 days .. 1 1 1 1
10 days . | 93 | 54] 45] 18 15 days .. 95) 42.| 42 | 28
‘Over 10 and under 15 Over 15 and under 20
1 2 1 1 3 5 2 2
2 6 2 1 we] a} 13 9
2 3 2 1
days 1 1 ia) 1
20 days 1 4 1 1 |] At 15 years of service:
Over 20 days ® o) e ea Under 5 days iv) io) @ -
5 days a) 3 6| 1
At3 years of service: Over 5 and under 10 days | () @ a (9)
Under 5 days ro) (a) a a 10 days | 23 | 18 | 25 | 24
5 days 13 4| io] 19 Over 10 and under 15
Over 5 and under 10 days 1 1 0 1 1 1 1 1
10 days .. 60 | 6 | 69} 54 26 |--31 | a7 | 24
Over 10 and under 15
days 4 9 3 2 2 2 2 2
15 days . 5] 14 6 2 23) 31 | 2 | 16
Over 15 and under 20 Over 20 days 4 8 4 2
1 21 a 1
3 7 3 1 l| At 20 years of service:
iy) e 0) io) Under 5 days i) is) 6 -
5 days 8 3 6] 11
At 5 years of servic Over 5 and under 10 days | () 0 1] @
Under 5 days a }| a ~ 23} ia | 24| 24
5 days | 9 3 7) 13
Over 5 and under 10 days} 1/ 8 i) 1 1 1 1
10 days . 45 | a9 | 48 | 46 22| 26 | 22] 20
Over 10 and under 15
days . 5 8 4 3 1 2 1 1
15 days .. 21} 29 | a7] 14 2; 34 | 92] 18
‘Over 15 and under 20
days .. 2 2 1 2 2 4 1 1
20 days .. 4 10 5 2 4 6 5 4
Over 20 days ® 1 lo ea 1 2 1 ea

12



Table 54. Medical care benefits: Percent of full-time participants by requirement for employee contribution, smail establish:

ments, 1990
Professional, technical, Cletical and sales Production and services
All participants and related participants participants participants
‘Type and amount of contribution
Employee | Family | Employee | Family | Employee |. Family | Employee | Family
coverage | coverage | coverage | coverage | coverage | coverage | coverage | coverage
Health maintenance organizations 100 100 100 100 100 100 400 100
Non-contributory 46 22 35 10 47 28 52 26
Contributory .. 54 7 65 89 53 74 48 73
Not determinable - ro) = i) = - - ra)
Non-health maintenance organizations 100 100 100 100 100 100 100 too
Non-contributory 59 35 60 32 54 30 63 39
Contributory a1 65 40 68 46 69 37 60
Not determinable - 1 - i) - ) - 1

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 55. Medical care benefits: Average monthly
contribution of full-time participants in contributory plans,
small establishments, 1990

Profes-
sional, | Clerical | frodUe,
All partici-| technical, ! and sales | ©” 8
Type of coverage pants | andre- | partici. | Senco
lated par-| pants | Pune
ticipants. Pani
All plans
Employee coverage $25.13 | $29.91 | $24.06 | $27.06
Family coverage 109.94 | 111.73 | 10638 | 110.68
Health maintenance
organizations
Employee coverage 26.47 | 2996 | 27.28 | 25.41
Family coverage’ 13461 | 117.86 | 134.04 | 144.56
Non-health maintenance
organizations
Employee coverage .. 25.04 | 23.90} 2953 | 27.67
Family coverage’ 103.60 | 110.13 | 10226 | 100.82

* 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.

56



Contents—Continued

Page
79. Cash or deferred arrangements (including salary reduction plans) ..............c0eceeceees 719
Plan administration:
80. Type of plan sponsor . 82
81. Type of plan financing .. 83
82. Flexible benefits plans and reimbursement accounts coverage ......6....0sseceeseceseeee 83
Small independent private businesses:
83. Summary: Participation in employee benefit programs 85
84. Summary: Eligibility for other benefits ...............0005 86
Historic data:
85. Summary: Incidence and major benefit provisions, 1979-89 .............cccccececceseeece 87
Part-time employees in small establishments, 1990:
86. Summary: Participation in employee benefit programs 90
87. Summary: Eligibility for other benefits 91
Appendixes:
A. Technical note 92
B. Availability of the survey’s data base 98

ix



Chapter 9. Benefits for part-time employees _

For the first time, information on part-time‘ workers is
included in the Bureau’s 1990 small establishment survey
on the incidence-and details of employee benefits: Paid va-
cations and holidays were the most prevalent benefits
available to part-time workers, while insurance and retire-
ment protection was rare (table 86).

Few part-time workers within’ the scope of the Em-
ployee Benefits Survey were provided medical care, life in-
surance, private-retirement plans, or ‘parental leave. In
contrast, full-time employees in small private establish-

ments were more than 4 times as likely to have retirement
plans and parental leave, and nearly 10 times as likely to be
covered by medical care and life insurance benefits.
Because of the limited incidence of benefits among part-
time workers, plan provisions could not.be examined to
the same extent as for full-time workers. (See chart 4:)

45 Employees are classified:as full-time or part-time in accordance
with the practices of surveyed establishments. Part-time workersare typ-
ically scheduled to work fewer hours per week than full-time workers in
the same work activity. ° ‘

Chart 4. Percent of full-time and part-time employees in smail

establishments, 1990

Full ‘time

Part time

88



Table 32. Long-term disability insurance: Percent of full- ime
Participants by duration of benefits, small establishments,
1990

Table 33. Long-term disability insurance: Percent of
full-time participants by lerigth-of-service requirements for
participation,’ small establishments, 1990

Profes-

sional, | Clerical | Produc-

Alkpar. | techni | and tion and

Duration ticipants | 2! 2nd) sales | service
‘elated | partici- | partici-

Partici- | pants | pants
pants

Profes-
sional, | Clerical | Produc-
, All par- | techni- | and | tion and
Length-of-service requirement |. FPt. cal, and| sales | service
‘pants | related | partici- | partici-

partici- | pants | pants

Total 100 | 100 100

For life .. 7 5 9 5

To retirement age at 23 19 20
Varies by age when disability

occurs’ 67 68 66 66

‘One-time reduction a7 14 21 13

Gradual reduction 50 55 45 53

Varies by type of disability’ 2 2 1 4
Other? W) i) 1 ie)
Provision not determinable .. 3 1 3 4

* The duration of benefits may be reduced gradually according to an
age. schedule or reduced once at a specified age.

* Benefits for disabilities caused by accidents were usually paid for life;
duration for illnesses was limited,

* Includes durations that vary by length of service.

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 34. Long-term disability insurance: Percent of
full-time participants by coverage for mental illness, small
establishments, 1990

pants
Total ..... 100 100 100 100
With. service requirement 54 a7 54 61
1 month 18 14° 19 22
2 months 3 2 3 4
3 months "1 12 13 6
6 months. 12 9 11 16
1 year. .| 6 6 5 7
Over 1 year and under 2 years...) 1 - 1
1 1 1 2
1 1 is) ra)
2 1 3

Without service requirement 39 45 39 31

Service requirement not determin-

able 7 8 7 8

‘Length of time employees must. be on the job before they are cov-
ered by a plan that is at least partially employer financed. There is fre-
quently an administrative time lag between completion of the requirement
and the actual start of participation. If the lag was 1 month or more, it
‘was included in the service. requirement.

? Less than 0.5 percent,

NOTE: Because of rounding, sums of individuat items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 35, Long-term disability insurance: Percent of
full-time participants by provision for survivor benefits, small
establishments, 1990

Profes-

sional, | Clerical | Produc-

techni- and | tion.and
Item doxenta cal, and! sales | service

related | partici- | partici-

partici-') pants’ | pants

pants

Profes-
sional, | Clerical | Produc-
_ Ail par. | techni: | and | tion and
Type of annuity for surviving spouse | 2: PA | cal, and| sales | service
Pan's) elated | partici- | partici-
partici- | pants | pants
pants

100 | 100 | 100 100

With coverage for mental illness .....| 51 54 50. 51
Without limits .. 8 6 8 8
Benefits limited ... 44 47 42°| (43

No coverage for mental illness, 47 44 49. 49

Coverage not determinable 1 2 1 )

Total .. 100 100 | 100 100

With survivor benefits .. 48 46 45 55

Lump sum payment .. 34 34 30 a

Percent of monthly benefit’... 14 12 15 14
No survivor benefits 51 53 54 44
Benefit not determinable 1 1 2 1

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equat to:
tals. Where applicable, dash indicates no employees in this category.

33

* Benefits are payable for a limited time period, typically 6 months.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Qo=

weight adjustment factor for post-stratification
totals for the i** 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 6,437 usable occupation quotes selected from
the 2,017 responding establishments, rather than tabula-
tions based on data from all employees in all establish-
ments within scope of the survey. Consequently, the data
are subject to sampling errors, as well as nonsampling
errors.

Sampling errors are the differences that can arise be-
tween results derived from a sample and those computed
from observations of all units in the population being stu-
died. 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.

This evaluation of survey results involves the formation
of confidence intervals that can be interpreted in the fol-
lowing manner: Assume that repeated random samples of
the same size were drawn from a given population and an
estimate of some value, such as a mean or percentage, was
made from each sample. Then, the intervals described by
one’standard error below each sample’s estimate and one

95

standard error above would include the population’s value
for 68 percent of the samples. Confidence rises to 90 per-
cent if the intervals surrounding the sample estimates are
widened to plus and'minus 1.6 standard errors, and to 95
percent if the intervals are increased to plus and minus 2
standard errors.

Nonsampling errors also affect survey results. They can
be attributed to many sources: Inability to obtain informa-
tion about all establishments in the sample; definitional
difficulties; differences in the interpretation of questions;
inability or unwillingness’ of respondents to provide cor-
rect information; mistakes in recording or coding the data;
and other errors of collection, response, processing, cover-
age, and estimation for missing data.

Through the use of computer edits of the data and pro-
fessional review of both individual and summarized data,
efforts are made to reduce the nonsampling errors in re-
cording, 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
impact of these limitations on the EBS estimates is un-
known, reliability measurements are incomplete.

Standard errors for the estimates presented in this bulle-
tin are being prepared, but were not yet available at time of
publication. For those readers interested in these data,
write to: Office of Compensation and Working Condi-
tions, Bureau of Labor Statistics, Washington, DC 20212.



1980's. Between 1979. and 1989, the price of all medical
care rose 119 percent, as measured by the Bureau’s Con-
sumer Price Index. During the same period, the Consumer
Price Index for all items rose 64 percent. First dollar cov-
erage, where benefits up to a certain dollar amount or day
limit are covered in full, without any overall limits im-
posed, has become less prominent as medical care costs
continue to rise.

Separate and overall limitations may apply to the same
category of care. For example, a plan may impose a sepa-
rate limit of 120 days on fully paid hospital room and
board coverage, with protection beyond that point subject
to overall plan coinsurance rates and maximum dollar lim-
itations.

Overall limitations

Plans with overall limitations nearly always require a
participant to meet a specified deductible before eligibility
for benefit payments. This approach is designed to dis-
courage unnecessary use of medical services. In 1990,
nearly nine-tenths of full-time participants were in plans
with overall limits (tables 38 - 42). Almost all participants
in plans with overall limitations were subject to an annual
flat-dollar deductible. Of these participants, however,
slightly more than one-tenth were in plans where the de-
ductible did not apply to hospital room and board e ex
penses,

The most prevalent individual annual deductible was
$100, accounting for about one-third of the participants
subject to overall limits. Deductibles of $200 and $250
were also frequently observed. The average annual deduct-
ible in 1990 was $197 for all. workers.

When a medical care plan covered an employee and
family, a family deductible was often specified in addition
to individual deductibles. After the family deductible is
met, no additional individual deductibles apply during
that year. Four out of 5 participants in plans with overall
limitations had to meet both individual and family deduc-
tibles. Most commonly, family deductibles were equal to
two or three times the individual deductibles.

Once the deductible has been met, the plan almost al-
ways pays a specified percentage of covered medical ex-
penses (usually 80 percent), with the employee paying the
remainder (coinsurance). Less than one-tenth of partici-
pants were in plans where the coinsurance rate was differ-
ent for hospital room and board expenses than for other
expenses. In such cases, the percent of hospital expenses
paid by the plan was generally higher, often 100 percent.

Nine out of 10 full-time participants subject to overall
limitations were in plans where the coinsurance increased
to 100 percent after the individual paid out a specified dol-
lar amount for covered expenses (maximum out-of-pocket
expense). Three-fourths of participants with overall limits
had an annual individual out-of-pocket expense maximum
of less than $1,250. Maximum out-of-pocket ceilings were
also specified for family expenses in plans covering nearly

36

three-fifths of participants with overall limitations. The
annual maximum for out-of-pocket expenses for plan par-
ticipants averaged $934 for an individual and $2,054 fora
family.

Pians that required an annual deductible and placed a
maximum on out-of-pocket expenses covered just under
nine-tenths of the participants subject to overall limita-
tions. The sum of these two items represents the total that
the plan requires an individual to pay for covered medical
expenses in a calendar year. In 1990, the annual deductible
plus the annual out-of-pocket expense maximum averaged
$1,118 per individual.

Plans with overall limitations often place a ceiling on the
amount payable by the plan, usually a lifetime maximum.
In 1990, seven-tenths of the participants in plans with
overall limitations were. affected by a lifetime maximum
only. A maximum of $1 million applied to the majority of
these participants. A small proportion of participants were
subject to a lifetime maximum of greater than $1,000,000;
the average of all maximums was $949,348. Plans that did
not impose a maximum on plan payments covered one-
fourth of the participants subject-to overall limitations.

Hospital coverage

All medical plan enrollees covered by the survey had
benefit provisions for hospital room and board charges
(table 43). Three-fifths of full-time participants were in
plans where hospital room and board expenses were cov-
ered at a percentage of the semiprivate rate, frequently 80
percent. In these types of plans, the individual was typical-
ly subject to a yearly deductible before the percentage rate
would go into effect. Nearly one-sixth of participants had
hospital room and board expenses covered at the full semi-
private room rate for a limited period, followed by a per-
centage of the semiprivate room rate, almost always 80
percent.

One-fifth of participants with hospital room and board
coverage were in plans in which expenses were reimbursed
for the full semiprivate room rate for an unlimited number
of days. Using the semiprivate room rate as a basis for plan
payments furnishes enrollees some Protection against ris-
ing hospital ‘costs.

Alternatives to hospitalization

To help hold down the costs of medical care, a number
of plans provide coverage for less expensive alternatives to
a hospital stay. These alternatives include extended care
facilities, home health care, and hospices (table 36),

Coverage for stays in an extended care facility was avail-
able to slightly more than four-fifths of full-time partici-
pants. Extended care facilities provide skilled nursing
care, rehabilitation, and convalescent services to patients
requiring less intensive treatment than would otherwise be

= 13 This average is slightly different from the sum of the individual av-
erages because some participants have only an annual deductible or only
an annual maximum out-of-pocket expense limitation, The.combined
average includes only those participants with both provisions,