Table 50. Medical care benefits: Percent of full-time
participants In pans with substance abuse benefits by

uniformity in coverage, small privat

lishments, 1992

‘Coverage limitation

Profes-

sional, | Cierical |BIue-cot

techni- | “and | lar and
fea cal, and| sales | service

related | partici | partic

partici- | 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

400 | 100 | 100 | 100

91 92 89 TT
7 7 7 8
2 1 4 1

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

Table $1. Medical care benefits: Percent of full-time participants in plans with alcoho! abuse treatment benefits by extent of

benefits, small private establishments, 1992

Professional, technical, and| Clerical and sales. Blue-collar and service
All participants related participants participants participants
Coverage limitation Inpatient|Inpatient) Out- |Inpatient|inpatient| Out- |inpatient|Inpatient| Out- |Inpatient|Inpatient| | Out-
detoxifi-| rchabil- | patient | detoxif- | rehabill-| patient | detoxif-|rehabil-| patient | detoxif- | rehabill-| patient
cation’ | tation? | care” | cation’ | tation? | care* | cation’ | tation? | care® | cation’ | tation® | care®
Totalt 300 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100
With coverage . 300 | 73 | 75 | 100 | 74 | 78 | 100 | 71 7 | 100 | 74 | 74
Covered the same as other illnesses | 38 9 a | 36 9 | 1 | 38 | 10 a | 34 9 8
Subject to separate limitations® es | o4 | oe | os | o¢ | o7 | o2 | ot | 66 | os | 6 | 66
Limit on days ao | 40 | 26 | 41 | 43 | 28 | 98 | 30 | 24 | 41 | 40 | 2
Per year . 2a | 31 | 2 | 2 | a3 | 2 | 2 | 31} 21 | 2 | 9 | 17
Per confinement 8 5 1 | 10 6 | 9 4| 0 7 5 2
Per lifetime 5 8 4 4 7 3 4 8 6 5 8 5
Limit on number of treatments| 10 7 a] on 10 2 8 6 1 "1 7 4
se | se | 49 | 95 | a6 | 49 | 94) 94 | 49 | 98 | 38 | 40
1 1 12 1 2) 13 1 2| 12 1 1 12
w | 13 | 95 | 12 | 12} 31 sw | 10 | o | 17 | 17 | 36
2a | 2 | 2 | 2 | 90 | 31 | 28 | 28 | 27 | 2 | 28 | 28
4 4 3 2 2 2 3 3 3 5 5 4
Coinsurance limit’. 8 8 | 2 8 7 | 2 7 7 | 2@ | a | 10 | 28
Caling on out pocket expenses
‘does not apply te | tw | 2 | 1 | |] 2 | 1] t¢] 2 | t | 16 | 25
Separate copayment or
deductible 1 1 4 1 1 4] i) 3 1 1 4
Other limitations .. (.) i) O) ) ) i) 1106 ° i) 1 1
‘Without coverage .... iv) 27 25 iv) 26 22 iv) 28 26 iv) 26 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,
dayenight treatment center, or doctor's office. If f benefits differed by loca:
tion of treatment, doctor's office care was tabulated.

“ Includes all workers with some type of alcohol abuse treatment cover-

age.
= Separate limitations indicate that alcohol abuse treatment benefits are

more restrictive than benefits for other treatments. For example, if a plan
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.

7 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.

53



Table 21. Pald sick leave: Percent of full-time employees by sick leave provision, small private establishments,

1992
Profes- Protes-
sional, | Clerical |Biue-col- sional, | Clerical |Blue-col-
‘Atl em- Alem. | techni | and tar and
Sick leave policy’ , Sick leave policy’ oa [ca and| sales | service
Ployees Ployees | related | employ- | employ-
employ-| ees | ees
ees
Total 400 | 100 | 100
After 15 years of
Provided paid sick leave® 53 74 70 35 service:—Continued
10 and under 15 days " 18 15 7
Sick leave provided 18 and under 30 days 2 3 3 1
annually’ ..... 44 55 58 3 30 and under 60 days “ 0 oO O
60 and under 120 days . 1 1 210
After 1 year of service: 120 days or more .. 1 1 1 6
Under 5 days ... 6 5 5 7
5 and under 10 days .. 24 28 33 16 After 20 years of servi
10 and under 15 days " 18 16 7 Under 5 days .. 5 4 4 6
2 3 3 1 5 and under 10 days .. 23 28 32 16
oO vi oO QO 10 and under 15 days orl 18 15 7
60 and under 120 days...| _(‘) 1 iv) 15 and under 30 days win) 1 3 2 1
120 days or more o o Vl o 30 and under 60 days 1 re) 2 yl
60 and under 120 days .. 1 1 1 0
After 6 years of service: 120 days or more 1 1 1 i)
Under 5 days ... 5 4 4 7
5 and under 10 days .. 24 28 32 7 After 25 years of service:*
10 and under 15 days "W 7 15 7 Under 5 days .. 5 4 4 6
15 and under 30 days 2 3 4 1 5 and under 10 days 23 27 32 16
1 1 1 oO 10 and under 15 days 12 18 15 7
1 1 1 0 15 and under 30 days 1 3 2 1
120 days or more ... iv rv] Oo rv) 30 and under 60 days 1 oO 2 ry)
60 and under 120 days 1 1 1 0)
After 10 years of service: 120 days or more .. 1 2 1 0)
Under 5 days... 5 4 4 6
5 and under 10 days .. 23 28 32 16 Sick leave provided on a per
10 and under 15 days 11 17 15 7 disability basis® 7 16 10 2
15 and under 30 days 2 3 3 1
30 and under 60 days “ 1 1 0) As needed basis’ ... 4 8 5 2
60 and under 120 days . 1 4 1 i)
120 days or more Oo iv) 1 (v) Other basis® a iv) 1 - -
After 18 years of Polley not available ..... ) ) V) 0)
5 4 4 6 _||Not provided paid sick leave .. 47 26 30 65
5 and under 10 days .. 23 28 32 16

* 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.

8 ara either granted a specific number of days after com-
pletion of the indicated length of service, or accrue days during the next
12-month period. The total number of days are assumed available for
use immediately upon completion of the described length-of-service in-
terval.

19

“ Less than 0.5 percent.

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

* Employees are granted a specific number of sick leave days for
each illness or disability after completion of the described length-ot-
service interval.

7 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.





Table 60. Dental care benefits: Percent of full-time participants by extent of coverage for selected procedures, small private

establishments, 1992—Continued

‘Type of dental procedure
Extent of coverage . 7 7
pene % | Fitings emgont Inlays | Crowns Periodontal) Endodan- |prasingtiog| Orthoxon
Clerical and sales.
100 400 100 100 100 100 100 400 100
100 100 99 99 95 96 99 96 64
6 6 5 6 6 6 5 6 1
Incentive schedule* 1 4 1 1 1 1 1 iv) (9)
‘Subject to copayment! 2 1 2 2 2 2 2 2 3
Percent of usual, customary,
‘and reasonable charge 90 91 20 89 86 86 89 86 60
0 0 iy) iv) iv) iv) iv) 19) iv)
is) 1 a 12 67 67 43 69 83
- - 1 2 6 8 i) 5 3
1 1 2 2 1 1 2 1 1
0 0 1 1 iy) iy) 1 is) iy)
1 18 2 62 e é 0 62 9 1
2 5 4 5 - -
3 1 1 0 is) 1 0 0
67 7 5 1 1 4 1 2
ie) 1 2 2 2 2 2 1
Subject to overall plan’
provisions only* 1 1 0 0 ro) 0 a -
Not covered wns - (v) 1 1 5 1 4 36
Not determinable .. - - - - o) - - - - -
Blue-collar and service
100 100 100 100 100 100 400 100 100 100
100 100 100 100 88 95 95 100 95 87
8 8 8 8 5 8 8 8 8 -
‘Subject to copayment® | 4 2 3 4 3 5 4 4 5 4
Percent of usual, customary,
| 88 20 87 86 78 at at 86 st 53
= - - eo 19) - a iv) 0
0 1 9 10 56 59 14 12 58 at
- - 2 6 8 8 5 1 8 3
1 1 1 1 1 1 2 2 0 1
0 (9) 2 2 1 1 2 2 1 0
20 23 51 61 8 8 4a 50 10 3
0 4 7 4 iv) iv) 4 8 - -
2 3 E 3 1 1 2 2 1 0
iv) iv) iv) 0 0, iv) J iv) - -
63 87 12 9 2 2 4 9 2 5
Discounted benefit” - - 1 2 2 2 2 2 2 (9)
Not e - 0 iv) iv) " 5 8 iv) 5 43
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 ox-
penses pald by the plan increases if regular dental appointments are
scheduled,

© Participant pays a specific amount per procedure and plan pays all ro-
maining expenses. In the case of orthodontla, the copayment is generally

62

applied ‘once per lifetime.
Includes plans that paid the full cost and plans that pald 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.



mal retirement ages. If a plan’s normal retirement age is 62,
for example, and the reduction factor is 6 percent for every
year under normal retirement age, a person retiring at age 59
would receive 82 percent of the normal formula amount. In
addition to the 18-percent reduction for early retirement, the
annuity in this example would be based on fewer years of ser-
vice and possibly lower earnings than at age 62.

The reduction factor may be uniform or may vary by age or
service. Just over one-half of the participants with early retire-
ment opportunities were in plans with uniform reduction fac-
tors, most commonly 4 or 6 percent for each year of early re-
tirement. In plans with a lower uniform reduction, such as 2
or 3 percent per year, the employer is subsidizing some of the
early retirement benefit by making the reduction less severe
than if benefits were computed actuarially.

Reduction factors that differed by age were used in plans
covering two-fifths of the participants. For most of these par-
ticipants, the reduction factor differed for age brackets of sev-
eral years. Alternatively, some plans imposed a different re-
duction for each year of early retirement, based on the
employee’s life expectancy at that age (actuarial reductions).

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.

Nearly seven-tenths of all participants were covered by plans
permitting early retirement by age 55; generally, 5 to 10 years
of service was required. If service requirements 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 service.

Additional monthly payments supplemented the early re-
tirement pension for 1 of 25 participants if employees retired
after meeting a specified age or length-of-service requirement
generally higher than the minimum needed to retire. Plan spon-
sors include these supplementary benefits either to induce older
workers to retire or as a reward for long service. Supplements
generally last until Social Security benefits are payable,

Disability retirement

A career-ending disability may entitle an employee to a pen-
sion 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 dis-
ability income, such as long-term disability insurance, the dis-
ability retirement benefit might be deferred until the other forms
of income have ceased. Seven out of 10 pension plan partici-
pants in small establishments were covered by some type of
disability retirement provision in 1992 (table 80). To be eli-
gible for disability retirement benefits, participants often had
to meet a service requirement, generally 10 years, or meet the
qualifications of their long-term disability insurance plans.

Although a large majority of full-time employees with dis-
ability retirement coverage were in plans with immediate ben-
efits, nearly half of the professional and technical employees
were in plans with deferred benefits. Employees with deferred

3

benefits were often given long-term disability insurance ben-
efits that typically provide 50 or 60 percent of earnings at the
time of disability; this was more than was generally provided
by pension plans with immediate disability retirement. Fur-
thermore, most deferred retirement benefits were greater than
immediate disability pensions, primarily because the time dur-
ing which long-term disability benefits were paid was typi-
cally 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 discretionary
basis while others are subject to automatic increases speci-
fied in the pension plans. Plans that increased pensions for
current retirees at least once during the 1987-91 period cov-
ered fewer than 1 of 10 pension plan participants. Half of these
increases were discretionary, or ad hoc, and half were auto-
matic (table 80). The 1992 survey found no pension plans that
gave lump-sum payments to retirees to compensate for
inflation.

Since the survey provides only the number of current em-
ployees covered by defined benefit pension plans and not the
number of retirees, the survey cannot specify the proportion of
annuitants actually receiving postretirement pension increases.
Thus, the measures discussed in this section describe the inci-
dence of postretirement increases given by plans covering
participants.

Ad hoc pension increases were not directly linked to a cost-
of-living index. Instead, retirees’ current pensions were usu-
ally increased by a percent of the present benefit, commonly a
uniform amount. During the 1987-91 period, most pension
plans granting ad hoc increases provided one increase, com-
monly no greater than 5 percent of the current pension amount.

Few plans in small private establishments provided for au-
tomatic increases in pension benefits to compensate for in-
creases in the cost of living. Where they were found, these
cost-of-living-adjustment formulas were often based on changes
in the BLS Consumer Price Index.

Portability

For the first time, survey data in small private establish-
ments were available on the portability of pension benefits,
that is, the ability to transfer years of credited service or accu-
mulated benefits from one employer to another. In 1992, 2 out
of 10 full-time employees with a defined benefit pension plan
were covered by a portability provision (table 80). Most of these
participants were covered by a multi-employer plan established
by a union; some employees were covered by single employer
plan offered by an establishment with a portability agreement
with related establishments. If an employee moved to another
employer, benefits from the prior employer, usually in the form
of years of credited service, were transferred.



Table 3. Work schedules: Percent of full-time employees by Table 4. Paid lunch time: Percent of full-time employees by

hours scheduled per week and per day, ‘ small private minutes of paid lunch time per day, small privat
establishments, 1992 establishments, 1992
Profes- Profes-
sional, | Clerical jBlue-col- sional, } Clerical |Blue-col-
‘Alem. | techni | and | tar and ‘Alem. | techni | and | tar and
Work schedule cal, and] sales | service Minutes per day {cal and] sales | service
ployees | rojated | employ- | employ- ployees | ralated | employ-| employ-
employ-| ees | ees employ-| ees | ees
ees ees
Total .. 100 | 100 | 100 | 100 Total 100 | 100 | 100 | 100
Hours per week: Provided paid lunch time . 9 | 12 8 8
4 2 3 5 Under 30 minutes. 1|/ ¢ 1 1
5 6 7 3 30 minutes 5 6 4 6
2 2 2 2 Over 30 minutes . 3 5 4 1
4 7 7 2 Number of minutes not
1 1 2 1 available ... (0) ¢) - -
79 74 | 74 | 84
3 3 4 3 Not provided paid funch time .. 91 es | 92 | 92
2 4 1 1
Non-fixed work week? 2 2 2 1 Less than 0.5 percent.
NOTE: Because of rounding, sums of individual items may not equal to-
Hours per day: |, 0 0 2 tals. Where applicable, dash indicates no employees in this category.
1 1 1 2
1 iv) 1 1
5 6 7 3
7 8 10 4
ao | 76 | ve | 83
1 1 1 1
2 2 2 1
iv) tv) iv) iv)
2 2 1 2
1 2 iv) 1
Non-fixed work days*.... 2 2 2 1

* Work schedule data included paid lunch and paid rest periods.

? Work schedules for these workers are discretionary or undefined,
‘such as university professors, sales workers, and executives. Reported
hours per week and per day were based on an estimated schedule and
were included in the hours distribution above.

® 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 5. Paid rest time: Percent of full-time employees by
minutes of paid rest time per day, smail private establish-

ments, 1992
Profes-
sional, | Clerical |Blue-col-
All em. | techni: | and | tar and
Minutes per day f cal, and} sales | service
Ployees | related | employ- | employ-
employ-| ees | ees
ees
Total 100 | 100 | 100 | 100
Provided paid rest time .. 49 40 56
Under 15 minutes 1 iv) iV) 2
15 minutes | 3 2 3
Over 15 and under 20 minutes | (') 0) v) v)
20 minutes | 12 7 8 16
Over 20 and under 30 minutes... 1 0) v 1
30 minutes .. | 31 30 29 33
> Qver 80 minutes 1 1 (0) 1
Number of minut
available t) iv) 1) iv)
Not provided paid rest time ... 51 60 87 44

* 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. 9



Table 67. Life insurance: Percent of full-time participants In plans with multipte-of-earnings formulas’ by amount of basic
insurance and maximum coverage provisions, small private establishments, 1992

In-plans with maximum coverage
Ing plans 7 Maxi Not
laximur|
Formula Total Imaximum| —,, | 4®8° | $s0,000- / 100,000- | $250,000- | $600,000- | $1,000,000 | coverage determi.
coverage $50,000 | 99.999 | $249,099 / $499,999 | $999,999 | “or more | varies by
¥ earnings j
All participants |
Total .. 100 a 68 1 7 19 20 6 4 i) " i
Life insurance is
‘equal to annual
earnings times?
1 0 1 - 19) ts) - - 1 - - |
47 12 29 1 12 9 3 1 2 i) 7
1" 4 6 i) 3 1 1 a is] - 1
) - | 04 - - - ) - 0 - -
34 4 26 i) 2 7 42 4 1 0 2
5 is) 4 - 0 1 3 Q Q - is)
3 1 1 - - 1 @ @ @ - 1
1 1 1 - - - a is) @ - -
Multiple varying
with earings 1 - 1 - a i) 0 0 - - - |
Professional,
technical, and
related
Total 100 22 70 1 16 18 26 4 5 i) 8
Life insurance is |
‘equal to annual
earnings times?
Less than 1.0 3 - 3 - 1 i) - - 1 - -
1.0 39 4 23 i) 4 7 1 1 ( 5 i
15 10 3 G fe) 1 3 1 (o) io) - 2
1649 a - 6 ~ - - a ~ 6 : -
20 4 5 34 i) 3 7 2 2 2 - 1
25 2 1 1 a ie) @ 1 - - - |
3.0 3 1 2 - - 1 QO 1 a - 0
Mor 10 2 1 1 - - - 0 iv) 0 - -
Multiple varying
with @aMings wun! 4 - 1 - a ) co) G) - -
Clerical and eales
Total 400 18 69 1 15 19 23 7 5 ) 13
Life insurance is
equal to annual i
earnings times:? |
1 - 1 - 19) a - - is) - - |
45 10 28 a 14 8 4 1 3 a 7
10 4 4 0 2 1 iy) 1 (7) - 2
3 3 26 - 1 7 12 4 2 - 3
a] af tf} i) 2) Fy, ee | ef ey ye
1 ) 1 - - - 1 0 - -
Multiple varying
with earnings ...... 1 - 1 - - to) io} io) - - -
See footnotes at end of table.
{
Co |



Table 27. Sickness and accident insurance:

Percent of full-time participants with benefits based on Percent of

earnings formula by maximum weekly benefit, small private establishments, 1992—Continued
Maximum weekly benefit
Data
eof payment Total | TO! | Loss none | Pet
Type of paymer O12! | with | Ge8% |$160 to}8200 to|$260 to| $200 to|$360 to $400 to| $450 to|$500 or mom | avails
maxi- | siq | $199 | $248 | $2a9 | s34o | $399 | $449 | $499 | more able
mum
Biue-collar and service
Total .. 100 | 81 4] 43 2| at 4 1 3 1 3] 18 1
Fixed percent of eamings . ss | 78 3] 43 2| 19 4 1 3 1 3] wy]
Less than 50 ) - - - - - - - - -1@ -
50 47 | 46 1| 40 1 2 1| - - - 1 -
olo}] -]o ~J of sf -]} =] -] -fad -
22 8 1 1/0 2 - a] - 1] wf] -
ol] -;| -7; -} -] - -| -| -{ -f@] =
QO r0) - - - - - - - 0. 0 -
24] 22 1 2| 0 16 1 1 1{ - 1 2{ -
2 2 - v) Y v) iv) - - 1 iv) - ~
0) ) -| =] -f[ =] o -7 -~-f -} - |] -] 0
O; Of =) =f oe] -fo-7 -f -} - fafa].
110 -| -|o - -f =] -} -] =] 0 -
Percent of eamings varies .. 4 2 ty = - 1 - - - - 1 1 1
* Less than 0.5 percent,

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

Table 28. Sickness and accident insurance: Percent of
full-time participants by length-of-service requirement for
participation,’ small private establishments, 1992

Profes-
sional, | Clerical |Biue-col-
All par- techni- and | lar and
Length-of-service requirement | cipants cal, and] sales | service
related | partici- | partici
partici. | pants / pants
pants
Total 100 | 100 | 100
With service requirement 81 74 82 82
1 month .. 45 4 49 43
5 5 3 5
12 12 n 13
n 9 u 12
3 3 3 3
iy) - - iy)
4 2 5 5
is) 2 @ to)
Without service requirement 5 19 13 14
Service requirement not
determinable ... 5 7 4 4

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 requirament. Minimum age requirements are
rare.

? Less than 0.5 percent.



Table A1. Number of establishments and full-time occupational quotes studied and estimated number of full-time workers:
within scope of survey, small private establishments, United States, 1992

‘Number of establish-

Number of occupational quotes studied

Industry division’ a ‘
ments studied Professional, techni- i Blue-collar and
Total Cal and related | Cltical and sales senine
All industries 2,491 6,666 1,583 2,403 2,680
Manufacturing 214 697 93 107 497
Nonmanufacturing 2,277 5,969 4,490 2,296 2,183
jini a7 90 7 14 69
258 682 401 82 499
Trans; , communications,
electric, gas, and sanitary services 173 487 108 154 225
Wholesale trade 295 888 131 412 345
Retail trade 391 845 70 409 366
Finance, insurance, and real estate .| 405 1,236 366 773 97
Services a 728 4,741 707 452 682
Estimated number of full-time workers within scope of survey
All industries ... 34,360,241 6,150,853 10,944,882 17,264,505
Manutacturing ... 4,679,786 487,326 636,515 8,855,945
Nonmanutacturing 29,680,456 5,663,528 10,308,967 13,708,561
Mining .. 249,178 6,761 16,976 z
Construction 3,421,600 326,245 936,258 2,759,097
Transportation, communications,
electric, gas, and sanitary services 4,773,674 251,080 598,434 984,160
Wholesale trade 273 464,236 1,992,853 1,519,185
Retail trade 149,870 384,640 2,747,686 4,017,544
Finance, insurance, and real estate . 3,068,043, 740,657 4,871,363 456,023
Services 10,101,817 3,489,008 2,864,798 3,747,111

+ As defined in the 1987 edition of the Standard Industrial Classifica
tion Manuel, U.S. Office of Management and Budget. Industry data are

shown for informational purposes only and are subject to larger than nor-

mal sample error. See section on reliability of estimates.

2 These figures refer to all respondents to the survey, whether or not

they provided data for all items studied. See the section on survey re-
sponse.

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



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. In a fee-for-
service plan, when a benefit is covered in full, all expenses up
to the usual, reasonable, and customary charges, or the pre-
vailing hospital semiprivate rate, are borne by the plan,

Internal or separate limitations restrict the level of coverage
for a particular type of medical service, independent of other
pian provisions. An example of a separate limit is a maximum
of 45 days of hospitalization per year for mental health care.

Overall limitations are deductibles, coinsurance require-
ments, maximum benefit levels, or other provisions that apply
to many, if not all, types of medical care provided under the
plan. Examples of overall limits include a requirement that
the employee pay the first $100 of expenses in a year, regard-
less of the source of the expense, before the plan will begin
payments (deductible); a requirement that the employee pay
20 percent of covered expenses beyond the deductible (coin-
surance); 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 payments of $1 million (maximum).

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. (PPO’s also impose overall limits, but may alter or
reduce those limits if services are received from designated
providers.)

The most common type of payment arrangement 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 coinsurance 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 limitations only. Services for which at least three-fifths
of plan participants had coverage subject to overall limits only
were physicians’ office visits, in-hospital physician services,
diagnostic x-rays and laboratory services, outpatient prescrip-
tion drugs, inpatient surgery, and outpatient surgery.

Separate and overall limitations may apply to the same
category of care. For example, a plan may impose a separate
limit of 365 days per confinement on fully paid hospital room
and board coverage, with protection beyond that point sub-
ject to overall plan coinsurance rates and maximum dollar
limitations.

Overall limitations

Plans with overall limitations nearly always require a par-
ticipant to meet a specified deductible before eligibility for
benefit payments. This approach is designed to discourage
unnecessary use of medical services. In 1992, 88 percent of
full-time participants were in plans with overall limits (tables
36-40). Ninety percent of the participants in plans with over-
all limitations had coverage subject to an annual flat-dollar
deductible. Of the participants with overall limitations, how-
ever, 13 percent were in plans where the deductible did not

33

apply to hospital room and board expenses.

The most prevalent individual annual deductible was $100,
applying to three-tenths of the participants subject to overall
limits. Deductibles of $200 and $250 were the next most com-
monly observed deductibles. The average annual deductible in
1992 was $220 for all workers. The amount of the average
deductible showed some variation between occupational groups.
It was highest ($236) for professional, technical, and related
participants and lowest ($210) for blue-collar and service
participants.

When a medical care plan covered an employee and family,
a family deductible was often specified in addition to indi-
vidual deductibles, After the family deductible is met, no addi-
tional individual deductibles apply during that year. Four out
of 5 participants with overall limitations were in plans that
specified limits on the number of persons in the family re-
quired to satisfy an annual deductible. Most commonly, fam-
ily deductibles were equal to two or three times the individual
deductibles.

Once the deductible has been met, the plan almost always
pays a specified percentage of covered medical expenses, with
the employee paying the remainder (coinsurance). The percent-
age of expenses paid by the plan varied greatly between tradi-
tional fee-for-service plans and PPO’s. PPO’s offer a higher
benefit for services rendered by designated health care provid-
ers (such as hospitals and physicians), although participants
retain the option of choosing any provider. Ninety percent of
participants in traditional fee-for-service plans with overall
limitations had their expenses paid at 80 percent. In contrast,
PPO enrollees were most likely to have their expenses paid at
90 percent or more, including 14 percent of PPO participants
with overall limitations who had their expenses paid at 100
percent. Workers who had their coverage paid at 100 percent,
however, were generally subject to a yearly deductible and a
lifetime plan maximum.

Fewer than 1 out of 10 participants were in plans where the
coinsurance rate was different 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-tenths of full-time participants in plans with overall
limitations had their coinsurance increase to 100 percent after
they paid out a specified dollar amount for covered expenses
(maximum out-of-pocket expense). Slightly more than three-
fifths of participants in plans with overall limits had an an-
nual maximum individual out-of-pocket expense of $1,000 or
less. Maximum out-of-pocket ceilings were also specified for
family expenses in plans covering just under three-fifths of
participants with overall limitations. The annual maximum
for out-of-pocket expenses for plan participants averaged
$1,108 for an individual and $2,262 for a family.

Plans that both required an annual deductible and placed a
maximum on out-of-pocket expenses covered 81 percent of
the participants subject to overall limitations. The sum of these
two items represents the total that the plan requires an indi-
vidual to pay for covered medical expenses in a calendar year.



Table 55. Medical care benefits: Average monthly
contribution of full-time participants in contributory plans,

‘small private establishments, 1992

Profes-
Al ck sional, | Clerical |Blue-collar
partici-| technical, | and sales | and serv-
‘Type of coverage pants: and re- | partici» |ice partici-
lated par-| pants | pants
ticipants
All plans
Employee coverage $36.51 | $35.04 | $35.97 | $97.76
Family coverage’ 160.54 | 147.18 | 150.64 | 152.34
Health maintenance
organizations
Employee coverage 39.31 | 35.11 | 3693 | 42.46
Family coverage’ vases 168.31 175.08 | 152.66 | 176.14
Non-health maintenance
organizations
Employee coverage 35.74 35.02 35.72 36.18
Family coverage’ ..... 147.03 | 142.55 | 150.27 | 147.00

* 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.

Table 56. Medical care benefits: Percent of full-time participants by requirement for employee contribution and type of
provider, small private establishments, 1992

'AN participants Professional, technical, | Clerical and sales. | Blue-collar and service
Participan ‘and related participants participants particlpants
‘Type and amount of contribution
Employee | Family | Employee | Family. | Employee | Family | Employee | Family
coverage | coverage | coverage | coverage | coverage | coverage | coverage | coverage
Health maintenance organi 100 400 100 100 400 100 100 400
Non-contributory 38 22 36 15 35 20 40 27
Contributory. 62 7 64 85 64 73 60 73
Not determinable 0 iV) Q iV) iv) (Vv) 1 1
Non-health maintenance organizations 100 400 100 100 100 100 100 100
\Non-contributory 55 26 54 22 53 26 58 33
Contributory .. 44 ral 45 7 46 74 a 66
Not determinabie 1 1 1 1 (0) 0 1 1

* Less than 0.5 percent.

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

58



Table 30. Long-term disability Insurance: Percent of full-time participants with benefits based on percent of earnings
formula by maximum monthly benefit, small private establishments, 1992

Total Maximum monthly benefit Data
with not
Type of payment Total | maxi. | $1500 | $1501- | $2001- | $2501- | $2001- | $3501-| $4001- | $5001-| $7501- | $10,001 | availa
mum | or less | $2000 | $2500 | $3000 | $2500 | $4000 | $5000 | $7500 | $10,000 | or more | ble
All participants
Total .. 81 3 3 2 17 1 3 20 16 13 4 19
Fixed percent of earnings 93 78 3 3 2 7 1 3 19 15 13 4 15
Less than 50 percent . 11 6 i) - - - - - 14 f) - - 0
50 percent 6 4 1 1 0 - iv) - 1 1 © 0 2
2z'o@)-)] -| -} -| =} =] -le}oe] ps] 4
pe 62 54 2 2 1 14 1 2 13 8 eo 2 8
65 or 67 percent 18 7) @ io) ie) 2/0 2 5 4 2 1 1
70 percent 4 2 - - | 0 1 - - | 6 is) 19) is) 2
Other percent .. 1 1 - -| 6 - - - - . 1 L -
Percent varies by eamings ......| 7 3) @ (o) - 0 - - 2] @ ie) i) 4
Percent varies by service } - - - - - - -|@ - - 6
Percent varies during disability.) (*) - - - - - - - - - - a
Professional, technical, and
related
Total .. 100 89 3 3 2 21 1 3 at 15 16 4 1
Fixed percent of earnings 97 86 2 3 2 a1 1 3 20 15 165 4 1
Less than alolaea -} 5] 2) -] -1 6 : - “| 6
50 percent 5 41 @ ie) - - 0 - a 2 @ re) 1
58 percent elol-J =] 2} 2) -) =] -} ea) 2] =] oe
60 percent 64 | 59 1 2 1 2] 8 1 13 9 8 3 5
65 or 67 20 19 1 © 0 1 fe} 1 6 3 6 1 a
70 percent 6 2| - - tp - - -|@o]o a oe 4
Other perce! 1 +| -| -| 0 ee ee ee 1 : :
Percent varies by earnings .. 3 3 1 - -| 0 - - 110 1 ie) 0
Percent varies by service oe |o -| -} -] - -| -|@ - - le
Percent varies during disability.| -| -} -} -] -] -] -] -] - - - lo

See footnotes at end of table.

29



Table 60. Dental care benefits: Percent of full-time participants by extent of coverage for selected procedures, small private

establishments, 1992

Type of dental procedure

Extent of coverage
Examina- | Dental X- Dental Periodontal] Endodon- Orthodon-
tons raya | Filings | surgery! | inlays | Crowns [Ee ies. [Prosthetics] "ee
All participants
Total 100 100 100 100 100 100 100 100 100 100
100 100 99 400 92 96 96 100 96 61
‘Scheduled cash allowance 6 6 6 6 4 6 6 6 G 0
Incentive schedule* .. iV) i) 0 i) is} i) i) i) iv) is)
‘Subject to copayment® : 3 1 2 3 2 3 3 3 3 3
Percent of usual, customary,
and reasonable charge ......| 90 92 20 89 a4 85 85 89 85 57
Less than 60 9 0 0 iy) is) 0) iv) iV) iy) 19)
50 io) 1 "1 2 63 65 18 44 68 48
- - 1 3 7 7 3 rv) 7 3
61-74 1 1 1 1 1 1 2 2 1 1
7 iv) V) 2 2 1 1 1 1 1 i)
80 17 20 87 87 10 9 53 56 9 2
85 rv) 2 5 4 is) 0 4 6 - -
90 2 2 3 3 4 1 2 2 iv) ie)
91 iy) iv) is) is) 13) iv) is) iv) - -
100° 69 65 8 7 1 1 3 6 1 3
Discounted “ iv) 0 4 1 1 1 1 1 1 1
Subject to overall plan
provisions only? 1 1 9) 9) iv) 0 fo) Q iv) -
- 0 1 0 8 4 4 iv) 4 39
= . - - ) - - - - -
100 100 100 100 400 100 100 100 100 100
100 100 99 99 94 98 96 99 96 84
‘Scheduled cash allowance 3 2 3 3 2 3 3 3 3 1
Incentive schedulet . i) iy) 10) i) i) is) iv) te) i) is)
‘Subject to copayment” . 2 1 2 2 2 2 2 2 2 2
Percent of usual, customary,
and reasonable ChAMg6 wen} 94 95 a4 93 89 9t 91 93 91 61
Q i) 0 0. e ie) iv} iv) 0 is)
i) 1 15 17 70 73 23 19 74 85
- - 1 1 6 6 1 (0) 6 2
1 1 1 1 1 1 1 1 1 iy)
0 0 2 2 1 1 2 2 1 iv)
16 18 60 60 1 W 54 58 8 2
- iV) 8 3 - - 4 4 - -
1 1 4 4 i] i] 3 8 0 -
7 14 8 6 i) tu) 2 6 oe) 1
Discounted - - iv) iv) ce) is) 0 0 is) i)
Subject to overall plan
provisions only’ .. 1 1 - - - - - - - -
Not covered - (0) 1 1 6 4 4 1 4 36

‘See footnotes at end of table.

61



Table A2. Number of establishments and part-time occupational quotes studied and estimated number of part-time workers
within scope of survey, small private establishments, United States, 1992

Number of occupational quotes studied?
aot Number of establish-
Industry division ments studied Total Professional, techni- | Creicat and sales |  Blue-collar and
cal, and related service
All industries 2,491 1,164 179 485 500
Manufacturing .. 214 30 1 9 20
Nonmanufacturing 2,277 1,134 178 476 480
Mining 27 6 1 5 -
Construction 258 34 1 17 16
‘Transportation, comi
electric, gas, and sanitary services 173 54 7 20 7
Wholesale trade 295 51 3 24 24
Retail trade 391 299 4 166 129 }
Finance, insurance, and real estate .| 405, 146 9 107 30
Service: 728 544 143 187 264
Estimated number of part-time workers within ‘scope of survey i
All industries 9,758,856 816,320 3,663,138 5,279,398 |
Manufacturing ... 168,602 6,750 47,173 114,878
Nonmanufacturing 9,590,254 809,570 3,615,965, 5,164,720
Minis 50,851 21,004 29,847 -
144,409 3,229 67,982 73,198
‘Transportation, communications,
electric, gas, and sanitary services 411,127 40,898 100,383 (269,846
Wholesale trade .. 187,002 10,055 103,663 73,284
Retail trade .. 5,447,623 28,392 2,122,018 3,297,213
Finance, insurance, 446,610 21,560 278,137 146,913
Services 2,902,632 684,431 913,985 1,304,266

As defined in the 1987 edition of the Standard Industrial Classitica- they provided data for all items studied. See the section on survey re-
toon 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. Where applicable, dash indicates ns ‘employees in this catagory.

98



tal care may be offered as a part of a comprehensive medical
and dental plan, or as a separate plan in addition 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. Of the participants in
dental plans:

© The overwhelming majority were reimbursed by a percent
of the usual, customary, and reasonable charge for all den-
tal procedures;

» Two-fifths were required to contribute toward the cost of
their individual coverage, and seven-tenths were required
to contribute toward the cost of family coverage;

¢ Nearly two-thirds were in plans that specified a yearly de-
ductible amount before any benefits were paid by the plan;

e Just over four-fifths were covered by plans that limited the
amount of payment each year by specifying an annual
maximum benefit.

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 applicable, went to-
ward dental coverage. Employee contribution data were ex-
amined in stand-alone dental plans, that is, those offered sepa-
rately from medical plans. When such plans required an em-
ployee contribution, that contribution was typically under $15
per month for individual coverage and under $25 per month
for family coverage.

Eighty-five percent 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
(table 35). Such plans were most commonly self-insured or
obtained through a commercial insurer. The remaining
participants had their dental benefits provided through either
a health maintenance organization or a preferred provider
organization.

Dental plans nearly always covered preventive and restor-
ative services, and three-fifths of participants were in plans
that also covered orthodontic expenses, at least for children.
Preventive care typically includes dental examinations,
prophylaxis (cleaning), and x rays. Restorative procedures in-
clude such basic services as fillings, periodontal care, and
endodontic care, and such major services as inlays, crowns,
and prosthetics.”

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

1 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,

39

Less than 1 out of 10 dental plan participants were offered
reimbursement based on a schedule of cash allowances for re-
storative 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 par-
ticipant or dentist. Orthodontic care was rarely subject to this
type of schedule,

Incentive schedules were rarely found in the survey. Under
this arrangement, the percent of dental expenses paid by the
plan increases each year if the participant is examined regu-
larly by a dentist.

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 pre-
ventive care, while higher copayments often applied to major
dental services.

Sixty-five percent of dental participants were in plans that
specified a deductible amount before any benefits were paid by
the plan. The most frequently observed individual deductible
was $50 per year. Dental plans often placed a limit on the
amount of deductibles for each family (usually three times the
individual deductible). A few plans required the participant to
pay a one-time deductible (usually $50) rather than a deduct-
ible every year,

Plans that limited the amount of payment each year by speci-
fying an annual maximum benefit covered 84 percent of den-
tal plan participants. The most common limit was $1,000 per
year, and the average was $1,105. Among participants in plans
with orthodontic services, 85 percent had orthodontic benefits
subject to a separate lifetime maximum. These orthodontic
maximums which were usually either $1,000 or $1,500, aver-
aged $1,078.” Professional, technical, and related employees
had the highest average lifetime orthodontic maximum ($1,154)
and blue-collar and service participants had the lowest aver-
age ($995).

Preauthorization clauses require participants to obtain au-
thorization from the plan before undergoing expensive treat-
ment. Fifty-seven percent of dental participants were in plans
with this cost containment technique. Commonly, procedures
costing $200 or more were subject to advance authorization.

Finally, a small percentage of participants were covered by
plans with only preventive dental care, which includes dental
examinations, prophylaxis (cleaning), and x rays (table 53).
These participants with only preventive dental care almost al-
ways had their benefits provided under HMO’s.

Vision Care

Vision care coverage was available to 10 percent of full-time
employees in small private establishments in 1992 (table 65).”
Sixty-six percent of participants covered by vision care provi-

% For more details on dental care benefits, see Rita S. Jain, “Employer-spon-
sored Dental Insurance Eases The Pain,” Monthly Labor Review, October 1988,
pp. 18-23,

2 Eyewear (eyeglasses and/or contact lenses) must be included for there to be
vision care coverage. If a plan provided only eye examinations, for tabulation
purposes, the plan was not considered as providing vision care coverage.



Table 82. Cash or deferred arrangements:' Percent of
full-time employees participating in plans permitting
employee contributions with pretax dollars, small private
establishments, 1992

Profes-
sional, | Clerical /Blue-col-
techni- | and | lar and
Item flovoce [eal and] sales | service
related | employ- | employ-
employ-} ees | ees
ees
Percent of all employees in plans
with cash or deferred arrangement] 24 34 28 18
Salary reduction plans* 24 33 27 18
‘Savings and thrift plans 13 20 7 9
Deferred profit sharing plans 4 4 5 4
‘Supplemental contributions to
money purchase pension plans| 1 2 1 1
Freestanding accounts? 6 7 5 4
Simplified employee pension 1 1 1 1
Other’... 1 3 1 1
Regular contributions to pension
plans on a pretax basis® . iv) 1 1 iv)
Deferral of profit sharing allocation’ .| (*) iv) (v) Vv)

* Tabulations show percent of employees participating in plans that al-
low 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.

* Employer contributions are not made to the plan.

* Employee may allocate funds in a flexible benefits plan to a retire-
ment account.

® Includes contributions to defined benefit and money purchase pension
plans. 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.

® Less than 0.5 percent.

7 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.

81

Table 83. Retirement plans:' Percent of full-time
participants by vesting provisions, small private
establishments, 1992

Protes-
au sional, | Clee Blue-collar
tem Ml nts} technical, | and sales
participants! ang retated|participants| pencrants
participants!
Defined benefit pension
plans
Total 100 100 100 100
Cliff vesting* 85 89 86 83
Graduated vesting’ 15 Ww 4 7
Savings and thrift plans
100 400 100 100
31 30 26 29
24 14 26 28
45 47 46 42
iv) - iV) 1
Deferred profit sharing
plans
Total 100 100 100 100
Immediate full vesting 8 12 W 3
Cliff vesting? 10 7 7 13
Graduated vesting’ 82 81 82 84

* Excludes supplemental pension plans.

2 Under a cliff vesting schedule, an employee is not entitled to any
benefits accrued under the plan until satisfying the requirements for 100
percent vesting.

3 Graduated vesting schedules give an employee rights to a gradually
increasing share of accrued benefits, determined by years. of service,
‘eventually reaching 100 percent vesting (usually after 7 years).

* Under class-year vesting, employers’ contributions for a particular
year (class) become nonforfeitable after employees satisfy vesting
Tequirements.

* 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.



« Just over half of the full-time employees in small es-
tablishments had sick leave coverage in 1992, and one-
quarter had sickness and accident insurance coverage;

Sick leave was more commonly a white-collar benefit; sick-
ness and accident insurance was available equally to work-
ers in all occupational groups;

Sick leave plans, on average, provided 9.1 days per year
with full pay at 5 years of service;

« Sickness and accident insurance benefits commonly pro-
vided 50 or 67 percent of regular pay for 26 weeks.

For longer term or permanent disabilities, long-term
disability insurance may be available to provide income
replacement.

¢ While 23 percent of all full-time workers had long-term
disability insurance coverage, more than three-times
as many white-collar as blue-collar workers received this
protection;

e Long-term disability insurance typically replaced 60 per-
cent 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 benefits pro-
vided to full-time employees in small establishments— seven-
tenths of workers participated in such plans. The availability
of other health-related benefits was less prevalent—one-third
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 occupational groups.

For full-time employees participating in medical care plans:

e 53 percent were in plans paid for entirely by the employer
for individual medical care, and 27 percent for family
coverage. Where workers contributed, their average
monthly premiums were $37 for individual coverage, and
$151 for family coverage;

¢ 18 percent participated in plans with a preferred provider
option. Participants choosing the option received care at
lower costs if treatment was provided by designated hos-
pitals or physicians;

« 14percent participated in health maintenance organization
plans;

« 18 percent were in plans that continued coverage, funded
at least in part by the employer, after retirement.

Among dental care participants:

* Virtually all had coverage for preventive and restora-
tive dental procedures, while three-fifths had coverage
for orthodontia;.

* Just over four-fifths were covered by plans that imposed
annual limits on dental expenses, typically $1,000.

Life insurance protection was available to nearly two-thirds
of full-time employees in small establishments in 1992—three-
fourths of white-collar and slightly over half of blue-collar em-
ployees,

Among full-time employees with life insurance
protection:

e Three-fifths were covered by life insurance based on a flat
dollar amount; this was more prevalent among blue-col-
Jar than white-collar participants;

¢ Two-fifths had insurance available on the lives of their
spouses;

¢ One-fourth were in plans that continued employer-
financed life insurance coverage after retirement.

Defined benefit pension and defined
contribution plans

Forty-five percent of all full-time workers were covered by
at least one retirement plan in 1992. Defined contribution plans,
which specify employer and employee contributions but do not
guarantee future benefits, were the most frequently observed
form of retirement plan. Such plans can be vehicles for fi-
nancing retirement benefits if funds can not be withdrawn eas-
ily, or they may be shorter term capital accumulation plans if
periodic withdrawals are allowed. Defined contribution plans
were available to 33 percent of the full-time workers, 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 pen-
sion (SEP).

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

¢ Nearly all savings and thrift plan participants were required
or allowed to contribute funds on a pretax basis, defer-
ting income taxes until funds are received from the plan;

© The typical employer matching rate in a savings and thrift
plan was 50 percent, and generally applied to the first 6
percent of earnings saved by the employee;

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

Defined benefit plans, which specify a formula for de-
termining future benefits, were available to 22 percent of full-
time employees in small establishments.

For participants in traditional defined benefit pension re-
tirement plans:

* The majority were in plans with formulas based on earn-
ings, most frequently on earnings during 5 consecutive
years of employment;





80 percent if the individual chose a non-PPO provider. An-
other common arrangement was for plans to pay 100 percent
of covered expenses if the participants stayed within the PPO
network and 80 percent if they went outside of the network.

About 1 in 3 workers covered by a PPO had an annual de-
ductible based on who provided care."” Enrollees in PPO’s may
be subject to a yearly deductible of $100; however, if they go
outside of the network, the deductible might be $200. There
are also some plans where participants in PPO’s are not sub-
ject to a deductible for network services, but are required to
pay one if they do not go to the designated providers.

Finally, 38 percent of the PPO participants were in plans
subject to a modest copayment for physicians’ office visits, for
example, $10 per visit. For these same workers, visits to non-
preferred doctors were usually covered under overall limits,
requiring satisfaction of an annual deductible and a 20-per-
cent coinsurance paid by the enrollee.

Prescription drug benefits

Virtually all participants had medical plans that provided
coverage for outpatient prescription drugs (table 34). Inpa-
tient prescription drugs are always covered under hospital
miscellaneous services, generally in the same fashion as room.
and board charges. Outpatient prescription drugs, when pro-
vided are covered under a separate provision of the medical
plan or a separate outpatient prescription drug plan.

Coverage for outpatient prescription drugs differed by type
of medical plan. Usually in non-HMO plans, outpatient pre-
scription drugs were covered under overall limitations only;
that is, before any benefits were provided, the participant was
subject to a yearly deductible or a coinsurance requirement.
However, in HMO’s, prescriptions were usually subject to a
minimal copayment, commonly $5 per prescription.

It is more likely for non-HMO participants to have prescrip-
tion drug coverage than HMO participants, and rare for both
HMO and non-HMO participants to have prescription drugs
covered in full. Sixteen percent of HMO participants were not
covered for prescription drug benefits, compared with 3 per-
cent of non-HMO participants.

A prescription can often be filled using either a brand name
drug or a generic drug; generic drugs are often less expensive
than their brand name counterparts. Eighteen percent of the
participants with prescription drug coverage received a higher
reimbursement for obtaining generic rather than brand name
prescription drugs.

Mail order drug programs were available to 10 percent of
employees with prescription drug coverage. These programs
provided drugs for maintenance purposes, that is, drugs re-
quired on a continuous basis. In such arrangements, partici-
pants often receive a higher reimbursement or are charged less
for mail order drugs than for drugs purchased directly from a
pharmacy.'®

1’ This figure differs from that published in the January 27, 1994 news release,
USDL 94-42.

8For a more comprehensive discussion on prescription drug coverage, see Cathy

Baker and Natalie Kramer, “Employer-sponsored Prescription Drug Benefits,”
Monthly Labor Review, February 1991, pp. 31-35.

36

Mental health coverage

Mental health coverage, though available to nearly all par-
ticipants, was frequently subject to more restrictive limitations
than other illnesses (table 49). Of the medical care partici-
pants with mental health benefits, 83 percent had more re-
strictive hospital coverage for mental illness than for other
ailments. Plans commonly limited the duration of hospital stays
to 30 or 60 days per year for mental health care, compared to
120, 365, or unlimited days for other illnesses.!° They also
frequently imposed a separate, lower, dollar maximum on all
mental health expenses, such as a lifetime maximum of
$50,000.

Even more restrictive was coverage for mental health care
outside the hospital (psychiatric office visits). Virtually all
participants with mental health care coverage were subject to
special limits for outpatient care in 1992. 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 at a coinsur-
ance rate of 50 percent rather than the usual 80 percent paid
by the plan for other illnesses. Also, outpatient 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 per-
cent even when the out-of-pocket expense limitation was met.”

Alcohol and drug abuse treatment

Alcohol and drug abuse treatment benefits covered nearly
all full-time medical participants (tables 50-52). Nine out of
10 participants with alcohol abuse treatment benefits had their
coverage treated the same as those for drug abuse treatment.
Benefits provided under substance abuse care included both
detoxification and rehabilitation. Detoxification involves su-
pervised care by medical personnel designed to reduce or elimi-
nate the symptoms of chemical dependency. Rehabilitation is
designed to provide a variety of services intended to alter the
behavior of substance abusers. Such services are generally pro-
vided once detoxification has been completed.

Virtually all participants covered by alcohol abuse treatment
benefits were eligible for inpatient (in-hospital) detoxification,
but only 73 percent received inpatient rehabilitation coverage.
(Wetoxification is generally considered 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 treatment, generally rehabilitative care, was avail-
able to 75 percent of participants with alcoholism coverage.
Coverage patterns were similar for drug abuse treatment
benefits.

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

® A detailed examination of mental health care provisions in employer-pro-
vided health care plans is provided by Allan P, Blostin in “Mental Health Benefits
Financed By Employers,” Monthly Labor Review, July 1987, pp. 23-27.



Table 66. Life insurance: Percent of full-time participants
by method of determining amount of basic life Insurance
and frequency of related coverages, small private

establishments, 1992

Profes-
sional, | Clerical |Blue-col-
Altpar- | ‘eehnt | and | tar and
ftem ticipants| C2! 2nd! sales | service
pants related | particl- | partici
partici | pants | pants
pants
400 | 100 | 100 | 100
Basic life Insurance" 99 98 98 99
Based on earings .. 37 46 44 25
Multipte® .. 34 45 43 21
Graduated schedule 3 2 4 4
Flat amount... 61 51 54 73
Flat amount based on servi 1 0 0 1
With accidental death and
dismemberment coverage 76 81 75 74
With survivor income benefit’ weenne| 1 1 0) 1
Supplemental benefits available ......| 31 36 35 26
Wholly employee paid 29 33 32 24
With dependent coverage 39 39 40 39
Wholly employee pald 20 25 24 15

* A few participants received only accidental death and dismemberment

insurance or survivor income benefits.

® Includes patticipants in plans in which insurance equaled a muttiple of
earnings, plus or minus a specific amount.

Legs 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.

67



contributions that varied by length of service, level of employee
contribution, or company profits.”

Investment decisions. Just over four-fifths of participants in
savings and thrift plans were allowed to choose how they
wanted their own contributions invested. Common investment
vehicles offered by these plans included company stock, com-
mon stock funds, guaranteed investment contracts, money
market funds, and long-term interest bearing securities such
as corporate bonds and U.S. Treasury notes. The number of
choices in these plans typically varied from two to five. Employ-
ees were nearly always allowed to split their contributions
among the various options and were allowed to change their
investment choices periodically.

Employees generally had less flexibility when it came to
employer contributions. Three-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 com-
pany stock.

Withdrawals and loans, Prior to normal payout at retirement,
disability, or termination of employment, one-half of the par-
ticipants in savings and thrift plans were allowed to withdraw
all or a portion of employer contributions. Nearly three-fifths
of these participants were allowed to withdraw employer con-
tributions for hardship reasons only, such as medical or edu-
cational expenses. The remaining participants could withdraw
employer contributions for any reason, Two-fifths of partic-
ipants 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—two-fifths of par-
ticipants in savings and thrift plans were allowed to borrow
from their accounts, Occasionally, participants were restricted
to loans for emergency or hardship situations only, Loans were
generally required to be repaid within 5 years, but longer pay-
ment periods applied for home purchase or renovation loans.

Interest rates on employee loans were typically determined
by a specific economic indicator (such as the prime rate or
US. Treasury bill rate); were at the discretion of the plan spon-
sor (employer, employer association, or union); or varied by
the reason for the loan. In the latter case, loans for the pur-
chase of a home were often available at lower rates than other
loans. The majority of participants with loan provisions paid
tates of interest that varied by the reason for the loan.

Distribution. At retirement, savings and thrift plans virtually
always allowed for payout in the form of a lump sum. Many
participants were given a choice from among a lump sum and

* For more details on employee and employer contributions to savings and
thrift plans, see Michael Bucci, “Lump Sum Benefits Available from Savings and
Thrift Plans," Monthly Labor Review, June 1993, pp.57-60.

76

other options, such as a lifetime annuity or installments over a
specified period.

Profit-sharing plans

Profit-sharing plans were available to 16 percent of all full-
time employees in small establishments in 1992 (table 81).
There are three types of profit-sharing plans—cash plans (cov-
ering less than 0.5 percent of the workers), deferred plans (16
percent), and plans that offer a combination of cash and de-
ferred benefits (less than 0.5 percent). In a cash 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, such as disability 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
employee 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 contributions. 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 exceeded $1 million.

Once the employer contribution is determined, it may be
allocated to individual participants in a number of ways.
For nearly all participants, the method of allocation was as a
proportion of salary. Other allocation methods included for-
mulas based on earnings and service, and equal allocations to
all participants.“

Participation and vesting in defined benefit and
defined contribution plans

Minimum age and/or service requirements for plan partici-
pation are more common in defined contribution plans than in
defined benefit plans. To begin accumulating benefits, eight-
tenths of savings and thrift and virtually all deferred profit-
sharing plan participants had to meet such requirements. In
contrast, only two-thirds of defined benefit plan participants
faced such provisions.

Of the defined benefit and defined contribution plans with
participation requirements, most required a minimum 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 permitted under the Internal Revenue
Code.

Even when an employee leaves an employer before becom-
ing eligible for either a normal, early, or disability retirement
benefit, a pension may ultimately be paid. If certain condi-
tions are satisfied at the time of separation, workers havé a
vested interest in all or a portion of their accrued defined ben-

“* For more details on profit-sharings plans, see Edward M. Coates, I, “Profit
sharing Today: Plans and Provisions,” Monthly Labor Review, April 1991, pp.
19-25.

* Some plans, such as those found in religious institutions, are exempt from
certain restrictions in the Internal Revenue Code and may require employees to
meet greater age or length of service levels before coverage.





Medical benefits
Dental benefits
Vision benefits

Effect of retirement
Hospital coverage

Alternatives to hospitalization
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

Diagnostic x-ray and laboratory testing coverage

Mental health care benefits
In-hospital room and board charges
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
Premium incentives
Physical examinations
Organ transplants
Well-baby care
Immunization and inoculation
Birthing centers
Preventive dental care only (examinations and/or
xX rays)
Vision examinations only

Cost containment features
No or limited reimbursement for nonemergency
weekend admission to hospital

“U.S. Government Printing Office: 1994 — 901-200/14561

102

Preadmission testing
Preadmission certification requirements
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

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

Each medical expense section (e.g., hospitalization, prescrip-
tion drugs, physician charges) contains information on inter-
nal limitations; these limits apply only to that category of care.
For example, hospital room and board may have an internal
limit of 120 days per confinement. Information on overall limi-
tations is also included in each section, identifying limits that
apply to more than one category of care. These overall limita-
tions—deductibles, maximums, coinsurances, and out-of-
pocket expense limitations—are then described at the end of
the database. Three sets of data on overall limitations are avail-

able for plans that include multiple overall limits.



Preface

This bulletin presents results of a 1992 Bureau of Labor
Statistics survey of the incidence and detailed provisions of
selected employee benefit plans in small private establish-
ments. The survey provides representative data for 44 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 1992 Employee Benefits Survey reports on benefits
provided to employees in establishments with fewer than 100
workers in all private nonfarm industries. This is the second
time this survey was conducted; the first small establishment
survey was conducted in 1990. 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 exam-
ined 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 in 1990, the Employee Benefits Survey included
both full-time and part-time employees in all private indus-
tries (regardless of employment) and State and local govern-
ments. In that year, the survey covered small private estab-
lishments and governments. At the present time, small private
establishments and State and local governments are surveyed
in even-numbered years, and medium and large private estab-
lishments are surveyed in odd-numbered years.

Data for this bulletin were compiled and analyzed in the
Division of Occupational Pay and Employee Benefits Levels

by Cathy Baker, Michael Bucci, Thomas Charboneau, Edward
Coates, Kenneth Elliott, Jason Ford, Avy Graham, Robert
Grant, Glenn Grossman, Douglas Hedger, Stephanie Hyland,
Jonathan Kelinson, Natalie Kramer, Marc Kronson, Laura
Scofea, Patrick Seburn, Margaret Simons, Cynthia Thomp-
son, Jerline Thompson, and Arthur Williams, under the direc-
tion of Allan Blostin, James Houff, and John Morton. Text
was prepared for publication by Mahin Eslami.

Computer programming and systems design were provided
by David Caples, Mary Constable, Mohamed Elzein, Aholivah
Maier, Lien Nham, Robert Roscoe, and Cheryl Sims of the
Division of Directly Collected Periodic Surveys, under the
direction of Leslie Chappel. Mary Gessley, Thomas Kelly,
Sylvia Miller, and Jill Montaquila of the Statistical Methods
Group (Office of Compensation and Working Conditions) were
responsible for the sample design, nonresponse adjustments,
sample error computations, and other statistical procedures,
under the direction of Chester Ponikowski. Fieldwork for the
survey was directed by the Bureau’s Assistant Regional Com-
missioners for Operations.

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

Questions on the data in this publication should be referred
to the staff of the Employee Benefits Survey at (202) 606-
6222. Sensory impaired individuals may obtain information
in this publication upon request. Voice phone: (202) 606-STAT;
TDD phone: (202) 606-5897; TDD Message Referal phone:
1-800-326-2577.

Pictured on the cover of this bulletin is Boy on Stilts by
Norman Rockwell, (c) 1919, The Curtis Publishing Company,



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Table 26. Sickness and accident Insurance: Percent of full-time participants by type and duration of payments, small
private establishments, 1992—Continued

Maximum weeks of coverage
Type of payment Total Less than Greater | Varies by
Total 13 13 14-25 28 27-51 52 | thane | ‘service
Blue-collar and
service
All types 100 100 38 7 2 70 2 3 1 2
Fixed percent of eamings .. 65 65 1 10 1 50 i) 3 ) 1
Less than 50 iv) iv) - - - iV) - - - -
50 32 2 0 28 - - - 1
iy) 0) - - iV) ~ ~ -
15 15 () 6 1 5 (o) ) -
( Q) - - ) - - -
0) 0) - - - Vv) - ~
16 16 0) 1 - 15 - Vv)
1 1 = ) - 1 - -
Y «) - 1) ~ - - 0
Y Q - 0 0) ~ - ~
oO oO - - - Q - - Vv)
Percent of earnings varies 3 3 0) 0 - 2 - - - )
By service 1 1 (0) - - 1 - - - -
By length of disability 0 (0) - 0 - - - - - -
By both service and length of
disability 1 4 - - - 1 - - )
By eamings .... 0 “) - rv) - - - -
Fixed weekly dollar benefit 30 30 2 7 1 18 1 1 ) 1
Less than $100 8 8 2 4 iv) 2 - Vv) 0 -
7 7 - 2 1 4 - - i) 1
3 3 - i) () 2 1 - - -
4 4 - 1 “ 3 - - -
3 3 - - - 3 - 0) - -
4 4 - Oo - 3 ce) 1) - ~
Y iv) - 0) - iv) - oO - -
Weekly doliar benefit varies 2 2 H 1 0) )
By earings ... 1 1 - 0) - QO 1 0) - -
By service or 1 1 - - i) - - 0 -

* 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.



and for services not covered under a medical care plan, such
as hearing or vision exams. 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 premiums.

Reimbursement accounts are usually funded solely by em-
ployee pretax money, although some accounts are funded ei-
ther wholly or partially by employers. Reimbursement accounts
may be part of a flexible benefits plan, or they may stand alone.

About two-thirds of employees eligible for reimbursement
accounts could allocate funds for medical care deductibles,
coinsurances, and other health expenses not covered by their
medical care plan (table 87). Just under three-fifths of eligible
employees could use money from these accounts to pay for
dependent care expenses, generally including both child-care
and care for elderly or disabled relatives. Reimbursement ac-
count funds could also be allocated for the payment of the

83

employees’ share of health care premiums, In fact, about one-
third of all reimbursement accounts were designed solely for
pretax payment of health premiums (also known as “premium
conversion” plans),

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

Individual benefit plans offered through a flexible benefits
plan were analyzed and included in the tabulations for spe-
cific benefit areas in this bulletin.

** For information on flexible benefits plans in medium and large private es-
tablishments, see Joseph R. Meisenheimer and William J. Wiatrowski, “Flexible
Benefits Plans: Employees Who Have A Choice,” Monthly Labor Review, De-
cember 1989, pp. 17-23.



Table 74. Retirement and capital accumulation plan
coverage: Percent of full-time employees by participation in
retirement plans and capita! accumulation plans, smail
private establishments, 1992

Profes-
sional, j Clerical |Blue-col-
techni- | and | lar and

All em-

cal, and| sales
Ployees | rotated | employ- | employ-
employ-| ees

‘Type of plan

Covered by retirement or capital

accumulation plan 47 65 53 40
Retirement! onl 43 50 48 37
‘Capital accumulati 2 3 1 2
Retirement and capital

accumulation 2 3 4 1

Not covered by retirement or capital

accumulation plan 8. 53 45 a7 60

* 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 equal to-
tals. Where applicable, dash indicates no employees in this category.

Table 76. Defined benefit pension plans:' Percent of
full-time participants by method of determining retirement
Payments, small private establishments, 1992

Table 75. Retirement and capital accumulation plans:
Percent of full-time participants by selected plan types and
combinations of plans, small private establishments, 1992

Protes-
sional, | Clerical |Blue-col-
‘Atpar-| techni: | “and | lar and
Type of plan ticipants |b and! sales | service
ipants | related | partici- | partici.
Partici- | pants | pants
pants
Defined benefit. 100 | 100 | 100 | 100
With:
No other plan 6 | 60 | 61 70
‘Savings and th 22 | 28 | 27 16
Other combinations’ 13 12 12 14

100 100 100 | 100

‘Savings and thritt ...
With:

No other plan
Defined benefit
Other combinations'

42 47 39 43
35 29 40 36
22 25 a ai

100 | 100 | 100

79 73 7 82
8

12 14 14 10

Deferred profit sharing ....
With:

No other plan
‘Savings and thrift plan
Other combinations’

* May include contributions with one or more defined contribution plans,
including money purchase, deferred profit sharing, savings and thrift, and
stock plans,

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

Table 77. Defined benefit pension plana:' Percent of
full-time participants by selected formula-related plan
features, small private establishments, 1992

Profes-
sional, | Clerical |Blue-co!-
; ‘Alt par- | teehni- | “and | tar anc
Basis of payment ficipamts| 2! and} sales | service
related | partici- | partici
partici. | ‘pants | pants
pants:
Total 100 100 100

Terminal earnings formula 54 78 60 a
No altemative formu 44 65 47 34
Alternative formula? 10 13 43 7

Career earnings formula 12 13 a 5

Doltar amount formula? 7 5 6 30

Percent of contributions formula ....... 16 3 12 23

Cash account 1 1 1 1

‘ Excludes supplemental pension plans.

* Altemative formulas are generally designed to provide a minimum
benefit for employees with short service or low eamings.

* Inchides formulas based on dolar amounts for each year of service
and flat monthly benefit varying by service.

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

78

Profes-
All sional, | Glorial | Puarolar
ftem technical, | and sales id
Participants eae ans service
: ipants|
participants| Participants
All pension formulas
Benefit integrated with
Social Security? wan) 46 4 60 23
Offset by Social
Security”... 21 a7 29 5
Step-rate excess 26 3 35 18
Benefit subject to a limit

(on years of credited

service | 4 49 a 34
Terminal earnings

formulas
Earnings used in benefit

computation:

Total . 100 100 400 100
Three years 7 7 14 at
Five years 76 80 ai 60
Other periods 6 4 5 10

' 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.

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



Table 2. Other benefits: Percent of full-time employees

gible for specified benefits, small private establishments,

1992
Profes-
sional, | Clerical |Biue-co-
techni | and | lar and
Benefit anem | cal, and| sales | service
Ployees | related | employ- | employ-
employ-| ees | es
ees
1 | 26 | at 8
() iv) 0) oO
Family benefits:
Employer assistance for child
CBF rar 2 3 3] 0
‘Adoption financial assistance 3 7 4 2
Eldercare . 3 4 5 2
Long-term care insurance .. 1 2 1 1
Health promotion programs:
In-house infirmary 2 4 2 1
Wellness programs 7] 1] 10 3
Employee assistance programs .| 17 | 24 | 21 | 12
Miscellaneous benefits:
Employer-subsidized recreation
~ 7] 1 7 4
1 | 24 | 1 | 1
Nonproduction bonu a7 j 52 | 50 | 43
Prepaid legal services 1 3 2 1
Education assistance:
as | st | 43 | 26
5 7 6 4

* Less than 0.5 percent.



Table 41. Medical care benefits: Percent of full-time
Participants in plans with hospital room and board coverage
by type of benefit payments, small private establishments,
1992

Table 42. Medical care benefits: Percent of full-time
Participants in plans with hospital room and board
coverage by copayment requirement and type of
Plan, small private establishments, 1992

Profes-
sional, | Clericat |Blue-col-
All par. | techn: | and | lar and
Type of payment tek Par | cal, and} sales | service
ipa related | partici- | partici-
partici | pants | pants
pants
Total 100 100 100
Full semiprivate rate 16 18 15 16
Full semiprivate rate for unlimited
days but subject to a separate
deductible or separate dollar
maximum ... 4 4 3 6
Full semiprivate rate for limited days 1 1 1 2
Full semiprivate rate for limited
period, then percent of semiprivate|
rate 15 13 18 13
80 percent .. 14 12 7 1
Other 1 1 1 2
Percent of semiprivate rate 59 63 60 57
80 percent. 46 47 47 45
85 percent .. 1 1 1 1
90 percent .. 9 12 8 8
3 3 3 3
1 ie) 1 1
1 1 1 2
Daily dollar allowance, plus percent
of the full semiprivate rate ... 3 e® 2 4

ery Health
mainte. | mainte-
All plans nance
nance | organi-
organ: | rations
All participants
Total . 100 | 100 | 100
‘Subject to a copayment 14 13 18
No copayment required a6 | 87 | 82
Protessional, technical, and
related
Total 100 | 100
Subject to a copayment 15 14} 20
No copayment required a5 | 86 | 80
Clerical and sates
Total 100 | 100 | 100
Subject to a copayment 14 14 19
No copayment required .. se | se | at
Blue-collar and service
Total 100 | 100 | 100
Subject to a copayment 14 13 16
No copayment required .. 86 | 87 | a4

* Includes plans in which expenses were reimbursed for the full semi-
Private room rate for an unlimited number of days without either a sepa-
rate deductible or separate dollar maximum.

® 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.

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

this category.



Table 92. Summary: Percent of part-time employees participating’ In selected employee benefit programs, small private

establishments,’ 1992

Protes- Profes-
sional, Blue- sional, | Gericai| Blue
‘Attem. | techni |MCAl| cotay techni. | Clerical
em-| a | and | Sn All em. |!
Employee benefit program BlOY | and te- sales | service Employee benefit program ploy: | and te-
tated |e |empioy ees" | lated
jemploy-i ees’ jemploy-|
ees? ees?

Paid: Dental insurance—Continued
Holidays 29] 35 | 37 | 22]! Family coverage:

Vacations 31] 35] 33 30 ‘Wholly employer financed . 1 1 11 0
Personal leave 3 4 4 3 Partly employer financed 2 5 3 2
Lunch period 5 3 2 7
Rest time at | 14 | 40 | 27 I[Life insurance 6 7 8 5
Funeral leave . 12} 20) 19 7 Wholly employer 4 5 5 4
Jury duty leave 18 | 22] 19] 14 Partly employer financed 2 2 2 1
Military leave 4 5 8 2
Sick leave a] 4] 17 7 |IAN retirement... 12 7| 17 9
Maternity leave rv) - 1 -

Defined benefit pension ... 4 1 5 3

Unpaid: Wholly employer financed 4 1 5 3
Matemity leave 7 9 9 6
Paternity leave 4 5 5 4 |[Detined contribution® 9 7| 14 6

Uses of funds:

Sickness and accident insurance .. uw} 14] 414 8 Retirement” 9 6] 13 6
‘Wholly employer financed 5 5 6 4 Wholly employer finance 7 3 9 6
Partly employer financed 7| 10 8 5 Partly employer financed .. 2 3 4 1

Capital accumulation? oO 1 1 ie)

Long-term disability insurance 1 4 1/ 0 Wholly employer financed* i) - | 06 -
‘Wholly employer financed 1 4 1 o Partly employer financed .. oO 1 ) 0
Partly employer financed ro) -| 0 = |] Types of plans:

Savings and thrift 2 4 3 1

Medical care 5 7 7 4 Deferred profit sharing . 7 3] 10 5

Employee coverag Employee stock ownership .. is) iv) oO -
‘Wholly employer financed 3 4 4 2 Money purchase pension 1 2 1
Partly employer financed 3 4 3 2 Simplified employee pension 0) -1 0 -

Family coverage:

Wholly employer financed 1 1 2 1 {Stock option ... ) - -10
Partly employer financed 4 6 5 3
{Stock purchase .. iv) - | 0 ~

Dental care 3 7 4 2

Employee coverage: Flexible benefits plans .. 1 - 1 1
‘Wholly employer financed 2 3 a/ 0
Partly employer financed 2 4 1 1 |[Reimbursement accounts 2 3 3 1

* Participants are workers covered by a paid time off, insurance, re- employees participated in both retirement and capital accumulation

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.

® See appendix A for definitions of the occupational groups.

* Less than 0.5 percent.

© Includes defined benefit pension plans and defined contribution re-
tirement plans. The total is tess 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

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. Excludes pure cash profit
sharing, stock option, and stock purchase plans.

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

90



Table 67. Life insurance: Percent of full-time participants in plans with multiple-of-earnings formulas’ by amount of basic
insurance and maximum coverage provisions, small private establishments, 1992—Continued

In plans with maximum coverage
In plans Not
without Maximum |
Formula Total |maximum| a, | SES | $50,000. | $100,000. | $250,000- | $500,000- | $1,000,000 | coverage determi:
coverage $99,099 | $249,999 | $499,009 | $099,080 | or more -|varies by] "PC
$50,000
4 earnings
Blue-collar and
service
Total 100 24 65 4 23 a1 8 8 2 fel 10
Life insurance is
equal to annual
earnings times:?
Less than 1.0 1 (6) e - i) - - ~ ra - -
6 15 36 3 15 13 3 1 1 10
i 5 9 o 6 te) 1 1 - - -
3 18 1 7 3 6 r7) ro) 1
+] @ 1 - ) i) 1 - - - | 0
— 1 re) 7) - fe} - ro) - - -
with earnings won| 4 - 1 - 1 i) - - - - -

* 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.

® Less than 0.5 percent.

® When the multiple-of-eamings formula varied with age, the maximum
multiple was tabulated. A few plans varied the multiple-of-eamnings for-

Table 68. Life Insurance: Percent of full-time
participants in ptans with flat dollar Insurance’ by
amount of baste insurance, small private
establishments, 1992

Profes-
sional, | Clerical |Blue-co!-
‘Aipar-| techni. | and | lar and
Amount of insurance |,uj-ber,|cal, and| sales | service
pants related | partici- | particl-
partici | pants | pants
pants
400 | 100 | 100 | 100
1 is) 1 4
4 1 4 5
13 6 13 16
42 43 4a 42
16 15 19 15
13 13 abl 13
6 8 5 5
e|-) ale
- 1 | ¢
0 1 10) -
2 4 2 1
2 4 2 1
Average flat dollar
amount .... .| $14,843] $20,352) $14,801] $12,860

* Excludes participants in plans where insurance was a fiat
amount based on service.
® Less than 0.5 percent.

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

mula according to service; in these cases, a participant was assumed to
have 15 years of service.

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

Table 69. Life insurance: Average benefit amounts for
full-time participants by specified annual earnings, small
private establishments, 1990

Profes-

at an | sina, | Clerical Blue-colar
‘Annual earnings Al ta| technical, | and sales

Participants and related] participant|, oar nents

participants
$25,000 s24e25 | $34,786 | $27,788 | $17,307
$95,000 so4a2 | 42.019 | 95,998 | 20.493
$45,000 95,623 49,021 42,527 23,100
$86,000 4oatt | 85,000 | 49,170 | 25,745

Table 70. Life Insurance: Percent of full-time participants in
basic life Insurance plans by effect of retirement on
coverage, small private establishments, 1992

Profes-
sional, | Clerical jBlue-col-
‘Al par. | t2ehni- | and | lar and
Effect of retirement Helpers | Cal and| sales | service
ipants | related | particl- | particl-
partici | pants | pants
pants
Total 100 100 100
Insurance continues" 2 | 23 | 31 | 22
Ineurance discontinued immediately.| 72 | 74 | 67 | 75
Not determinable . 2 3 2 2

1 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 30. Long-term disability insurance: Percent of full-time participants with benefits based on Percent of earnings
formula by maximum monthly benefit, smail private establishments, 1992—Continued

Total Maximum monthly benefit Data
with not
Type of payment Total | max- | $1800 | $1501-] s2001- | s201-] $2001- | $a501-| $4001-| $5001-| $7601- | $10,001 | avalla-
mum | or less | $2000 | $2500 | $3000 | $2500 | $4000 | $5000 | $7500 | $10,000 | or more | ble
Clerical and sales
Total . wo} e¢| 2] 2) 2| a 1| 3) 2] tw] 14 3] 16
Fixed percent of eaming o7| e2] 2] 2] 2] a 3] | wl 14 a] 46
Less than 50 percent 6 ro) -| -| = -| -7 - - - | @
7] 4] 1/0] 06 - - 1 1| @ ) 3
3 - - ~ - - - 0 © - 3
e2| 3] 4 1 +) 45 1| ww] 6] 4 2 7
2 | ii] - i] @ 4 2] 2] 8 4 1 2
af 3} =| -] -] 2) 2] =leye}l ol o! 3
1 1 - - 0 - - - - - 1 - -
Percent varies by earings ...~ zs} 2} 014 -| 0 -| - 1] ea] 4 oe |e
Percent varies by service ... ela -j -;| -}| -]| -}| -) -J]o - - |e
Percent varies during disability.| - - - - - - - - - . - e
Blue-collar and service
Total . wo; @ | 6| s} 1] 4] a] 5] | 8 4] 35
Fixed percent of eamings so | 61 s} 4] 4] 4] 4 5s} a7] i 8 4/1
Less than 50 percent 1| 6 -| -/| -] -}] -}] “| -]@ - - 1
6} 4] 4 a] -] -]| 2] -] 6 - - 1 2
ajo} -| -) =} 2} 2) t]) ole] a} slo
so) 44] 4| 3] 4 4, 0 3] 9] 1 7 +] 45
W " - - - (e) 2 7|/@ Q is)
2 2 - - - - - @ (a) 1 1
e;eo]-)]-;e} =f} fpr} ep fy 2] 2
Percent varies by earings .. zo] 4} 4 1} -] -7 -| - 2| - - - 16

‘ Maximum payment from plan before offsets are deducted. Ex-
cludes disability incoma maximum provisions, which do not restrict
LTD payments unless the level of income guaranteed by the plan plus
other nonofisetting income exceeds a specified percentage of
Predisability earnings or flat dollar amount.

ss than 0.5 percent.

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

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

establishments, 1992

Profes-
sional, | Clerical |Blue-col-
All par. | techni | and | lar and
Length of waiting period fieipants cal, and| sales | service
related | partici- | partici-
partici- | ‘pants | pants
pants
Total ... 100 100 100 100
Less than 3 months . 8 6 5 | 16
3 months 34 4 29 33
4 3 4 6
42 39 48 33
2 4 1 1
3 1 4 2
e iv) -
7 5 8 9

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

ments.

* Benefits commence after expiration of paid sick leave and/or sick-

ness and accident insurance benefits.
° 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.

30



Table 34. Medical care benefits: Percent of full-time participants by coverage for selected categories of care, small private

establishments, 1992—Continued

Care provided
Category of medical care Total Subject to | Subject to / Subject to | are not pro-
All Covered in full | internal limits | overall limits | intemal and
only? only? overall limits,
Clerical and sales
Hospital room and board 100 100 2 4 58 26 -
Extended care facility’ 400 85 4 19 4 48 15
Home health care® 100 85 " 14 16 43 15
100 56 5 9 16 26 44
100 100 27 ) 68 5 -
100 100 31 i) 63 6 -
100 100 22 1 68 10 -
100 100 6 12 73 9 -
100 100 23 6 67 410 -
400 95 1 25 63 7 5
100 97 1 16 8 7 3
ie 100 95 i) 18 74 5
Alcohol abuse treatment
Inpatient detoxification* 100 95 7 1" 20 87 6
Inpatient rehabilitation’ 100 67 1 10 7 4B 33
Outpatient rehabilitation” 100 70 1 14 5 50 30
Drug abuse treatment
Inpatient detoxification® 100 a1 7 a 18 55 9
Inpatient rehabilitation” 100 64 1 10 5 48 36
Outpatient rehabilitation’ 100 68 1 13 4 49 32
Biue-coltar and service
Hospital room and board 100 100 13 4 55 28 -
Extended care facility? 100 81 5 16 "1 49 19
Home health care* 100 75 12 10 7 36 25
Hospice 100 86 6 5 20 24 44
‘Surgery
Inpatient .... 400 100 at 1 69 9 -
Outpatient’ 100 100 28 1 63 9 -
100 100 7 67 16 -
100 100 4 18 70 9
Diagnostic X-ray and laboratory 100 100 24 6 66 10
Prescription drugs—nonhospitat 100 96 1 27 61 6 4
Mental health care
In hospital 100 94 2 14 9 69 6
Outpatient .. 100 94 () 7 3 74 6
Alcoho! abuse treatment
Inpatient detoxification® 100 96 7 a 14 63 4
Inpatient rehabilitation’ 100 7 1 "1 5 55 29
Outpatient rehabilitation” 100 n 1 14 6 5 29
Drug abuse treatment
inpatient detoxification’ 100 95 7 10 15 62 5
Inpatient rehabilitation’ 100 68 1 10 5 53 32
‘Outpatient rehabilitation’ 100 68 1 13 5 49 82
* Internal limits apply to individual categories of care, @.g., separate _by a general hospital.

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.

2 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.
* Some plans provide this care only to a patient who was previously
hospitalized and is recovering without need of the extensive care provided

42

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

* Less than 0.5 percent.

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

7” Rehabilitation Is designed to alter abusive behavior in patients once
‘they are free of acute physical and mental tions.

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 benefit provisions, small private establishments, 1992

‘Type and dollar amount of Al participants Professional, technical, | Clerical and sales | ‘Blue-collar and service
‘maximum s and related participants participants participants
Total 100 100 100 100
With maximum limits 74 70 72 78
Lifetime maximum only 70 67 69 72
Less than $100,000 1 (9) 1 1
$100,000 .. 1 Q 0 2
$100,001-$249,999 a © iv) 0
$250,000 6 7 7
$250,001-$499,999 e 0 19) =
$500,000 3 2 3 3
$500,001-$999,999 1 @ 1 19]
$1,000,000 51 49 48 53
More than $1,000,000 8 8 8 8
Annual or disability maximum
‘only 3 2 2 4
Both lifetime and annual or
disability maximums .. 1 1 1 2
Other maximum ... i) - a -
Without maximum limits 26 30 28 22
Average lifetime maximum $1,027,411 $1,063,431 $1,003,467 $1,029,865.

Maximum described is for each insured person. Where the
maximum differed for employees and dependents, the employee

maximum was tabulated.
? Less than 0.5 percent.

this category.

47

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



Table 35. Health care benefits: Percent of full-time participants by arrangement for payment to providers and type of

financlal intermediary, small private estabfishments, 1992

‘Al participants Professional, technical, and| Clerical and sales Blue-collar 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 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100
Traditional fee-for-service . es | e5 | 66 | 63 87 | 55 | 71 89 70 | 68 8t 67
No intermediary—self
insured? .. a | 40 | 35 | 23 a7 | 2 | 26 | 4 | 34 | 20 37 | 99
Commercial insurance company| 24 | 95 17 | 26 38 22 27 | 38 | 23 | 22 31 4
Blue Cross-Blue Shield 15 4 4 12 5 2| 16 2 4 15 5 4
Independent organization 0 1 1 1/0 11 0 e 1/ 6 2 2
Medical or dental society - G 9 - 5 - 3 @ - 7 "1
Combi-cd .. 2 re) - 2 - - 2 0 - 2 - -
Preferred provider organization* 18 8 13 24 8 17 16 6 8 16 9 14
No intermediary~self
insured? ... 5 4 1 5 2 2 6 1 1 3 7 1
Commercial insurance company| 9 2 3 13 4 1" 6 2 3 F) 1 1
Blue Cross-Blue Shield 4 1) 0 5 1/0 3 1/0 3 1/0
Independent organization 0 ~ 0 - - 0 - 1 - -
Medical or dental society - 1 8 1 3 - 2 4 - 1 12
COMbINED nnn ) - - - - - 0 - - (cy - -
Prepaid health maintenance
organization* 14 6 7 14 5 26 13 5 16 16 9 14
No intermediary--self
insured? e - - (v) - - 0 - - - -
Commercial insurance company} 2 1 1 3 4 ) 1 1 2 1 1
Blue Cross-Blue Shield 2 1 3 1 i) 3 1 2 2 1 3
Independent organization 10 5 13 9 4 | 22 10 13 12 7 {| 10
Other .. to) o) 4/0 - 2/0 ) 5 | © 1 4

7 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-
mercial carrier through Administrative Services Only (ASO) contracts.

3 ‘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 pian limits
reimbursement rates when participants use nonmember services.

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

* 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 plan benefits.

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

43



formulas applied to nearly one-sixth of pension plan partici-
pants. Although the dollar amount in these formulas some-
times varied with an employee’s earnings or service, the pre-
dominant method was to multiply a uniform (single) dollar
amount by years of service. Uniform dollar amounts credited
per year averaged $28 a month.

Percent-of-contribution formulas, which specify a periodic
contribution by an employer, and occasionally by an employee,
to a plan, also accounted for one-sixth of the pension partici-
pants in small establishments. Such formulas are common in
multiemployer plans covering full-time employees in small
establishments in such industries as contract construction and
trucking. (See Chapter 7.) Benefits under percent-of-contribu-
tion formulas are a percent of total contributions, for example,
1 percent of total contributions per month. If career contribu-
tions totaled $40,000, monthly pension benefits would equal
$400.

Cash account pension plans, which specify an employer con-
tribution and guarantee a rate of interest on that contribution,
accounted for the remaining participants. 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 by the em-
ployer leads to their classification as defined benefit plans by
the Internal Revenue Service.

Private benefits and Social Security payments

Regardless of whether they provide private retirement plans,
employers (except certain exempted ones) share the cost of
Social Security coverage equally with their employees. Because
many plan sponsors feel that private pension and Social Secu-
rity benefits should not be duplicative, formulas for calculat-
ing private pensions are often integrated with Social Security.
Private pension plans may contain an offset provision under
which part of the Social Security pension is subtracted from
the annuity. Alternatively, they may include a provision to cal-
culate the benefit at a lower rate for earnings below a specified
level (either the Social Security taxable wage base—usually
the career average—or a dollar amount equal to a past taxable
wage base) than for earnings above that level.2”

Social Security offsets are generally applied immediately
upon retirement, whether or not the retiree is eligible for So-
cial Security benefits. The offset relates to a percentage of the
Social Security payment, for example, 1 percent times years of
service. Frequently, the maximum offset is limited to 50 per-
cent of the Social Security payment.

Plans that apply lower pension benefit rates to an employee’s
earnings below a specified level and higher rates above that
level are known as step-rate excess plans. For example, a plan
may provide a benefit equal to 1 percent of earnings up to the
Social Security taxable wage base and 1.5 percent of earnings

+7 For an analysis of how integrated formulas affect pension benefits, see Avy
D. Graham, “Coordinating Private Pension Benefits With Social Security,”
Monthly Labor Review, March 1994, pp. 35-38.

72

above the base for each year of service,

Benefit formulas were “integrated” or coordinated with So-
cial Security for 46 percent of all pension plan participants
(table 77). In 1990, the offset approach to integrating private
pension plans and Social Security was more prevalent than
the excess approach. In 1992, excess plans were the most fre-
quently observed method of integrating benefits for earnings-
based plans. This change is a result of the Tax Reform Act of
1986, which imposed new rules for pension plans that inte-
grate with Social Security benefits.**

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 participants were
in plans that limited the number of years of service included
in benefit computations, usually 30 years (table 77).

Normal retirement

One-half of defined benefit plan participants in small estab-
lishments could retire before age 65 (usually at age 62) and
still receive full private pensions (normal retirement benefits)
(table 78). Workers who had to wait until age 65 for full ben-
efits usually did not have to satisfy a length-of-service require-
ment; however, some plans may require workers hired after
age 60 to complete at least 5 years of service.

When normal retirement was permitted prior to age 65,
however, plans generally imposed a minimum service require-
ment. For example, normal retirement at age 62 was available
tonearly one-third of pension participants but one-half of these
employees had to have worked 15 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 retirement
with full benefits were rare—covering 1 of 20 pension plan
participants,

Early retirement

Nearly all the full-time employees participating in defined
benefit pension plans could retire before normal retirement
age and receive an immediate, but reduced, pension (table 79).
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.

Early retirement benefit calculations are generally based on
the normal retirement formula. The benefit is then reduced by
a percentage (factor) for each year between the actual and nor-
mal retirement ages. If a plan’s normal retirement age is 62,
for example, and the reduction factor is 6 percent for every

> For a comprehensive analysis of formulas with Social Security integration
characteristics prior to the Tax Reform Act of 1986, see Donald Bell and Diane
Hill, “How Social Security Payments Affect Private Pensions,” Monthly Labor
Review, May 1984, pp. 15-20.



Chapter 7. Plan Administration

In addition to the data on individual benefit plans, the sur-
vey explored how insurance and retirement benefits were ad-
ministered 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 1992
small establishment survey (table 84), A large majority of par-
ticipants 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 single-employer plans; most of
the remaining participants were covered by State-mandated
temporary disability insurance benefit plans.” (State plans are
discussed in chapter 4.)

Multiemployer plans typically result from collective bargain-
ing agreements between employers within an industry or re-
lated 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 benefits
sponsored by multiemployer groups, and blue-collar and ser-
vice employees were the most likely recipients of such ben-
efits. Other benefits sponsored by multiemployer groups in-
cluded health care and sickness and accident insurance.

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

Plan financing
Generally, there were more participants in wholly employer-

financed plans than in partly employer-financed plans (table “:

85). Employee contributions were most often required for medi-
cal and dental care, particularly for family coverage. Just un-
der three-fourths of the medical and dental care plan partici-
pants were required to contribute toward the cost of family
coverage,

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

82

For almost all benefits, a greater percentage of blue-collar
workers than white-collar workers participated in wholly em-
ployer-financed plans, The exceptions were long-term disability
insurance plans, where wholly employer-financed plans were
more common for white-collar workers, and life 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 insur-
ance, 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-service medical plan and a health maintenance organiza-
tion, but plans in each benefit area are offered separately. In
recent years, new approaches to offering benefits have emerged.
BLS currently collects data on two such arrangements for of-
fering benefits—flexible benefits plans and reimbursement
accounts.

Full-time employees in small establishments rarely were
offered flexible benefits plans in 1992 (table 86). Such plans,
often called cafeteria plans, allow employees to design indi-
vidual 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 vary-
ing levels of life and long-term disability insurance, as well as
the option of purchasing extra days of vacation. Other options
offered included vision care benefits, sickness and accident
insurance, cash in lieu of benefits, or options to deposit un-
used credits in a 401(k) plan or reimbursement account.

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

Reimbursement accounts were offered to just over one-tenth
of full-time employees covered by the 1992 small establish-
ment survey. A greater proportion of white-collar than blue-
collar workers were eligible. These accounts, also called flex-
ible spending accounts, provide funds from which employees
pay for expenses not covered by their regular benefits pack-
age. Commonly, medical care reimbursement accounts could
be used to pay for deductibles, the employee’s coinsurance,



As was true with mental health care, plans were more re-
strictive in covering substance abuse treatment than other
illnesses.” Participants were four times more likely to have
inpatient detoxification treated the same as any other inpa-
tient confinement than to have inpatient rehabilitation cov-
ered the same as any other illness (36 percent and 9 percent,
respectively). Eight percent of the participants with alcohol-
ism treatment coverage had outpatient care treated the same
as other conditions.

Specific limitations for substance abuse treatment most com-
monly 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, ceilings
on out-of-pocket limits not applying to outpatient care, 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 at
acoinsurance rate of 50 percent. Dollar maximums were often
combined 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. For example, plans often limit
coverage to 30 days per year and to $50,000 per lifetime for
both alcohol and drug abuse treatment. Days and dollar limits
for alcohol and drug abuse treatment may also apply to mental
health care. For example, it is not uncommon for mental health
care and alcohol and drug abuse treatment to be subject to the
same lifetime dollar maximum.

Heaith 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 HMO’s—
physicians’ office visits, out-of-hospital prescription drugs, and
extended care facilities. For physicians’ office visits, 78 per-
cent of HMO participants were required to pay a copayment,
typically $5 or $10 per visit, before treatment was received.
Virtually all of the remaining participants received coverage
in full. In general, HMO’s did not limit the number of physi-
cians’ visits.

Out-of-hospital prescription drug benefits were available to
84 percent of HMO participants. Most of these workers had to
pay a copayment per prescription of $5 or more.

Finally, extended care treatment facility benefits were pro-
vided to 87 percent of HMO participants. Most commonly, the
number of days of coverage was limited; typical limits were
100 days per year.

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

2 For more detailed discussion of employer-provided substance abuse cover-
age, see Mare B. Kronson, “Substance Abuse Coverage Provided by Employer
Medical Plans,” Monthly Labor Review, April 1991, pp. 3-10. In addition, see
‘Substance Abuse Provisions in Employee Benefit Plans, Bulletin 2412 (Burean
of Labor Statistics, August 1992).

37

Other medical benefits

The 1992 survey measured the incidence of several other
services provided through medical care plans (table 53). For
example, 28 percent of medical care participants were in plans
that covered at least some of the costs for routine physical ex-
aminations, 37 percent had coverage for well-baby care, and
22 percent had incentives for child deliveries in lower cost
birthing centers rather than in hospitals. HMO’s nearly al-
ways included coverage for hearing care, physical examina-
tions, well-baby care, and immunizations and inoculations.
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

Just under one-half of full-time participants were required
to pay part of the cost for their individual medical coverage in
1992. Seven-tenths of participants shared in the cost for fam-
ily coverage (tables 54-56). Blue-collar workers were more
likely to have family coverage fully employer-financed than
white-collar workers. One-third of blue-collar workers had fam-
ily coverage paid in full by their employer, compared to one-
fifth for white-collar workers. There was very little difference
among occupational groups in the percentage of workers pro-
vided fully employer-financed individual medical coverage.

Data on the amount of an employee’s contributions for medi-
cal 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 reported, employee pre-
miums for individual and family coverage averaged $37 and
$151 a month, respectively.

Employee medical care premiums for individual coverage
showed considerable variation by type of plan. Sixty-two per-
cent of full-time participants in HMO’s were required to con-
tribute for single coverage compared to 44 percent for non-
HMO’s. Differences were less pronounced for family cover-
age. Under HMO’s, 77 percent of the participants were re-
quired to contribute towards family coverage, compared to 71
percent 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 con-
tributions for family coverage in HMO’s were $21 per month
higher than in non-HMO’s. Individual premiums were almost
$4 higher per month for HMO participants than for non-HMO
participants.

Of employees required to contribute toward the cost of their
medical care coverage in 1992, one-fifth could do so with pretax
dollars. These employees had the advantage of reducing their
taxable income while purchasing medical coverage. Pretax
contributions may be required or optional, and also may be
offered as part of a flexible benefits arrangement.

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



Employee Benefits in Small
Private Establishments, 1992

U.S. Department of Labor
Robert B. Reich, Secretary

Bureau of Labor Statistics

Katharine B. Abraham, Commissioner

May 1994

Bulletin 2441

For sale by the U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC. 20402-9328
ISBN 0-16-045026-8



Table A-5. Standard errors for table 22 -- Paid annua! sick T 6. ~
leave: Average number of days at full pay for full-time ane. “average nanber at done a fun pay oe fulltime
participants, small private establishments, 1992 participants by sickness and accident Insurance
Prof coordination, small private establishments, 1992 |
rofes- Blue-coltar |
ie All pat | ,cpncat, | andieciee | _ and Profes- Bius-coles i
em fica eee dlamicnmcns| service sional, | Clerical | Blue-collar
Participants erticipants tem an ante| technical, | and sales | _ and
participants Participe participants! ‘echnical, | and s service
and related!participants|, rc.
Paid annual sick leave Participants
pass ici After 1 year of service:
requirement: With sickness and
038 °° rd on accident insurance...) 0.2 03 02 03
ae 33 3 $s Without sickness and
“ 3 3 3S accident insurance 4 6 6 7
oe 100 od z After 3 years of servi
85 1.49 1.08 89 With sickness and
accident insurance... 3 & A 3
Without sickness and:
accident insurance...) 6 z 8 27
After 5 years of service: i
Table A-7. Standard errors for table 55 — Health care With sickness and
benefits: Average monthly contribution of full-time accident insurance ...| A 8 & 3
participants in contributory plans, small private Without sickness and !
establishments, 1992 accident Insurance... 6 8 2 8
After 10 years of service: |
Profes- Blue-collar yea
Type of o | Alper | cong | Clonee | “and With sickness and '
ype of coverag ticipants | and related|participants, _2e"¥ice accident insurance...) 7 1.6 14 4 |
participants participants Without sickness and
accident insurance . 7 rc) 1.0 1.0
All plane After 45 years of service:
Employee coverage si.21 | steo | $1.71 | $1.91
With sickness and
Family coverege .. 422) 824 | 707 | 784 wasceident neurance..|_ 4.0 20 14 A ;
ithout sickness and
Healih masnyenance accident insurance.) 1 1 12
Employee coverage 3.41 6.22 4.09 Attar 20 years of service:
Family coverage 12.24 23.80 | 16.62 With sickness and
accident insurance ...] 1.4 22 17 4
ogncheaith Without sickness and
organizations accident ineurance..| 1.0 1.8 12 18
Employae coverage . 1.99 1.91 1.88 2.10 After 25 years of service:
Family coverage 52 6.44 8.02 8.99 With eiokness and
aceldent ineurance 12 23 1.9 4
Without sickness and
accident insurance...) 1.2 14 15 18

100



Table 59. Dental care benefits: Percent of full-time participants in contributory stand-alone plans’ by type and amount of
employee contribution, small private establishments, 1992

sputh Employee Family but Employee Family
Type and amount of contribution coverage | coverage? ‘Type and amount of contribution covertge | poverage!
All participants Clerical and sates
Total 100 100 Total .. 100 100
Flat monthly amount 71 76 Fiat monthly amount .. 1 74
Less than $2.00 2 - Less than $2.00 3 -
$2.00-$4.99 32 1 $2.00-$4.99 22 1
$5.00-$9.99 10 4 $5.00-$9. 9 7
$10,00-$14.99 18 9 $10.00-$14.99 .. 26 8
$15.00-$10.99 1 1 $15.00-$19.99 (7) 4
$20.00-§24.99 3 18 $20.00-$24.99 6 23
- 22 $25.00 or greater - 27
4 3 Composite rate* 4 3
Amount varies by employee’ .. 2 12 |Amount varies by employee 2 14
‘Amount varies by earnings 1 1 |Amount varies by earnings 2 1
Not determinable 8 13 INot determinable 6 12
Protessional, technical, and related Blue-collar and service
Total . 100 100 Total 100 100
Flat monthly amount 63 76 Flat monthly amount 76 76
2 - Less than $2.00 1 -
29 1 $2.00-$4.99 47 2
18 6 $5.00-$9.99 ... 6 23
6 10 $10.00-$14.99 7 19
$15.00-$19.99 1 14 $16.00-$19.99 2 16
$20.00-$24.99 - 28 $20.00-$24,99 -" 2
- 16 $25.00 or greater - 2
6 3 Composite rate* 3 2
‘Amount varies by employee’ ... 27 12 |Amount varies by employee* 16 9
Amount varies by earnings .. 1 i) INot determinable 9 15
Not determinable . 8 "

* Plans that exclusively provide denta! benefits.

? If the amount of contribution varied by either size or composition of

family, the rate for an employee with a spouse and one child was used.

For a small percentage of employees, the employee contributes the same

amount for single and family coverage.
® Less than 0.5 percent.

* A composite rate is a set contribution covering more than one benefit

60

area, for example, health care and sickness and accident insurance. Cost

data for individual plans cannot be determined.

° Amount varies by options selected under a “cafeteria plan” or em-

ployer-sponsored reimbursement account.

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



Table 39. 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,
smail private establishments, 1992

Profes-
sional, | Clerical |Blue-col-
All par-| techni- | and | tar and
Dollar amount’ ticipants| 2! and] sales | service
r partici- | partici-
partici- | pants | pants
pants
Total 100 j 100 | 100
Plan specifies annual deductible and|
out-of-pocket maximum? , 81 82 84 7
$300-$499 . 2 2 2 2
$500 8 8 8 7
$501-$599 0 1 1 ro)
$600 8 9 9 8
$601-$99 12 10 10 14
$1,000 6 7 7 6
$1,001-$1,099 iv) iv) e is)
$1,100 . 5 5 5 8
$1,101-$1,499. 15 15 14 15
$1,500-$1,699 5 6 6 5
$1,700-§2,099 6 4 6 6
$2,100 and greater "1 14 14 8
Based on earnings 6 0 1 e
Plan does not specify maximum
annual out-of-pocket expense or
annual deductible .. 19 18 16 23

* Total amount of deductible and out-of-pocket maximum is for each in-
‘sured person. in some plans, the individual and family deductibles are

identical.

* Under federally qualified HMO’s, there is a fimit 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.

46



the sample of occupations from the i* establishment;
fl, = weight adjustment factor for nonresponse for the i*
establishment;
£2, = 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 de-
sired.

Reliability of estimates

The statistics in this bulletin are estimates derived from a
sample of 7,830 usable occupation quotes selected from the
2,491 responding establishments, rather than tabulations based
on data from all employees in the approximately 4.6 million
small establishments within scope of the survey. Consequently,
the data are subject to sampling errors, as well as nonsampling
exrors.

Sampling errors are the differences that can arise between
results derived from a sample and those computed from obser-
vations of all units in the population being studied. When prob-
ability techniques are used to select a sample, as in the Em-
ployee 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 following
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 standard error
above would include the population’s value for 68 percent of
the samples. Confidence rises to 90 percent 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.

Chart A-1 provides standard errors for use in evaluating
the estimates in the 111 tables shown in chapters 1-9 of this
bulletin containing percentage estimates. For example, table 1
shows that 53 percent of all full-time employees participated
in sick leave plans in 1992. Chart A-1 shows a standard error
of approximately 2.75 percent for this estimate. Thus, at the
95-percent level, the confidence interval for this estimate is
47.5 percent to 58.5 percent (53 percent plus and minus 2
times 2.75 percent).

Standard errors for tables 6, 12, 22, 23, and 55 could not be
generalized into graphic representation. They are presented
as tables A-3, A-4, A-5, A-6, and A-7. For example, the first
entry in table 22 shows an average of 7.7 days of paid annual
sick leave after one year of service. The standard error for this
estimate is 0.32 days.

Standard errors cannot be computed for tables 58 and 69.
The rates shown in these tables are projections based on mod-
els of the plan provisions.

95

Nonsampling errors also affect survey results. They can be
attributed to many sources: Inability to obtain information about
all establishments in the sample; definitional difficulties; dif-
ferences in the interpretation of questions; inability or unwill-
ingness of respondents to provide correct information; mis-
takes in recording or coding the data; and other errors of col-
lection, response, processing, coverage, and estimation for
missing data,

Through the use of computer edits of the data and profes-
sional review of both individual and summarized data, efforts
are made to reduce the nonsampling errors in recording, cod-
ing, 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 devel-
opment of estimates, Because the effect of these limitations on
the EBS estimates is unknown, reliability measurements are
incomplete.

For those readers interested in further mathematical details,
the next section describes how chart A-1 was derived from
1992 survey data.

Mathematical details on estimates and generalized
standard errors chart

Each estimator used in the production of the tables in this
bulletin is approximately normally distributed.

Standard errors for the percentage estimates were computed
from a representative portion of the 1992 survey estimates us-
ing methodology called “balanced repeated replication”. Esti-
mates are produced for each of 64 half-sample replicates, and
the variability or standard error is calculated from the 64 half-
sample estimates. To simplify their presentation, a curve was
fitted to the standard error estimates, by regression techniques
(chart A-1).

The curve’s equation is:

[a+b{in(P)}’ +cln(P)+aP|

where: S—
S=R
S = standard error
P= percentage estimate from the bulletin
e = exponential function
In = natural logarithm function.

For the 1992 Employee Benefits Survey:
a=-0.6824, b = -0.0237 c = -0.2883, and d = -0.0142.

These are regression coefficients. The curve fits the data
with R? = 0.8473 and no definite pattern in the residuals.

The equation of the curve was obtained empirically, by start-
ing with the equation:

S =a P*(100- P).



Table 22. Pald annual sick leave: Average number of days
at full pay for full-time participants, small private
estabishments, 1992

Table 23, Paid annual sick leave:' Average number of days
at full pay for full-time participants by sickness and accident
Insurance coordination, small private establishments, 1992

Protes-

techni- | and | lar and

sional, | Clerical |Biue-col- sional, | Clerical |Biue-col-

techni- | and | lar and

i All par- All par-
Sick leave policy All cal, and| sales | service Sick leave policy ‘ponte| Cal, and| sales | service
Ueipants | related | pattici- | partici Ycipants| related | partic- | partie
partic | pants | pants partici- | pants | pants
Pants pants:
Paid annual sick leave days’ by Sick leave days by minimum
minimum length-of-service length-of-service requirement®
Tequirement:
77 a7 64 After’ 1 year of service:
a4] 94 68
94{ 10.1 72 With sickness and accident
10.2] 11.4 78 insurance .. 66| 72; es] 60
109} 122 82 Without sickness and
116] 128 a5 ‘accident insurance .. 83; 92; 90] 67

120] 132] 142] e6

* Employees are either granted a specific number of days after comple-
tion of the indicated length of service, or accrue days during the next 12-
month period. The total number of days are assumed availabla for use
immediately upon completion of the described length-of-service interval.

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

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

After 3 years of service:

With sickness and accident
insurance ..
Without sickness and
accident insuranc

7o| 80| 73} 62
a4 99! 10.2 72

After 5 years of service:

With sickness and accident
insurance |

Without sickness and
accident insurance ...

75 87 79 63

99} 10.7] 11.2 WW

After 10 years of service:

With sickness and accident
insurance ... .

Without sickness and
accident insurance

"63; 10.2 9.2 65

Wa} 11.8) 128 84

After 18 years of service:

With sickness and accident
insurance
Without sicl
accident insurance

B89] 11.0 99 68

119! 126] 138 9.0

After 20 years of service:

With sickness and accident
insurance
Without sickness and
accident insurance

9.2 WA? 10.4 66

126 133 14.9 95

After 25 years of service:*

With sickness and accident
insurance "

Without sickness and
accident insurance

9.4 12.0 10.8 66

13.2 13.6 15.8 a7

* Paid sick leave plans with a specified number of days available each
year.

* Employees are either granted a specific number of days after compie-
tion of the indicated length of service, or accrue days during the next 12-
month period. The total number of days are assumed available for use
immediately upon completion of the described length-of-service interval.

* 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.

20



Chapter 3. Disability Benefits

This chapter discusses three types of disability benefits: Sick
leave, sickness and accident insurance, and long-term disabil-
ity insurance.

Paid sick leave and sickness and accident insurance pro-
vide protection against loss of income during temporary
absences from work due to illness or accident.

¢ During more extended periods of disability, income may be
continued through long-term disability insurance plans.

Short-term disability protection through sick leave, sick-
ness and accident insurance, or both, was provided to three-
fifths of all full-time employees in small establishments in 1992
(table 19). Sick leave usually provides 100 percent of the
worker’s normal earnings, whereas sickness and accident in-
surance usually replaces 50 to 67 percent of pay.

Sick leave was provided to just over half the full-time em-
ployees and sickness and accident insurance to one-fourth.
About an eighth of all employees had sick leave plans coordi-
nated with sickness and accident insurance. 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 re-
duced by the amount of the insurance benefits so that the total
benefit does not exceed full salary.

Regardless of the method of coordination, employers offer-
ing sickness and accident insurance tended to allow fewer sick
leave days than those without such insurance. At 5 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 9.9 days.

Long-term disability insurance (LTD), which typically pays
60 percent of earnings, was provided to nearly one-fourth of
the full-time employees in small establishments in 1992. LTD
insurance payments usually begin after 3 or 6 months of dis-
ability and continue until retirement age or for a specified num-
ber 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 slightly more prevalent among blue-collar
workers.

Paid sick leave

Of the employees covered by paid sick leave plans, four-
fifths were allowed a fixed number of days per year (annual
sick leave plans). The remainder were covered by either per
disability benefits (benefits provided for each illness) or were

16

provided sick leave on an “as needed” basis. Plans providing
both an annual and per disability benefit were rare (tables 20-
25), Employees receiving annual plans averaged 7.7 days at 1
year, 9.1 days at 5 years, 10.9 days at 15 years, and 12.0 days
at 25 years.

About two-fifths of the employees covered by annual sick
leave plans were allowed to carry over and accumulate unused
sick leave from year to year (cumulative plans). 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, typi-
cally between 10 and 100 days. The remaining workers in cu-
mulative plans were allowed to accumulate: an unlimited
amount of sick leave.

Workers were often not immediately eligible for sick leave
benefits. Slightly over one-half of employees had to meet Tength
of service requirements before qualifying for sick leave ben-
efits. 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, most workers could
use their benefits for other reasons. For example, using sick
leave to take care of a sick child or to take care of personal
business 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, protecting them
against income losses due to short-term disabilities. Two-thirds
of the participants had their benefits fully paid by their em-
ployer. The remainder most often paid a percent of earnings,
up to a specified maximum contribution’ (tables 26-28).

Benefit payments under sickness and accident insurance
plans were either a percent of employee earnings or a flat dol-
lar 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
limit on the dollar amount of the weekly benefit.

Blue-collar workers were the most frequent recipients of
scheduled dollar benefits, which provided either a fixed weekly
amount or weekly benefits that varied by earnings, service, or

® The prevalence of such contribution formolas is influenced in large part by
the mandatory sickness and accident insurance plans in New York and New Jer-
sey, discussed later in this chapter.



Table A-4:. Standard errors for table 12 --
service and cash-In/carryover provisions,

Table A-3. Standard errors for table 6 ~ Pald holidays and
vacations: Average number of days for full-time
participants, small private establishments, 1992

Profes-
A par- |, sional | Clerical Blue collar
Item fpeats | technica, | and sales | tice
and related] partcipants| ticipants
iparticipants| ipar
Paid holidays 0,20 032 0.28 0.28
Paid vacation by minimum
ength of service
12 25 a7 13
13 ‘24 ‘22 13
16 27 ‘22 20
a1 ‘37 28 25
Ater 15 years 24 38 ‘30 28
After 20 years 25 38 33 32
After 25 years 25 ‘38 ‘33 32
After 30 years 24 38 33 33

Pald vacations: Average number of days for full-time participants by length of
small private establishments, 1992

Vacation days by Cash-in, caryover, Cash-in and No cash-in or
sis engin af All plans om Carryover only Cash-in only serryover ayer

0.12 0.24 0.32 0.26 0.98 0.12

13 Bt) 4 18 93 AS

16 2B 37 26 88 16

After 10 years .. Ea 82 81 43 88 23
After 15 yaars .. 24 38 58 48 1.00 24
After 20 years .. 25 40 85 ci 1.00 27
After 25 years .. 25 AO 86 54 1.01 27
After 30 yeart 124 40 86 54 1.02 26

days.

NOTE: Computations of average excluded workers with zero vacation



Table 29. Long-term disabiilty Insurance: Pere

establishments, 1992—Continued

ent of full-time participants by method of determining payment, small private

‘Type of maximum provision
Method Total With maximum Without maximum
coverage Plan maximum | Disabliiy income |Plan and disability) coverage
only’ maximum only’ | income maximum
Clerical and sales
All methods 100 94 53 3 38 6
Fixed percent of earnings .. 96 ot 51 3 37 4
Less than 50 percent v) iv) i) a
7 6 2 1 2 1
3 3 - - 3 -
61 59 38 1 20 2
20 19 10 - 10 )
4 3 1 - 3 1
1 1 1 - (9) -
Percent varies by earnings .. 3 2 2 - iv) i)
Percent varies by service iv) 0) i) i) - i)
Percent varies during disability ... ie) - - - - iv)
‘Scheduled dollar amount varies by
earnings 1 - - - - 1
Blue-collar and service
All methods ... 100 70 31 2 38 30
Fixed percent of earnings 78 66 27 2 38 12
Less than 50 percent .. 1 1 - - 1 -
50 percent 6 G 2 1 3 a)
55 percent .... iy) eo ~ - is) 0)
60 percent 87 45 7 1 28 42
65 or 67 percent . 11 n 6 5
70 percent 2 2 2 1 -
Other percent rs) ) - - i) -
Percent varies by earnings ... 19 4 4 - Q 15
‘Scheduled dollar amount varies by
earnings 0 - - - - 0
Other 2 - - - - 2

* Includes flat dollar maximums and dollar maximums that vary by

years of service,

‘ Includes flat dollar amounts and scheduled percent of earings
varying by length of disability.

? 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.
® 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.

28



Table 49. Medical care benefits: Percent of full-time participants in plans with mental health benefits by extent of

benefits, small private establishments, 1992

‘ci Professional, technical, Clerical and sales Blue-coltar
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?
100 100 100 100 100 100 100 100
With coverage 98 7 98 98 98 96 97 7
Covered the same as other
illnesses 15 1 16 4 15 1 14 1
Subject to separate limitations‘... 83 96 81 97 84 95 83 95
48 34 48 35 47 27 49 32
43 30 44 35 4 26 44 32
Per confinement 4 6 4 - 5 iv) 4 iv)
Per lifetime 2 3 0 3 1 2 oO
Limit on number of
treatments .. 1 i) 1 0 2 o 1 0
Limit on dollars 50 cc 48 7 54 7 48 72
Per day . 1 26 () 26 1 24 1 28
Per year 7 55 15 53 7 80 7 51
Per lifetime 43 40 42 43 48 4 40 37
Per other period 2 1 1 1 1 1 2 2
Coinsurance timit 13 6t 1 61 12 63 15 60
50 percent 7 54 5 82 7 54 8 56
Other? 6 7 5 9 5 9 7 5
Ceiling on out-of-pocket
‘expenses does not apply... 22 49 22 50 22 51 22 48
Separate copayment or
deductible .. 1 "1 1 13 1 10 1 12
Other limitations .. 6 o o - 1 ) io) -
Without coverage 2 3 2 2 2 4 3 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, doctor's office care was tabulated,

* Includes all workers with some type of mental health care cover-

age.

* 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

52

days per year, that plan contains separate limits. ‘The total is less than
the sum of the Individual items because many plans had more than
‘one type of limitation on mantal 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 71. Life Insurance: Percent of full-time participants
with accidental death and dismemberment insurance by
amount of benefit,'small private establishments, 1992

Table 72. 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
private establishments, 1992

Profes-
sional, | Clerical /Blue-cot Profes-
Altar. | techni: | and | lar and sional, | Clericat |Blue-col-
Item ticipants | 8) and| sales | service ‘All pare | techni | and | tar and
pants) related | partici- | partici item ficipante|°) and] sales service
partici- | pants | pants ipants | related | partici | partici-
Pants partici- | pants | pants
Pants
Total 100 100 100 100

‘Multiple of life insurance benefit

Multiple of earning:

100 | 100 | 100 | 100

95 96 96 95 With supplemental benefits ..... 50 48 53 48
9, 9% 9 9 Without supplemental benefits e 62 46 52
Data not available .. 0 1 ¢
a}o/o) 6 97° »
1 0 1 1 Flat amount ... 100 | 100 | 100 | 100
Flat amount .. 4 3 3 4 With supplemental benefits .....| 19 27 21 16
Without supptemental benefits| 79 71 78 83
Multiple of earnings 1 1 1 1 Data not available 2 2 1 2

Other ..

ofa] sie

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

* 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, Life Insurance: Percent of full-time participants
by length-of-service requirements for participation,’ small

Private establishments, 1992

Profes-
sional, | Clerical /Blue-col-
‘All par- | techni- | and | tar and
Length-of-service requirement ticipants cal, and| sales | service
related | partici. | partici
partici | pants | pants
pants
Total .. 100 | 100 | 100 | 100
With service requirement . 39 35 go} 42
14 16 16 13
4 4 2 4
16 12 15 18
1 ® 2 1
3 1 3 4
1 2 1 1
Without service requirement .... 24 28 ar 20
Service requirement not
determinable... 36 37 4 98
Not applicable - plan not
available to new employees ic) - - i)

* Length of time employees must be on the job before they are cov-
ered by @ plan that is at least partially employer financed. There is fre-
quently an administrative time tag 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.

70



Table 26. Sickness and aceldent i
private establishm:

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

Maximum weeks of coverage
Type of t Total
peer Peymen ° Tota [Hessian] 3 | 1405 | 26 | ars | 52 rates | Varies by
All participants
All types .. 100 100 4 18 4 70 1 3 1 2
Fixed percent of earnings 73 73 2 9 3 56 iy) 2 1 1
Less than 50 iV) i) ~ - - iV) 0 ~ - ~
5 35 35 v) 1 Y 32 - 0) - 0)
1 1 - iv) - iV) ~ - ~ ~
16 16 1 6 1 5 Qo 1 0) 0
ol¢i gaye yey eye yale
7 7 ” 1 ) at - ) 0 Q
3 3 - ie) 1 2 - 1 - Q)
) Q i) Qo ) QO - - - 1)
") iv) - QO Y) Vv] - ~ -
1 1 - - 10) y - - - Y
Percent of eamings varies 2 2 Y 1 - - 1)
By service ... 1 1 10) - - - - -
By length of disability .. 1 1 ~ 1 - - - - - -
By bo both service and length of
disability Y 1) > - 0) - - - iv)
Q ) - - - oO - ~ - -
Fixed weekly dollar benefit 23 23 2 5 1 13 1 1 0) )
Less than $100 7 7 2 3 t) 2 10) ) 0 ~
$100-$124 6 6 - 1 0) 4 ~ - iv) 0)
$125-$149 2 2 - ” QO 1 0 - - =
$150-$174 3 3 - 0) oO 2 - 9) - iv)
$175-$199 2 2 - = - 2 - O - -
$200-$224 3 3 - Qo - 2 0 9] - -
$225 or mi 1 1 - 0 - iv) - iv) - -
Weekly doliar benefit varies 1 1 (¥) - V) (y iV) iv) -
By eamings .. 1 1 - VW) - oO c] 0 - -
By service or ” 0 - - - 0 0 - oO -
Professional, technical, and
rel
All types 100 400 4 7 10 64 1 4 1 v)
Fixed percent of earning: 83 3 12 9 54 ) 3 1 (0)
50 33 2 iu) 1 30 - (0) - -
2 - 1 - oy - - -
7 2 7 2 6 - - 1 ry
2 - - 2 0) - - -
1 - - - 1 ~ - -
18 iv) 4 - 14 YO - Y
7 =. 0) 3 2 3 - -
8) i}. ) 8]: 2 fi] t
2 - - 2 0 - - - -

See footnotes at end of table.

22



Table 88. Summary: Percent of full-time employees participating’ in selected employee benefit programs, small

Independent businesses,’ 1992

Profes- Profes-
sional, | Gyericai| Blue sional, | syericai| Ble
‘Alt em-| tochni- | PMCS) conar techni. | Clerical) cottar
om-| "cal, | 294 | and Allem-| a | and | ora
Employee benefit program Poy. and te- aes | sanice Employee benefit program Ploy | an ter sale, | eonice
lated |e” |employ- lated /°OES” jemploy-
lemploy- ees? lemploy-| eos*
‘cos?
Paid: [Dental insurance—Continued
Holidays 79 | 94] 989 | 69 |) Family coverage:
Vacations es} 94} 94) 7B Wholly employer financed 9 8 9] 10
Personal leave | 19] 16 6 Partly employer financed 18 | 2 | 19 9
Lunch period 9| a3] 10 8
Rest time .. 48 | 43 | 41 | 59 j/Life insurance 54} 70] 62) 45
Funeral leat go} 61 | 44] 34 ‘Wholly employer financed 45} 61 | 53 | 37
Jury duty leave 48) 70) 54] 38 Partly employer financed 9 9| io 8
Military leave 14 | 2) 1] 10
Sick leave 45 | 70 | 63 | 29 |[Allretirement* 34] 43} 37] 30
Maternity leave 2 4 2 1
Paternity leave iv) 1] © ( |[Defined benefit pension .... 12 9 10 13
Wholly employer financed " 9 e| 43
Unpaid: Partly employer financed 1 1 1 (e)
Maternity leave | 2) | 13
Paternity leave 7| 13 6 6 ||Defined contribution® 27; 40} 30] at

Sickness and accident insurance 24 23 27 24

Wholly employer financed ..

Partly employer financed 10 7| 1] 10
Long-term disability insurance 13 | 33 | 17 4
Wholly employer financed .. 2} 31} 16 4
Partly employer financed 1 2 2/0
Medical care ... 64] 79 | 74] 56
Employee coverage:
Wholly employer financed . se} 45 | 44 | 33
Partly employer financed 26; 33} 30 | 22
Family coverage:
Wholly employer financed .. 19] 16 | 20) 18
Partly employer financed 46] 62] 54] 97
Dental care 24} a2] a7] 49

Employee coverag:
‘Wholly employer financed
Partly employer financed

16 22 16 14
8 u 1 5

Uses of funds:

Retirement” 37 29 20

25
Wholly employer financed* wt] 22] 19] 15
Partly employer finance, a] 15] 10 5
Capital accumulation” 2 4 1 2
Wholly employer financed” 1 1 fe) 1
Partly employer financed 1 3 1 1
Types of plans:
‘Savings and thrift 8] 16 9 4
Deferred profit sharing 1 | iw] 13
Employee stock ownership rv) e) 6 1
Money purchase pension 5 9 5 4
Simplified employee pension 1 2 1 1
{Stock option iy) - - | 6
[Stock purchase ... 0 iv) iv) -
[Cash only profit-sharing i) - - | @
Flexible benefits plans .. o!/o!]6 -
[Reimbursement accounts .. 6) 12 6 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
@ 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.

® See appendix A for definitions of the occupational groups.

* 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 trom service, age 59 1/2, or hardship.

° Employees participating in two or more plans were counted as par-
ticipants in wholly employer-financad plans only if all plans were noncon-
tributory. -

* Includes plans in which emptoyer contributions may be withdrawn
from participant's account prior to retirement age, death, disability, sepa-
ration from service, age §9 1/2, or hardship. Excludes pure cash profit
sharing, stock option, and stock purchase plans.

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

88



* White-collar participants more commonly were covered by
plans with earnings-based formulas, and more commonly
had benefits coordinated with Social Security;

* Common eligibility requirements for a normal, or unreduced,
pension were: Age 65 with no specified length of service
and age 62 with 15 or more years of service;

* 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 postretirement increases to retirees during the
previous 5 years.

Flexible benefits plans and reimbursement
accounts

Benefits may be provided to employees independently, or as
part of a package, complete with options, known as a flexible
benefits or cafeteria plan. Such plans were rarely found for
full-time workers in the 1992 small establishment survey. Caf-
eteria arrangements give employees the opportunity to choose
between several benefits, such as medical care, life insurance,
and vacation days, and between several different plans within
a given benefit.

Employer-sponsored reimbursement accounts were avail-
able to nearly 14 percent of full-time workers in 1992. These
accounts provide funds for employees to pay for expenses
not covered by existing benefit plans, such as child-care ex-
penses and medical care deductibles. Accounts may include
employer funds, employee funds contributed on a pretax basis,
or both.

Other benefits

In addition to the major benefits just described, the survey
provided estimates of the incidence of 15 other benefits. These
data show the percent of workers eligible for a specific ben-
efit, but not the proportion of employees actually taking ad-
vantage of the benefit.

Educational assistance provides full or partial reimbursement
of employee expenses for books, tuition, and fees. Thirty-six
percent of full-time employees were eligible for job-related edu-
cational assistance; 5 percent were eligible for non-job-related
educational assistance.

Nonproduction cash bonuses were available to just under
one-half of full-time employees. Such bonuses were slightly

more prevalent for white-collar than blue-collar workers.

Two employer-subsidized health promotion services—
wellness programs and employee assistance programs—were
surveyed in 1992. Employee wellness programs were offered
to less than one-tenth of full-time employees. These programs
offered structured, separate plans (that is, independent of medi-
cal care benefits), such as exercise and physical fitness pro-
grams, weight control clinics, smoking-cessation programs,
and stress management courses, to develop and maintain
healthy lifestyles.

Employee assistance programs were available to 17 percent
of full-time workers and provided employee referral and coun-
seling services concerning such problems as alcoholism, drug
abuse, and emotional difficulties. Employee assistance pro-
grams are related to employee wellness programs and typi-
cally deal with more serious personal problems than the es-
sentially preventive medical issues addressed by wellness pro-
grams, An additional health-related benefit, in-house in-
firmaries, was rarely reported.

Several family-related benefits were studied, although few
workers were eligible for coverage. Long-term care insurance,
often purchased with employee funds at group rates, covers
extended home health care or nursing home stays, and may be
available for employees, spouses, or other relatives, Child-care
benefits include employer-subsidized facilities or full or par-
tial reimbursement to employees for the cost of care in nurser-
ies, daycare centers, or by baby-sitters.> Eldercare includes
employer subsidies for daycare for elderly or disabled depen-
dents, or time off for employees to handle such matters.§ Adop-
tion assistance, in the form of help to pay the legal expenses
associated with adopting a child, was also available.

The incidence of several benefits differed markedly by em-
ployee group. Among these were travel accident insurance,
for which a larger proportion of professional and technical
employees were covered. This may be partly due to the greater
likelihood of travel among professional workers than among
the other groups. Severance pay was also more frequently avail-
able to white-collar employees.

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

© See chapter 7, Plan Administration, for information on reimbursement ac-
counts, an alternative means of subsidizing dependent care expenses.



Chapter 6. Defined Benefit Pension
and Defined Contribution Plans

Forty-seven percent of full-time employees in the small es-
tablishment survey had retirement and capital accumulation
plans in 1992 through defined benefit or defined contribution
plans (table 74). Defined benefit pension plans use predeter-
mined formulas to calculate a retirement benefit, and obligate
the employer to provide those benefits. Benefits generally are
based on salary, years of service, or both.

Defined contribution plans typically specify the level of
employer and employee contributions to a plan, but not the
formula for determining eventual benefits as in a defined ben-
efit pension plan. Instead, individual accounts are set up for
participants, and benefits are based on amounts credited to
these accounts, plus investment earnings. The risk of fluctua-
tion in investment eamings, however, is borne by the employee.

In the Bureau’s second survey of smail establishments, ma-
jor findings include:

« Defined contribution plans were the most prevalent retire-
ment and capital accumulation vehicle, covering one-third
of the full-time employees; defined benefit pension plans
covered one-fifth of the full-time employees;

¢ Most participants in retirement and capital accumulation
plans were enrolled in only one plan; participants in sav-
ings and thrift plans were most likely to haye another
retirement or capital accumulation plan available to them
(table 75);

« Approximately 9 of 10 defined contribution plans were used
for retirement purposes; the most commonly available
plans were deferred profit-sharing and savings and thrift
plans;

¢ The most often used method of computing defined benefit
pension plans was a terminal earnings formula, which
based benefits on average earnings during the last few
years before retirement;

» Three-fourths of pension plan participants could retire at
age 55 or earlier, although typically with benefits reduced
to account for receipt of benefit payments over a longer
period of time;

« Nearly one-fourth of the full-time employees were covered
bya 401(k) plan, usually in the form ofa salary reduction
plan.

Defined Benefit Pension Plans

In 1992, one-fifth of full-time employees in small establish-
ments—approximately 7 million employees—participated in

71

defined benefit pension plans. Full-time employees in small
establishments 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 76). Such formulas pay a flat percent of the employee’s
annual earnings per year of service (for example, 1.5 percent
of earnings times 30 years of service, or 45 percent of annual
earnings), or a percent that varies by service, earnings, or age.

While earnings-based formulas are widespread, variations
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 average 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 77). Such formulas usually designated the 5 consecutive
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 1.63 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. A career-
earnings formula might credit an employee with 1 percent of
earnings up to the first $12,000 in each year of service plus
1.5 percent of the earnings exceeding that amount. The an-
nual pension payment equals the sum of these credits. Where
career-earnings formulas specified a flat percent for each year
of service, the average was 1.51 percent.

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

Plans that did not use a percent-of-earnings benefit formula
often 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



efit pension benefits and may begin receiving benefits years
later. Vested benefits under such defined contribution plans as
profit-sharing and savings and thrift plans, however, are usu-
ally paid in a lump sum at employment termination.

All defined benefit pension and defined contribution plan
participants are subject to the same vesting rules under the
Employee Retirement Income Security Act. Vesting schedules
vary significantly, however, between defined benefit and de-
fined contribution plans, and variations are also common be-
tween individual types of defined contribution plans. All vest-
ing schedules apply to employer contributions; employee con-
tributions (including pretax contributions) are always 100-per-
cent vested,

Immediate full vesting, a feature often provided in defined
contribution plans but rarely found in defined benefit plans,
was available to 3 of 10 savings and thrift plan participants
and 1 of 10 deferred profit-sharing plan participants (table 83).

Graduated vesting, where the percentage of an employee’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. Nearly
one-half of the savings and thrift plan participants and eight-
tenths of the deferred profit-sharing plan participants were
covered by such a provision. Just under one-fifth of the de-
fined benefit pension participants were subject to graduated
vesting schedules.

71

“Cliff” vesting, where no vesting occurs until an employee
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. A large majority of participants in defined ben-
efit and defined contribution plans subject to cliff vesting were
fully vested after reaching 5 years of service.

For terminated and vested employees who wish to receive 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 reduced amount de-
termined by the life expectancy at the age that pension pay-
ments 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 re-
tirement, the same factor was used in plans covering most par-
ticipants with early retirement provisions. Where reductions
differed, it was most common to provide actuarial reductions
to deferred vested benefits, eliminating the subsidy employers
provide to employees choosing early retirement.*

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



Contents—Continued

Tables—continued
Page
33. Length-of-service requirements for participation 31
Medical care:
34. Coverage for selected categories of care .. 41
35. Fee arrangement and financial intermediary 43
36. Overall limitations—amount of deductible 44
37. Overall limitations—coinsurance .... 44
38. Overall limitations—out-of-pocket expense limits 45
39. Overall limitations—sum of total annual deductible and maximum
out-of-pocket expense limits .... 46
40. Overall limitations—maximum benefit provisions 47
41. Hospital room and board coverage by type of benefit payments .. 48
42. Hospital room and board coverage by copayment requirement and type
of plan .... 48
43. In-hospital surgical coverage by type of benefit payments ....... 49
44, In-hospital surgical coverage by comparison with outpatient surgical
coverage, by type of medical care provider ..... 49
45, Managed care benefit provisions... 50
46. Selected cost containment features 50
47. Second surgical opinion provisions 51
48. Preferred provider organization plan provisions of care and
comparison with traditional fee-for-service plans .. SI
49. Mental health benefits by extent of benefits 52
50. Substance abuse treatment benefits 353
51. Alcohol abuse treatment benefits by extent of bene: 53
52. Dmug abuse treatment benefits by extent of benefits 54
53. Coverage for selected special benefits ... 55
54. Contributory plans by type and amount of employee contribution .. 56
55. Average monthly contribution for employee and family coverage 58
56. Contributory status by type of plan 58
57. Employer-financed coverage after retirement..... 59
58. Health care expenses paid by the individual and the plan for selected
services, by type of plan..... 59
Dental care:
59. Contributory stand-alone dental plans by type and amount of employee
contribution .......... 60
60. Extent of coverage for selected procedure: 61
61. Deductible provision ...... 63
62. Yearly maximum amount of insurance. 63
63. Orthodontic benefits by lifetime maximum amount of coverage 63
64. Dental preauthorization requirements...... 63
Vision care:
65. Vision benefits by coverage for selected services ....... 64

viii



ignated price (stock option plans) also were rare. Savings and
thrift plans, money purchase pension plans, and profit-shar-
ing plans were more common among white-collar workers than
blue-collar workers.

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

Cash or deferred arrangements

Plans with a cash or deferred arrangement (CODAs), com-
monly referred to as 401(k) plans, covered 24 percent of the
full-time employees in the 1992 small establishment survey
(table 82), up considerably from the 17 percent participation
rate reported in 1990. These arrangements, which allow
participants to choose between receiving currently taxable in-
come or deferring taxation by placing the money in a retire-
ment account, have played a major role in developing retire-
ment income vehicles in recent years. Nearly all cash or de-
ferred arrangements found in the 1992 survey took the form of
salary reduction plans; other 401(k) plans included deferrals
of profit-sharing allocations and mandatory regular contribu-
tions 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 income taxes
on those contributions and their earnings until they are with-
drawn from the plan, Such contributions are referred to as
“employee elective deferrals” or “pretax contributions.”

Deferrals of profit-sharing allocations provide employees
with the choice of receiving an employer’s profit-sharing con-
tribution 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 prevalent among white-col-
Jar employees than among blue-collar employees, were avail-
able through several types of defined contribution plans, The
most frequently observed vehicle for pretax savings was a sav-
ings and thrift plan, accounting for just over one-half of par-
ticipants. The remainder generally could make salary reduc-
tion contributions through a deferred profit-sharing plan or a
freestanding plan, that is, a plan set up for employee salary
reduction with no employer contribution.

41 A money purchase pension plan provides for a pension annuity or other
form of retirement income that is determined by fixed contribution rates plus earn-
ings 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, Employee stock ownership plans are generally
wholly employer financed, and are designed to distribute company stock periodi-
cally to employees. Simplified employee pension plans are arrangements under
which establishments with 25 or fewer employees set up employer-financed ac-
counts, similar to individual retirement accounts (IRAs), for eligible employees.
Employees may elect to make voluntary contributions. Savings and thrift and
profit-sharing plans are described later in this chapter.

2 For 401(k) plans with no employer contributions, participants were those
workers actually 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.

75

From a different perspective, three-fifths of all participants
in defined contribution plans could make voluntary salary re-
duction contributions to their plan. Nearly all participants in
savings and thrift plans could make such contributions, but
only one-fourth of those in deferred profit-sharing plans had
this option.

Savings and thrift plans

Savings and thrift plans covered 1 in 7 full-time employees
in small private establishments. Under these plans, employees
contribute a predetermined portion of earnings to an account,
all or part of which is matched by the employer. Contributions
are invested in various vehicles, such as stocks, bonds, and
money market funds, as directed by the employee or employer,
depending upon the provisions of the plan. Although usually
designed as a long-term savings vehicle, savings and thrift
plans may allow withdrawals for specified conditions (such as
medical and educational expenses) and may allow participants
to borrow funds from their account. Withdrawals are taxable
as current income to the recipient, and may be subject to a

penalty imposed by the plan,

Employee contributions. Savings and thrift plans allow em-
ployees to choose from a range of possible contribution rates.
A plan, for example, might allow maximum employee contri-
butions anywhere from 6 to 20 percent of pay. The most com-
monly allowed maximums in small establishments were 10,
15, and 16 percent,

Virtually all participants in saving and thrift plans found in
small establishments were allowed to make pretax contribu-
tions. However, the provisions governing pretax contributions
varied widely. For example, most participants in plans allowing
pretax contributions could make only pretax contributions,
others had an option to make either pretax or posttax contri-
butions, 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 be-
cause pretax contributions may not be withdrawn from-an
employee’s account, except in limited circumstances, without
severe tax penalties,

Employer-matching contributions. Employers give incentives
for participating in a savings and thrift plan by matching all
or a portion of the employee’s contributions and adding this
amount to the employee’s account. Usually the employer
matches a portion of the employee’s contributions up to a speci-
fied percent of the employee’s earnings. The most frequently
observed provision found in small establishments in 1992 was
for an employer to match half of the employee's contribution
up to the first 6 percent of earnings. Assuming the employee
contributed 7 percent of earnings, the employer would add 3
percent (half of the first 6 percent of the employee’s earnings)
for a total contribution of 10 percent to the employee's ac-
count. In contrast with these straight percentage matches, ap-
proximately one-fourth of the participants received matching



Appendix B: Availability of the Survey’s Data Base

The tables published in this bulletin present the major find-
ings of the employee benefits survey in small private estab-
lishments. The survey includes data for both full-time and part-
time employees. Results of additional research will appear as
occasional articles in the Monthly Labor Review or Compen-
sation and Working Conditions.

The statistical tables in these publications cover only a por-
tion of the employee benefits information collected. Persons
interested in all provisions of a particular benefit studied from
the 1981-91 surveys can purchase a set of magnetic tapes con-
taining the survey’s data base by writing to: Office of Com-
pensation and Working Conditions, Bureau of Labor Statis-
tics, Washington, D.C. 20212. The 1992 data may be avail-
able to the public on magnetic tape in the future. Questions on
the availability of these tapes may be sent to the above ad-
dress.

Because of the Bureau’s pledge of confidentiality to survey
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 preparing supporting
documentation.

For major benefit items, the BLS survey obtained plan pro-
visions and employee participation data. 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, how-
ever, the data file is insufficient to produce reliable national
estimates, because either information on the provisions fre-
quently 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 documentation 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.

For the 1981-89 and 1991 surveys, data users can purchase
individual tapes with details of plans for each of the follow-
ing benefits or groups of benefits: (1) Medical, dental, and
vision care; (2) life insurance; (3) sickness and accident imsur-
ance; (4) long-term disability insurance; (5) retirement plans;
and (6) time off. A single combined tape is also available
that contains data for all of the benefits listed above. For the
1990 survey, only a single tape with selected benefit areas is
available.

101

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 other identifying information is removed) to protect the
confidentiality of responding establishments.

Purchasers also receive the control file, which contains es-
tablishment information required to produce estimates from
the plan data. Control file records include establishment size
codes; geographic, industrial, and employee group classifica-
tion codes; and the weighted number of workers in each em-
ployee group. The control file also lists all benefit plans of-
fered 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. Although plan identification numbers
on the control file are scrambled, the same scrambled num-
bers appear on the data file so they can be matched to make
estimates. Because establishment identification 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 re-
corded in coding manuals (questionnaires) for medical, den-
tal, and vision care, life insurance, sickness and accident insur-
ance, long-term disability insurance, and retirement plans, and
are then entered on the plan data file. A set of coding manuals
and instructions for completing them are supplied to tape pur-
chasers for interpretation of data on the file. Time off, flexible
benefits, and reimbursement account provisions are reported
directly on collection forms, copies of which are also provided
to tape purchasers.

The analysis of medical, dental, and vision care, life insur-
ance, sickness and accident insurance, long-term disability
insurance, and retirement plans is extremely detailed. The
following list of medical, dental, and vision care plan provi-
sions included in the 1992 data base gives an indication of the
extent of the information available on the magnetic tapes.
Coverage of other benefits is similarly detailed.

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



Chapter 8. Benefits by selected characteristics

The Employee Benefits Survey provides data on the inci-
dence and characteristics of employee benefits for full and part-
time workers in private industry and State and local govern-
ment.® Data are presented separately for small establishments;
medium and large establishments; and State and local govern-
ments. Combined data from each of these sectors of the
economy are now available.

Included in the small establishment survey are small inde-
pendent businesses, such as a local grocery store, and small
establishments that are part of larger enterprises, such as a
Jocal service unit of a large manufacturing company. Separate
data are presented in this chapter on the incidence of benefits
among employees in small, independent businesses, which
account for about three-fourths of the workers in all small
establishments in 1992 (tables 88-89).

For the first time, incidence of employee benefits for full-
time workers by union status is available (tables 90-91). In
general, employees covered by collective bargaining agreements
were more likely to receive insurance and retirement coverage
than nonunion workers. Just under 1 in 10 full-time employ-
ees in small private establishments were covered by collective
bargaining agreements.

Incidence of benefits for part-time workers in small private
establishments is also included in this chapter. Part-time work-
ers within the scope of the Employee Benefits Survey were far
less likely to be covered by benefit plans than full-time work-
ers (tables 92-93). Part-time workers account for about one-
fifth of the small private establishment workforce.

Benefits in small, independent businesses

In 1992, the proportion of full-time employees in small in-
dependent businesses who received specific employee benefits
was generally less than that found among all full-time em-
ployees in small establishments. For example, paid funeral leave
was available to 50 percent of full-time employees in all small
establishments and to 39 percent of such employees in small
independent businesses (table 88).

Paid vacations and holidays were the most prevalent ben-
efits available to full-time employees in small independent

* Data on full- and part-time employees in State and local governments are
available in Employee Benefits in State and Local Governments, 1990 (Bureau
of Labor Statistics, Bulletin 2398, February 1992). Data on full- and part-time
employees in medium and large private establishments are available in Employee
Benefits in Medium and Large Establishments, 1991 (Bureau of Labor Statis-
tics, Bulletin 2422, May 1993).

°° Combined 1990-91 data, which provide information on benefits provided
to all workers in private industry and State and local governments, are available
in BLS Reports on Employee Benefits in the United States, 1990-91 (Bureau of
Labor Statistics Summary 93-4, June 1993). Combined 1991-92 data will be
available mid-summer 1994.

86

businesses in 1992, covering 85 and 79 percent of workers,
respectively. Just under half of the full-time employees in small
independent businesses had paid jury-duty leave, paid sick
leave, and paid rest time. Other time-off benefits were less
prevalent.

Nearly two-thirds of the full-time workers in small inde-
pendent businesses participated in medical care plans in 1992;
slightly more than one-half had life insurance protection. Other
insurance coverage was much less prevalent: dental care and
sickness and accident insurance plans each covered about one-
fourth of full-time employees in small independent businesses
in 1992, while about an eighth had long-term disability in-
surance protection.

Retirement plans covered one-third of full-time employees
in small independent businesses in 1992, compared to nearly
one-half in all small establishments. Most of this difference
resulted from the significantly lower incidence of defined ben-
efit pension plans in small independent businesses.

Among other benefits studied, the most prevalent available
to full-time employees in small independent businesses was
nonproduction bonuses—one-half of such workers received
these bonuses in 1992 (table 89). Few of the other items stud-
ied were widespread among full-time workers in all small es-
tablishments. In small, independent businesses, these benefits,
for the most part, were even less prominent.

Benefits by union status

The incidence of benefits provided to full-time workers cov-
ered by collective bargaining agreements was typically higher
than for nonunion workers. The exceptions included holidays
and vacation days where the incidence for nonunion workers
was higher. Nonunion workers were also more likely to re-
ceive sick leave, but this was more than offset by sickness and
accident insurance coverage where the incidence of coverage
for union workers was nearly three times as high as that for
nonunion workers (table 90).

About 9 in 10 union workers received medical care, retire-
ment, and life insurance coverage, a significantly greater inci-
dence of coverage than nonunion workers. Union workers were
also nearly twice as likely to receive dental insurance as non-
union workers. Although union workers were four times as
likely to receive defined benefit plans, only one-fifth of these
workers were offered defined contribution plans compared to
one-third of nonunion workers.

The incidence of educational assistance benefits was simi-
Jar for union and nonunion workers. Nonunion workers were
three times more likely to be eligible for reimbursement ac-
counts and were much more likely to receive nonproduction



Table 52. Medical care benefits: Percent of full-time participants in plans with drug abu:

benefits, smail private establishments, 1992

treatment benefits by extent of

Sci Professional, technical, and| Clerical and sales Blue-collar and service
All participants related participants participants participants
Coverage limitation Inpatient|inpatient| Out- |inpatient|Inpatient| Out- |inpatient|inpationt| Out- jinpatient|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 | too | 100
With coverage .. 100 ral 73 | 100
Covered the same as other iltinesses | 36 8 8 35

Subject to separate limitations’...

Limit on days 40 40 22 4
Per year .. 29 3t 19 29
Per confinemé 7 4 iv) 9
Per lifetime 5 7 3 4
Limit on number of treatments| 8 7 3 9

Limit on dollars 37 a7 51 37
Per day 1 1 12 1
Per year . 13 18 36 12
Per lifetime 30 30 28 31
Per other period 4 4 3 2

Coinsurance limit” 9 9 29 8

Ceiling on out-of-pocket expenses

does not apply 7 7 28 18

Separate copayment or

deductible ... 1 1 4 1

Other limitations

Without coverage .. iv) 29 27 iv]

73 76 | 100 xa) 75 | 100 cl 7
8 9 35 8 7 36 8 8
65 67 65 63 68 64 63 64
42 26 39 40 23 39 38 20
33 24 29 32 20 29 30 16
6 Vv) 8 4 0 5 4 iv)
5 2 5 7 3 5 7 3
10 2 7 6 2 8 7 4
37 51 36 36 62 38 38 49
2 13 1 2 12 i) ° 13
12 33 10 9 38 16 16 36
82 32 31 at 30 28 28 25
2 2 3 3 3 5 5 4
8 28 6 6 30 1 "1 30
18 27 17 16 31 16 16 26

1 4/10 0 3 1 1 4
iv) o 1 iv) i) 0 1 1
27 a) & 29 2] 29 29

"| Detoxification is the systematic use of medication and other methods
under medical supervision to reduce or eliminate the effecis of substanca
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.

* includes all workers with some type of drug abuse treatment cover-

age.
* Separate limitations indicate that drug abuse treatment benefits are

54

‘more restrictive than benefits for other treatments. For example, if a plan
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.



Table 45. Medical care benefits: Percent of full-time
Participants by availability of managed care benefits, small
private establishments, 1992

Profes-
sional, | Clerical |Blue-col-
‘All par. | techni- | and | tar and
Managed care plan ticipants cal, and| sales service
related | partici- | partic
partici- | pants | pants
Pants:

100 | 100 | 100

With managed care benafits .. 89 88 ot 89

Traditional fee-for-service, with
at least one cost containment
feature! .

87 50 62 87
Preferred provider organization’... 18 24 16 16
Exclusive provider organization® .) () 0 iv) iv)

Prepaid health maintenance
‘organization’

14 14 13 16

W 12 9 ot

Without managed care

" Fee-for-service plans with at least one cost containment feature, in-
‘cluding utilization review, pre-admission certification, mandatory second
surgical opinion, pre-admission testing, and no or limited reimbursement
for nonemergency weekend admission.

5 A preferred provider organization (PPO) is a group of hospitals and
physicians that contract to provide comprehensive medical services. To
encourage use of organization members, the health care plan limits reim-
bursement rates when participants use nonmember services.

* An exclusive provider organization is a group of hospitals and physi-
cians that contract to provide comprehensive medical services. Partici-
Pants are required to obtain services from members of the organization to
receive plan benefits,

* Less than 0.5 percent.

° A health maintenance organization provides a prescribed set of bene-
fits to enrollees for a fixed payment.

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

50

Table 46, Medical care benefits: Percent of full-time
participants In non-heaith maintenance organization plans by
coverage for selected cost containment features, small
private establishments, 1992

Profes-
, All sional, | Crercal_| Puewolior
Cost containment feature | aisnants| technical, | and sales | 84
and related|pariipants|, Serve
participants
No or limited
reimbursement for
nonemergency
weekend admission to
| 48 7 14 “4
provision | 53 54 59 48
Incentive to audit hospital
statement | 8 8 6 10
Care subject to utilization
review 37 39 37 36
n 2 m 70
66 66 66 67
6 4 6 7
Deductible on hospital
admission 28 25 26 30
Less than $100 2 0) 1 3
$100 - $199 2 3 2 4
$200 - $299 9 8 10 10
$300 - $399 5 3 5 5
$400 - $500 8 40 8 40
Greater than $500 1 1 1 1
Reduced percent of
charges paid by
~ 28 31 28 27
Other penalty 8 40 "1 5
No penalty ... 4 5 5 3

* Less than 0.5 percent.

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



Table 9.

aid vacation:

service, smail private establishments, 1992—Continued

Percent of full-time employees by amount of pald vacation days provided for selected periods of

Profes- | Clerical | Blue-col- Protes: | Clerical | Blue-cok
Alem: jtechnioa,| and | lar and stem. [techniea,| 204 | lar and
Vacation policy er ‘| sales | service Vacation policy ‘| sales | service
Ployees and relat-| rpoy. | empl ployees |and relat.
| employ- employ-
od em- ees ees ed em- ees ees
ployees ployees
After 25 years of After 20 years of service*
service: Under 5 days ie) - 1) @
Under 5 days .. 0 - } 0 ys 8 3 6 Bal
5 days .. 8 3 8 1 Over 5 and under 10
Over 5 1 1 iv) 1
days 1 1 a 1 10 days .. 2 16 23 at
10 days 2 16 23 at Over'10 and under 15
Over 10 and under 15 days i” 1 1 to] 1
1 1 G) 1 15 days . | 28 a7 26 25
15 days - 26 a7 a7 25 Over 16 and under 20
Over 15 and under 20 days 1 2 1 1
YS cnn 1 2 1 1 20 days svn 19 28 24 12
20 days 19 28 24 13 Over 20 days " 16 18 8
Over 20 days .. "1 16 13 8
INot provided paid vacations 2 6 6 19

*” Employees receiving no paid vacations in their early years of service
are included in the overall percentage of workers provided paid vaca-
tions; however, they are disregarded In computing the distributions by
length of service up to the service period at which they become eligible

tor vacations.
* Less than 0.5 percent.
° Employ

ees either are granted a specific number of days after com-

Pletion of the indicated length of service, or accrue days during the next

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

12 month period. The total number of daye are assumed avallable for
use immediately upon completion of the described length-of-service in-

terval.

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

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

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

establishments, 1992 1992
Protes- Protes-
sional, | Clerical |Blue-col- slonal, | Clerical /Blue-col-
Allpar-| techni: | and | lar and ‘Allpare | techn | and | tar and
Length of service requirement | i-1.0r1,|cel, and] sales | service Policy siciganta| 8! and| sales | service
related | partici- | partici- ipants| ‘related | partici- | partici-
partici | pants | pants partic | pants | pants
pants pants
Total 100 | 100 | 100 | 100 Total . 100 | 100 | 100 | 100
o4 | 92 | 94 | 95 Carryover only .. 21 a {| 23 | 16
5 5 3 5 Cash.in only 10 @ | 10 1
1 2 1 i Carryover and cash-in 7 8 6 7
3 5 4 3 Unused benefit lost . sa | 55 | 57 | 61
1 1 1 0 Data not available 38 1 1 4
7 24 | 23 | 10
Q 0 ry) 0
6s ro o a NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.
Without service requirement 5 8 4 4
Service requirement not
determinable 1 1 1 2

* Less than 0.8 percent.

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

12



Table 34. Medical care benefits: Percent of full-time participants by coverage for selected categories of care, small private
establishments, 1992
Care provided
Category of medical care Total , Subject to | Subject to | Subject to | Sare.not pro-
All Covered in full | internal limits | overall limits | internal and
only! only? overall limits
All participants
Hospital room and board 100 100 12 3 57 27 - |
Extended care facility’. 100 84 5 7 13 49 16 i
Home health care* 100 80 12 12 16 40 20
100 57 6 8 18 25 43 |
Surgery
Inpatient 100 100 24 1 70 6 -
Outpatient’ 100 100 29 1 64 7 -
Physician visits
In hospital .. 400 100 19 0 68 12 -
Office 100 100 4 15 a 9 iv)
Diagnostic X-ray and laboratory .. 100 100 22 (y) 67 10 -
Prescription drugs—nonhospita .. 100 95 1 26 62 7 5
Mental health care |
In hospital .. 100 96 2 15 9 70 4
Outpatient 100 95 ) 18 2 75 5
Alcohol abuse
Inpatient detoxification® 100 95 7 " 7 60 5
Inpatient rehabilitation’ .. 100 70 1 10 6 52 30
‘Outpatient rehabilitation’ 100 ial 1 13 6 51 29
Drug abuse treatment
Inpatient detoxification* 100 93 7 10 16 59 7
Inpatient rehabilitation’ .. 100 67 1 10 5 51 33
Outpatient rehabilitation” 100 69 1 13 5 50 31
Professional, technical, and related
Hospital room and board 100 100 13 2 59 26 -
Extended care facility’ .. 100 87 4 18 16 49 13
Home health care? 100 83 12 13 16 42 7 i
100 60 8 10 7 24 40 |
100 100 23 0 73 3
100 100 2B iv) 68 4 -
100 100 20 iv) 72 8 -
100 100 4 13 73 n -
Diagnostic X-ray and laboratory . 100 100 7 i) 2 1 -
Prescription drugs—nonhospital.. | 100 95 6 26 61 8 5
Mental health care i
In hospital . 100 7 2 7 9 70 3 i
Outpatient 100 97 - 19 1 7 3 |
Alcohol abuse treatment j
Inpatient detoxification’ 100 95 8 9 7 61 5
{npatient rehabilitation’ 100 70 1 9 6 54 30
Outpatient rehabilitation’ 100 74 1 "1 7 86 26
Drug abuse treatment
Inpatient detoxification® 100 94 8 9 16 61 6
Inpatient rehabilitation” 100 69 1 9 4 54 31
Outpatient rehabilitation’ 400 72 1 n 5 55 28
See footnotes at end of table.
41



Table 38. Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
maximum out-of-pocket expense provisions, small private
establishments, 1992

Profes-
sional, | Clerical |Blue-col-
‘techni- and | tar and
Provision All Pak cal, and
ticipants related
particl-
Pants
Total... 100 | 100 | 100
With limit on out-of-pocket expense.| 90 | 91 92 | 88
With an annual dollar maximum
‘on out-of-pocket expense’ ... 88 89 89 86
Per individual:
Less than $400 .. 4 8 3 4
$400 10 10 uv 10
$401-$499 19) 19) 19] =
$500 12 n 13 12
$501-$749 5 6 5 5
$750-$999 9 10 9 9
2g) 24 | at 23
5 4 5 5
6 6 7 6
7 8 7 7
6 6 8 5
Per family>
Less than $750 .. 3 5 3 2
4 5 3 4
5 4 5 6
4 5 3 4
$1,250-$1,499 2 2 1 2
1,500 .. 3 3 3 3
$1,501-$1,999 3 3 2 4
$2,000 .. 10 16 9 8
$2,001-$2,999 8 7 8 7
$3,000 .. 7 5 8 7
$8,001 or greater 8 8 9 7
No family maximum 31 26 34 30
Annual maximum on out-of-pocket
expenses varies by coinsurance
rate* ... 2 2 3 2
No out-of-pocket expense required® . 3 4 2 3
Other’... (9) 19) 1 io]
No limit on out-of-pocket expenses .| 7 3 5 9
Not determinable .... i) 1 - 6
Average dollar maximum on
individual out-of-pocket expense ...| $1,108 | $1,088 | $1,207 | $1,033
Average dollar maximum on family
out-of-pocket expense .... .| 2,262] 2,085) 2,467] 2,193

‘ Deductible amounts were excluded from computation of the out-of-
pocket dollar limits. With rare exceptions, an out-of-pocket limit was
specified on an annual basis. Few workers were in plans where the ex-
pense limit applied to a disability or a period other than a year. Charges
for certain services, such as mental health care, may not be counted to-
ward 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
@ percentage of the total premium. These plans were excluded from the
computation of the out-of-pocket dollar limits.

® Less than 0.5 percent.

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

* Some plans reimburse medical expenses at more than one coinsur-
ance rate. They impose a limit on out-of-pocket expenses by specifying a
maximum on covered medical expenses beyond which all expenses are
paid at 100 percent.

© All covered expenses are paid at 100 percent.

® Includes plans where the limit on out-of-pocket expenses varies by
the individual participants's earnings.

45



Postretirement survivor benefits

ERISA also requires defined benefit pension plans to make
benefits available in such a way that a spouse receives at least
50 percent of the retiree’s payments after the retiree’s death.
When this type of pension—called a joint-and-survivor annu-
ity—is paid, the employee will generally receive a lower ben-
efit during retirement to account for the likely increase in the
length of time the plan will have to make payments. When the
retiree dies, a pension benefit will be payable for the life of the
surviving spouse. All defined benefit pension plan participants
had joint-and-survivor annuity options available to them in
1992.9

Joint-and-survivor annuities are based on an actuarial or
arithmetic reduction of the employee’s pension. Three-tenths
of the participants were in plans offering only a joint-and-sur-
vivor option that provides a surviving spouse 50 percent of the
retiree’s adjusted pension. Two-thirds of the participants had
a choice of two alternative percentages or more (frequently
50, 67, and 100 percent) to be continued to the spouse, with
corresponding reductions in the employees’ annuities.

Although defined benefit pension plans typically pay their
benefits in the form of annuities covering the life of the retiree
and spouse, some plans offer an option in the form of a lump-
sum payment. This lump sum provides the employee with the
actuarial equivalent of the annuity. Lump-sum payments at
retirement, studied in the small establishments survey for the
first time in 1992, were available to one-fifth of pension par-
ticipants (table 80). In virtually all of these plans, only a full
jump-sum option was available. If a full lump-sum distribu-
tion is taken, the participant receives no further benefits from
the pension plan. If a partial distribution is made, the partici-
pant generally receives a reduced annuity for the remainder of
her or his life.

Preretirement survivor benefits

Virtually all defined benefit pension plan participants also
had survivor benefits available in case the employee died be-
fore retirement. Participants usually 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 de-
tails.) For most participants, a surviving spouse would re-
ceive an annuity equivalent to the amount payable if the em-
ployee had retired on the day prior to death with a joint-and-
survivor form of payment in effect. Nearly all survivor pen-
sions like these were based on an early retirement benefit, with
ajoint-and-survivor reduction. In a few instances, preretirement
joint-and-survivor protection involved an extra cost to the
employee and was available only if elected. The employee nor-
mally paid this cost through a small deduction in the pension,
ultimately payable to either the employee or the surviving
spouse. The most common preretirement survivor annuity was
50 percent of the early retirement benefit.

» Survivor benefits are discussed in more detail in Donald Bell and Avy Gra-
ham, “Surviving Spouse’s Benefits in Private Pension Plans,” Monthly Labor
Review, April 1984, pp. 23-31.

T4

An alternative means of providing a preretirement survivor
annuity is to calculate the benefit without a joint-and-survivor
reduction. If an active employee dies after completion of the
vesting requirement, a typical survivor would receive an an-
nuity equal to 50 percent of the employee’s accrued benefit to
date. Payments may be reduced by the early retirement adjust-
ment, and begin when the employee would have reached early
Tetirement age. If the employee lives to become eligible for
early retirement, the survivor benefit in many cases switches
to the equivalent of a 50-percent joint-and-survivor benefit
calculated as if the employee had retired on the day of death.

Defined Contribution Plans

One-third of the full-time employees covered by the 1992
survey participated in one or more defined contribution plans.
Two-fifths of the white-collar workers, compared to one-fourth
of the blue-collar workers, participated in these plans.

Plan types

Defined contribution plans may be divided into those de-
signed to provide retirement benefits and those intended for
capital accumulation purposes. Retirement plans, as defined
in this study, do not allow withdrawal of employer contributions
until retirement age, death, disability, separation from service,
age 59 1/2, or hardship. Capital accumulation 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 nearly three-
tenths of the employees covered by the 1992 survey. Taken
together with participants in defined benefit pension plans
(which, as described earlier in this chapter, are always for re-
tirement purposes), just over two-fifths of the full-time em-
ployees covered by the survey participated in at least one re-
tirement plan (table 74).

Defined contribution plans may also be classified by type of
plan (table 81). The survey provided data on the following
types: Profit-sharing plans (with 16 percent of employees
participating); savings and thrift plans (14 percent); and money
purchase pension plans (5 percent). Employee stock owner-
ship plans and simplified employee pension plans, or SEPs,
were rarely found; stock bonus plans were nonexistent in the
1992 survey." (Many SEPs cover the self-employed, who are
excluded from the survey.) 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 des-

4 Most defined contribution plans can be used both to provide retirement in-
come orto accumulate financial assets. Capital accumulation plans may provide
retirement income because withdrawals of the employer’s contributions are vol-
untary, not mandatory. Similarly, preretirement access to accumulated assets from
defined contribution retirement plans is frequently possible. These plans nearly
always permit preretirement withdrawals of the employer's contributions (for
example, at age 59 1/2, 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 retirement.



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 is available to employees in several different
forms—from daily rest periods to annual vacations of several
weeks, In 1992, survey coverage of paid time off benefits in-
cluded provisions for lunch and rest periods; holidays and va-
cations; and personal, funeral, jury-duty, and military leave.
Paid and unpaid maternity and paternity leave were also sur-
veyed. Information on paid sick leave appears in chapter 3.

Work schedules

Weekly work schedules of 40 hours were predominant, ap-
plying to four-fifths of the full-time employees covered by the
survey (table 3). Alternatives, such as 35 or 37'/, hours per
week, were most prevalent among white-collar workers. Four-
fifths of the work force were scheduled to work five 8-hour
days.

Formal flexible work arrangements, which give employees
the opportunity to begin and end the workday within a range
of hours, were rarely observed. When available, limits 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 coffee breaks and
cleanup time (tables 4 and 5). Paid rest time was slightly more
prevalent among blue-collar and service workers than among
the other two occupational groups, while paid lunch time was
more prevalent for professional and technical workers.

Blue-collar employees who were covered by paid lunch pe-
riod plans averaged 31 minutes per day. Their white-collar
counterparts averaged 42 minutes each day. Paid rest time,
averaging 26 minutes a day, was provided most commonly as
two daily breaks of 10 or 15 minutes each.

Paid holidays. Paid holidays, averaging 9.2 days per year, were
provided to over four-fifths of full-time employees. White-col-
lar workers were more likely to receive paid holidays than were
blue-collar workers. Floating holidays and “personal holidays,”
such as employee birthdays, were included in the holiday plans
reported (tables 6-8).

When a holiday fell on a scheduled day off, such as a Satur-
day 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 addi-
tional day’s pay, depending on when the holiday 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 vacations than blue-
collar workers. Vacation pay provisions for all employees av-
eraged 7.6 days at 1 year of service, 13.5 days at 10 years, 15.1
days at 20 years, and 15.4 days at 30 years.

Plans covering white-collar employees generally provided
more vacation days than those for blue-collar employees, par-
ticularly 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 per-
sonal 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 number 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 employees received their regular salaries or earn-
ings during vacation periods. The remainder received either a
flat-sum payment or payments based on a percentage of regu-
lar earnings. Anniversary-year bonus vacation days, such as
an extra week of vacation at 10 or 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 re-
quirement was 1 year for both white-collar and blue-collar
participants.

The survey also covered carryover and cash-in provisions
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 vacation days that were unused



Table 43. Medical care benefits: Percent of full-time
participants In plans with inhospital surgical benefits by
type of payment, small private establishments,

1992

Table 44. Medical care benefits: Percent of full-time
participants in plans with inhospital surgical benefits by

comparison with outpatient surgical coverage, by type of
medical care provider, small private establishments, 1992

Pro-
fes- Blue-
sional,| 1S | collar
All |techni- and and
‘Type of payment partic] cal, | ig, | serv-
pants | and nici. ice
related | P80 | partici-

partici-| P@M'S | pants
pants

Total .. 100 | 100 | 100

Full usual, customary, and reasonable

charge" 24} 23 | 27 | at

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

Full usual, customary, and reasonable
charge up to @ specified amount or
‘subject to a deductible

Percent of usual, customary, and
reasonable charge:

s2} 52] 51) 54
1
a] 8 8
o| 6
9 | 10 9 7

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

Dollar allowance per procedure, plus
percent of additional charges:

80 parcent

‘Other percent

3
1/0/00
a; o]o 1

Dollar allowance per procedure

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

? Less than 0.5 percent.

* Includes 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.

Profes-
sional, | Clerical jBlue-col-
‘All par- | techni, | and | lar and
Outpatient surgery teipents| Ca and] sales | service
pants | ‘elated | partici- | partici-
partic | pants | pants
pants
All plans
Total 100 100 100 100
Coverage the same as inhospital
surgery ... 79 82 8t 76
Coverage differs from inhospital
surgery ... 24 18 19 24
Non-health maintenance
‘organizations
Total 100 100 100
Coverage the same as inhospital
‘surgery ... 7 81 79 74
Coverage differs from
‘Surgery .... 23 19 at 26
Health maintenance organizations
Total 100 100 100
Coverage the same as inhospital
surgery .. eo | a8 | 97 | 85
Coverage differs from inhospital
W 12 3 15

surgery ..

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

49



Contents

Page

Chapter 1. Incidence of employee benefit plans
Time-off benefits ..
Disability benefits
Medical, dental, and vision care, and life insurance...
Defined benefit pension and defined contribution plan:
Flexible benefits plans and reimbursement accounts
Other benefits......

Chapter 2. Work schedules, paid time off, and parental leave
Work schedules ....

Paid lunch and rest perio.
Paid holiday:
Paid vacations.
Paid personal leave
Paid funeral leave, jury-duty leave, and military leave
Parental leave

Chapter 3. Disability benefits.
Paid sick leave ...
Sickness and accident insurance
Long-term disability insurance ..

Chapter 4. Medical, dental, and vision care
Medical care...
Coverage of selected categories of medical care
Funding arrangements
Payment arrangements
Overall limitations
Hospital coverage
Alternatives to hospitalization
Surgical coverage
Cost containment
Preferred provider organizations
Prescription drug benefits
Mental health coverage
Alcohol and drug abuse treatment.
Health maintenance organizations
Other medical benefits ....
Employee contributions ...
Participation requirements
Coverage for retired workers
Employee and plan payments
Amount of expenses .......

WON ee

SCoOmIWIDIA



erage benefit for for all participants was $40,000. Although
the average benefit increased with earnings for all occupational
groups, white-collar employees had the greatest increases. This
results from the greater prevalence of earnings-based life in-
surance benefits, which kept pace with rising earnings, among
these employees.

Coverage for older active workers and retirees

One-third of participants were in plans where older active
workers faced reduced benefits. Coverage is reduced to ac-
count for the increased cost of insuring older workers.* Of
the participants whose plans reduced coverage, it was most
common to have the first reduction at age 65. Others would
experience reductions beginning at age 70. It was not com-
mon for reductions 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 percent at age 65, then
to 50 percent at age 70.

Basic life insurance coverage continued after retirement for
one-fourth of the full-time participants in small private estab-
lishments in 1992. This coverage almost always continued for
the remainder of the retiree’s life, but the amount of the ben-
efit was usually reduced at least once during retirement.

Related protection

Accidental death and dismemberment (AD&D) insurance
was available to three-fourths of the life insurance plan par-
ticipants. This insurance provides additional benefits if a
worker dies or loses an eye or a limb in an accident. For virtu-
ally 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.**

> Details on life insurance benefits for older workers are discussed in Stephanie
Hyland, “Age-related Reductions in Life Insurance Benefits,” Monthly Labor
Review, February 1991, pp. 36-38.

% For more information on retiree life insurance, see Margaret Simons and
(Cynthia Thompson, “Life Insurance Benefits for Retired Workers,” Monthly Labor
Review, September 1990, pp. 17-21.

35 Formore information on accidental death and dismemberment benefits, see
Cynthia Thompson, “Compensation For Death and Dismemberment,” Monthly
Labor Review, September 1989, pp. 13-17.

66

Benefits supplementing basic life insurance coverage were
available to 3 out of 10 participants. Almost without excep-
tion, these employees were required to pay the full premium
for such benefits. The typical supplemental plan provided term
life insurance in multiples of 1-to 3-times annual pay, at the
employee’s option. Supplemental coverage was considerably
more prevalent for employees 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 two-
fifths of participants. Of these, half were required to pay the
entire premium to obtain coverage while the other half had
either joint employee-employer or entirely employer paid cov-
erage. Dependent coverage was most often a flat dollar ben-
efit. In 1992, such plans averaged $4,611 for spouse coverage
and $2,169 for children. Dependent coverage based on a flat
dollar amount was more common for blue-collar and service
participants than the other occupational groups. However, the
average flat dollar amount for dependent coverage was lower
for blue-collar workers than for other workers. In other plans,
the employee often had the option to select specific
benefits.

Plans providing a monthly income to surviving members of
an employee’s family were rare. These survivor income ben-
efits were in addition to other benefits, such as basic life insur-
ance and survivor pension benefits. Survivor income payments
were generally a percentage of the employee’s pay or a flat
dollar amount. Benefits usually continued for 24 months, al-
though some continued until a specific event occurred, such
as the surviving spouse remarrying or reaching age 65, or sur-
viving children reaching a given age.

Service requirements

‘Two-fifths of all life insurance participants were required to
work a minimum period to qualify for the plan. The most com-
mon service requirement for such workers was 3 months, fol-
Jowed closely by 1 month. About one-third of participants had
a service requirement that could not be determined. The reader
is cautioned to keep in mind the high rate of not determinable
service requirements when interpreting these data.

% For more information on survivor benefits, see David Ott, “Employer-pro-
vided Survivor Benefits,” Monthly Labor Review, June 1991, pp. 13-18.



Table 24. Paid annual sick leave:' Percent of full-time Table 25. Pald sick leave: Percent of full-time participants

participants by unused sick leave policy and carryover by length-of-service requirement for participation, small
provisions, smail private establishments, 1992 private establishments, 1992
Protes-
sional, | Clerical \Blue-col-
, i techni- | and | lar and
Unused sick leave policy and | All par- i i All par-
carryover provisions ticipants| 20nd | eas | partie Length-of-service requirement | ticipants
partici- | pants | pants
pants
Unused sick leave policy Total 100
Total .. 100 | 100 | 100 | 100 With service requirement 54
1 month .. 9
Carryover only 30 37 28 a 2 months 3
Cash-in only 13 " 1 7 3 months 20
Carryover and cash-in 8 10 10 6 4-5,months 1
Unused benefit lost 49 42 52 50 6 months ‘| 10
Data not available ie) 1 ro) ie) 7-441 months | 0
1 year... 10
Carryover provisions ‘Over 1 year 1
Total 100 | 100 | 100 | 100 Without service requirement . 44 50 4 43
Unlimited accumulation .. 39 30 27 45 Data not available ... 2 2 3 2
Limit on total number of days
accumulated .. es | o | 73 | 55 * Less than 0.5 percent.
NOTE: Because of rounding, sums of individual items may not equal to-
Under 10 days 8 H $ 3 tals. Where applicable, dash indicates no employees in this category.
10 7 9 14
1 2 1 1
2 1 1 3
2 2 1 3
io) iy) - -
10 13 8 10
4 8 3 2
1 1 1 1
7 9 6 6
1 i) 1 1
1 - 2 -
a is) 1 is)
4 5 3 3
a 1 io) a
1 1 1 1
7 2 15 e
2 2 3 2
1 1 2 1
to) - 0 e
Data not available .. i) 1 co) 0

1 Paid sick leave plans with a specified number of days available each
year.
‘Less than 0.5 percent.
2 Includes carryover provisions that vary by length of service.

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

21



f
|
|
!
|

Table 65. Vision care benefits: Percent of full-time
employees with care and percent of participants with
coverage for selected services, small private establishments, H

1992
Protes-
All sional, | Clerical | Blve-collar
ftom ial antg| technical, | and sales f
Participants! snd related! participants| cichee ts
participants; Participant
Total with vision care
benaiits 10 8 10 10
Vision care participants
100 100 400 100
97 93 97 98
100 100 100 100
76 73 6 78 |



Table 54. Medical care benefits: Percent of full-time participants In contributory plans’ by type and amount of employee
contribution, small private establishments, 1992—Continued
Non-heaith maintenance
All plans. Health maintenance organizations organizations
‘Type and amount of contribution
Employee cover- Family. Employee cover- Family Employee cover- Family
‘age coverage® ‘age coverage* ‘age coverage? !
1
Clerical and sales
Total 100 100 100 100 100 100
Flat monthly amount .. 81 73 84 76 at 72
‘Less than $5.00 1 0) 2 1 0 -
$5.00-$9.99 ..... 2 cv) 4 - 2 i)
$10.00-$14.99 .. 7 io} 15 1 5 ~) |
$15.00-$19.99 . 8 1 14 - 8 1 |
$20.00-$29.99 . 13 3 7 10 14 2 {
$30.00-$39.99 . 16 2 10 4 7 2 |
$40.00-$49.99 5 3 8 1 4 3
$50.00-$59.99 . 4 2 4 1 4 2
$60.00-$69.99 . 3 § 10 2 2 5
$70.00-79.99 . 3 2 3 2 3 2
$80.00-$89.99 .. 3 2 5 0 3 3
.00-$99.99 .. 1 2 - 2 i 2
$100.00-$124,99 1 6 2 10 1 6
$125,00-$149.99 .. iv) 6 - 1 9) 7 |
$150.00-$174,99 . - 5 - 2 - 6 i
$175.00-$199.99 .. - 5 - 6 - 5 i
$200.00 or greater - 18 - 29 - 16 |
Composite rate* 15 10 4 a 7 1 |
‘Amount varies by employee" " 8 5 13 8
Amount varies by eamings .. (9) (a) - iv) 4 a
Not determinable ... 7 19 10 20 6 19
Blue-collar and service
Total ... svn 100 100 100 100 100 100
Flat monthly amount .. 88 83 90 83 87 83
Less than $5.00 2 1 2 1 2 1
$5.00-89.99 2 - 1 - 2 -
$10.00-$14.99 . 5 io) 4 - 6 )
$15.00-$19.99 .. 8 ¢ 10 - 7 fv)
$20.00-$29.99 . 9 4 10 4 9 4
$30.00-$39.99 . 12 3 8 1 13 3 |
$40.00-$49.99 . 7 1 24 2 3 1 |
$50.00-$59.99 . 1 3 3 - 13 3 |
$60.00-$69.99 . 4 5 5 3 4 6 |
$70.00-$78.99 . 5 3 12 2 3 3
$80.00-$89.99 . 1 3 2 5 1 2 |
$90.00-$99.99 . 0 3 - 3 iv) 3 |
$100.00-$124.99 . 1 2 - 4 1 2 i
$125,00-$149.99 .. - 5 - 3 - 6 |
$150,00-$174.09 .. - 8 - 3 - 9
$175.00-$199.99 . - 8 - 5 - 8
$200.00 or greater - 20 - 40 - 16
Composite rate* 2t 14 9 7 24 18
Amount varies by employee’... 5 3 2 1 6 4 i
Amount varies by earnings ... 1 iv) - 1 1 7) i
Not determinable 7 13 8 16 7 13 |
* Plans providing services or payments for services rendered in the * A composite rate is a set contribution covering more than one bene-
hospital or by @ physician, Excludes plans that provided only dental, vi- fit area, for example, health care and sickness and accident insurance.
sion, or prescription drug coverage. Cost 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 em-
family, the rate for an employee with a spouse and one child was used. —_ployer-sponsored relmbursement 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 tems may not equal |
+ Less than 0.5 percent. totals. Where applicable, dash indicates no employees in this category. :

57 i



Table 15. Pald jury-duty leave: Percent of full-time
employees by number of paid jury-duty leave days avallable
per occurrence, small private establishments,

Table 16, Paid military leave: Percent of full-time
employees by number of paid military leave days available

1992 per year, small private establishments, 1992
Profes- Profes-
sional, | Clerical |Blue-col- sional, | Clerical |Blue-col-
Allem- techni- and lar and All em- techni- and lar and
Number of days , cal, and) sales | service Number of days + cal, and| sales | service
Ployees | ‘elated | employ- | employ- Ployees | related | employ- | employ-
employ-| ees | ees employ-| ees | ees
a ees 20s
Tota sessscesee 100 100 100 100 100 100 100
Provided paid jury-duty leave 68 76 65 47 Provided paid military leave .. 21 33 27 13
2 1 2 2 Under 10 days ) 0) iv) iv)
5 4 6 10 12 14 6
1 3 1 ¢) 2 3 2 2
50 67 56 40 No maximum specifi 7 13 8 5
Number of days not ave iv) QO 0) 0 Number of days not available 2 6 3 -
Not provided paid jury-duty leave .... 42 24 36 53 Not provided paid military leave ... 79 67 73 87

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

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

* Less than 0.8 percent.
* Military leave is provided as needed.

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

Table 17, Parental leave: Percent of full-time employees by
parental leave policy, small private establishments,

1992

Employer leave policy

All em-

Protes-
sional, { Clerical |Blue-col-
techni- | and | far and

cal, and} sales | service
related | employ- | employ-

employ-| ees | ees
ees | °

Total ...

Eligible for parental leave’ ...

Eligible for matemity leave
Paid days only.
Unpaid days only
Both unpaid and paid day:
Information not available on

type of days .. 1

Not eligible for maternity leave ...

Eligible for paternity leave
Paid days

Information not available on
type of days

Not eligible for patemity leave
Not eligible for parental leave

21 cI 24 16
20 31 23 16
1 3 1 1

18 26 20 13

1 1 1 1
1 1 1 1
9 | 6 | 1 7
1 1 i) 0.
8 | 13 9 é
is) is) ie)
i] 1 is) i)
12 17 14 9
79 69 76 85

* Parental leave includes plans providing matemity leave only, paternity
leave only, and both maternity and paternity leave.

? Less than 0.8 percent.

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

14



Table 32. Long-term disability insurance: Percent of full-time
participants by duration of benefits, small private
establishments, 1992

Table 33. Long-term disability Insurance: Percent of
full-time participants by length-of-service requirement for
participation,’ smail private establishments, 1992

Protes- Profes-
sional, | Clerical |Blue-co- sional, | Clerical |Blue-col
uration All par doch, and | ler and ‘at par-| techni | and | lar and
rat All | and| sales | service Length-of-service requirement | 5
‘ticipants | related | partici | partici- ticipants
partici- | pants | pants
pants
Total . 400 | 100 | 100 | 100 Total
For life ... 1 2 rv) - With service requirement 49 47 50 49
4 month .. 19 20 a 7
To retirement age 12 13 13 8 2 months 1 1 2/ @
3 months 2 15 4 9
Varies by age when disability 6 months 7 4 8 9
‘occurs 71 ” 72 m 1 year 5 5 4 7
One-time reduction 12 14 16 2 Over 1 year and under 2 year oe) 1 - -
Gradual reductior 59 87 56 63 2 years 2/0 2 5
3 years 1 1 iv) 1)
Varies by type of disability’... ) a) 1 - Over 3 years 1 ic) 2 1
Other 1 1 1 2 Without service requirement 27 26 2 | 3
Provision not determinable .... 15 13 14 19 Service requirement not determin-
able .. af 24 a 24 20

* Less than 0.5 percent.

2 The duration of benefits may be reduced gradually according to an
‘age schedule or reduced once at a specified age.

> Benefits for disabllities caused by accidents were usually paid for life;
duration for itesses was limited.

* Includes durations that vary by length of service.

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

31

* 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 individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.



Table 47, Medical care benefits: Percent of full-time
participants In non-health maintenance organization plans
with Inhospital surgical benefits by second surgical opinion
provisions, small private establishments, 1992

Table 48. Percent of full-time participants in preferred
provider organization ' plans by provision of care and
comparison with traditional fee-for-service plans, small
private establishments, 1992

Profes- Protes-
sional, | Clerical |BIue-col- sional, | Clerical |Blue-col
at par | ttn | and. | lar and Av par-| teem. | and. | ar and
Item ticipants cal, and) sales | service Item ticipants cal, 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
With second surgical opinion Services subject to PPO incentive:
provision ... 73 71 74 74
Hospital room and board .. 96 97 95 96
Without penalties for ‘Surgery 85 86 87 84
non-compliance ..... 34 28 3 37 Physician’s in hospital visits 86 88 84 86
Office visits 84 87 82 84
With penalties for non-compli- Outpatient prescription drugs 36 43 35 32
ance 39 42 39 37
‘Type of PPO incentive:
For selected procedures’ 29 32 28 28 Coinsurance rate differs 92 88 90 96
‘No payment without 100 vs 80 .. 16 WwW 15 18
‘second opinion 5 5 4 6 90 vs 80 30 34 33 25
Reduced coinsurance 90 vs 70 16 18 12 16
without second opinion .| 24 | 27 | 23 | 22 80 vs 70 8 5 5 | 8
80 ve 60 8 3 8 | 10
For all procedures 7| 8} 7 6 400 vs 70 . 4 a} 4] 3
Reduced coinsu Other coinsurance
without second opinion || 3 4 3 2 differences 16 13 15 17
Schedule of payments Lower annual deductible 34 | 38 36 30
lower without second Higher lifetime maximum :
opinion oy a 0 limit 3 3 4 2
Other lower payments 404 4 Lower catastrophic maximum
limit 46 48 45 45
Details of incentive not Lower hospital deductible 2 | 2 | 2 | 19
available .. 3 2 ar) Office visits copayment? 33 | a4 | 42 | 38
Outpatient preseription drugs
Without second surgical opinion ‘copayment! . 6 6 6 5
PrOVISION ......0 27 29 26 26 ‘Other incentives 6 10 5 5
7 procedures most commonly mentioned were tonsillectomy, adenoid- Not determinable... 2 2 4| 0

ectomy, hysterectomy, surgery of the nose or back, removal of the gall
bladder, and coronary bypass surgery.
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.

51

* A preferred provider organization (PPO) is a group of hospitals and
physiclans that contract to provide comprehensive medical services. To
‘encourage use of organization rhembers, the health care plan limits relm-
bursement rates when participants use nonmember services.

® Sum of individual items is greater than total because many partici
pants were In plans with more than one incentive.

® Under a PPO, physicians office visits may be subject to a modest
copayment, for example, $10 per visit; visits to non-preferred doctors were
commonly covered under major medical benefits that usually requirad sat-
itecton of an annual deductible and then paid 80 percent of physicians

arges.

“ Under a PPO, prescription drug coverage may be subject to a copay-
ment per prescription, for example, $5 per prescription; prescription drug
coverage under non-preferred providers was often covered under major
medical benefits that usually required satisfaction of an annual deductible
and then paid 80 percent of charges.

® 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.



length of disability.

All plans placed a fixed maximum on the number of weeks
of coverage, commonly 26 weeks.

Four-fifths of the employees with sickness and accident in-
surance were required to be on the job for a specified time
before they were covered by the plan. This service require-
ment was typically 5 months or less.

Sickness and accident insurance, unlike sick leave, usually
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 accident or hospitalized.
The waiting period is effectively 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 cov-
ered 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 earn-
ings for up to 26 weeks with a limit on the weekly benefit. The
State of New York requires that employers provide 50 percent
of earnings to a maximum of $170 per week. Similarly, the
State of New Jersey mandates that employers provide tempo-
rary disability insurance of 67 percent of earnings to a maxi-
mum of $288 per week? The State of Hawaii also requires
that employers provide a minimum level of temporary disabil-
ity income protection—55 percent of earnings to a maximum
of $291 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 unable to work
for an extended period of time (tables 29-33). Generally, LTD
benefit payments begin after 3 or 6 months of disability and
continue until retirement age, or for a specified number of
months, depending on the employee’s age at time of disability.
In most instances, the LTD payments take the form of a per-
cent of predisability earnings.

Of the full-time employees covered by the survey, 23 per-
cent had LTD coverage; 17 percent of those employees. with
coverage were required to contribute towards the cost of their
plan. Of those with jointly financed LTD plans, one-fourth
could choose from various options under a “cafeteria plan,”
with employee contributions varying by the mix of benefits
selected. (See chapter 7 for additional information on cafete-

9 Both States permit an employer to substitute-a private plan for the State plan
if the benefits provided are at least equivalent. In New York, many employers
agree to pay the employee's share of plan costs. California and Rhode Island also
have mandated temporary disability insurance plans, but these plans require no
employer contribution and, thus, are not included in this survey.

'° For more information on short-term disability benefits, see Jerline Thomp-
son, "Incidence and Type of Disability Insurance Benefits, 1988-90," Monthly
‘abor Review, July 1993, pp. 51-53.

17

tia plans.) Another third contributed a monthly amount per-
$100 of covered earnings, with the most common rate between
20 and 39 cents per $100 of coverage."

The degree of participation varied widely among the em-
ployee groups, with white-collar workers more than three times
as likely to have LTD insurance as blue-collar workers. How-
ever, some employees not covered under LTD insurance are
eligible for an immediate disability pension through their re-
tirement plan (see chapter 6).

Service requirements were imposed upon one-half of the
LTD participants before they were covered by their plan. About
two-thirds of participants with service requirements had to work
1 to 3 months before becoming eligible for benefits.

Long-term disability plans require a waiting period before
benefits begin. About one-third 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 re-
ceive LTD payments. For some participants, LTD benefits com-
menced after sick leave and sickness and accident insurance
benefits ended.

About 9 out of 10 participants received their LTD benefit 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 $2,501 and $10,000; the average
was $5,768.

About one-third of the participants were in plans that im-
posed a maximum on all sources of disability income. Such
ceilings affected benefits only if the amount payable from the
LTD plan plus income from outside sources, such as reha-
bilitative employment and all Social Security payments, ex-
ceeded a specified percentage (most commonly 70 or 75 per-
cent) of predisability earnings.

Survivor benefits, payable to an eligible dependent upon
the death of a disabled employee, were available in plans cov-
ering just over two-fifths of the LTD participants, These ben-
efits usually took the form of a lump-sum payment (most often
equal to three times the monthly LTD benefit) or a percent of
the monthly LTD benefit paid for a fixed number of months
(generally not more than 6 months).

Plans that included coverage for disabilities due to mental
illness covered about three-fourths of long-term disability plan
participants. However, the majority of these had limits placed
upon coverage. In most of these cases, benefits were provided
for a specified period (usually 24 months) and then ceased
unless the participant was institutionalized at the end of the
limiting period.

11 Covered earings are that portion of a worker’s eamings to which the re-
placement rate formula is applied. For example, if an LTD plan pays 60 percent
of earings with a maximum monthly benefit of $3,000, covered eamings would
‘be $5,000 ($3,000 is 60 percent of $5,000).



Table 84. Plan administration: Percent of full-time participants In selected employee benefit Programs by type of plan

sponsor, small private establishments, 1992

‘Sickness and Long-term 7 “
Pian sponsor Health care | Life insurance accident disability Defined benefit Savings and thrift
insurance insurance Le i
All participants
Total .... 100 100 100 100 100 100
Single employer .. 91 95 55 97 ral 100
Multiemployer* 7 4 5 1 27 -
Mandated benefits* iv] iv) 40 1 1 -
Employer association* 2 1 1 1 1 -
Professional, technical, and
related
400 100 100 400 400 100
95 97 62 7 88 100
3 () 1 1 6 -
Mandated benefits* 1 1 36 1 3 -
Employer association‘ 2 2 1 1 2 -
Clerical and sales
Total 100 100 100 100 100 100
Single employer 94 97 51 7 84 100
Multiemployer' 4 2 2 1 13 -
Mandated benefits! ) ) 46 1 1 -
Employer association’ 2 1 1 2 2 -
Blue-collar and service
100 100 100 100 100 100
86 91 56 97 54 100
Ww 7 7 3 46 -
- (v) 37 io] iv) -
Employer association* 3 1 1 ) - -

‘ Individual employers in the same or in a related industry contribut-
ing a negotiated amount to a trust fund providing benefits for employees.
covered under a collactive bargaining agreement.

® The majority of the participants with mandated sickness and acti-
dent insurance benefits were covered by State temporary disability in-
surance plans. The remaining employees were covered by the Railroad
Unemployment Insurance Act. Mandated defined benefit pension plan
Participants ware covered by Railroad Retirement Tier 2.

84

* Less than 0.5 percent.

* Band of small employers in a common trade or business, for exam-
ple, savings and loan associations. The plan sponsored by the associa-
tion is not negotiated with the employees.

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



Participation requirements

Medical care plans typically required that only a short eli-
gibility period, if any, be served by new employees before cov-
erage began. One-fourth of medical care plan participants were
allowed to join a plan immediately upon being hired. For par-
ticipants required to complete a minimum length of service,
the required period was usually 3 months or less.

Coverage for retired workers

Although the Consolidated Omnibus Budget Reconciliation
Act of 1985 requires employers to offer continued health care
benefits for employees who are retired, laid off, or otherwise
separated from employment, workers may be charged all of
the premium costs at group rates, In addition, the continua-
tion period stipulated by the law is limited.* The survey of
small private 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, 18 percent
worked for employers who financed, at least in part, medical
care protection after retirement. The vast majority of workers
were in plans that provided postretirement coverage regard-
Jess of their age. It was quite common to impose an eligibility
requirement for retiree coverage; this requirement was usu-
ally 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 ben-
efit provisions were reduced for some retirees upon reaching
age 65, more commonly there was no change in benefit levels
apart from coordination with Medicare.

Finally, it was more likely for the coverage to be partly paid
by the retiree than to be wholly employer financed. This was
true both for retirees under age 65 and those age 65 and over.

Employee and plan payments

The preceeding sections of this chapter have focused on
various benefit provisions found in employer-provided health
care plans. These data have been used by the Bureau of Labor
Statistics to create a model of employee expenses for selected
health care services.* The model incorporates benefit provi-
sions and selected scenarios of health care expenses, designed
to represent different levels of health care usage and different
types of health care services. The results of the model are esti-
mates of what the employee and the plan would pay over the
course of a year for specified medical services.

There are several factors that affect what percentage of total
medical care expenses are paid by the employee and the plan

% 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, employ-
es 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.

25 For more information regarding out-of-pocket expenses for medical services,
see Allan P. Blostin, Robert B. Grant and William J. Wiatrowski, “Employee
Payments for Health Care Services,” Monthly Labor Review, November 1992,
pp. 17-32.

38

during the course of the year. Two of the factors which will be
discussed in this section are the amount of expenses and the
type of health care provider.

Amount of expenses. In scenario 1, the employee had $673 in
total health care expenses (table 58). As described earlier in
this chapter, the majority of medical care participants are in
plans subject to overall limits only. In these types of plans, the
employee must satisfy an annual deductible and meet the co-
insurance requirement before any benefits are paid. In 1992,
the annual deductible averaged $220 and the individual usu-
ally had to meet a 20-percent coinsurance requirement.

With annual expenses of $673 in scenario 1, the deductible
and coinsurance requirements significantly affect what the
employee and the plan pay for health care expenses. In this
scenario, the employee and the plan share equally in the cost
of total health care expenses.

In scenario 2, the employee incurred $7,085 in total health
care expenses. In this scenario, the plan paid 83 percent of
total expenses, Because total charges in this scenario were much
higher than in scenario 1, the deductible had much less of an
effect on the employee’s cost. In addition, many health care
plans limit an employee’s liability for catastrophic expenses
which holds down out-of-pocket costs. Individuals with large
expenses are more likely to reach the catastrophic expense limit
(most frequently $1,000) than individuals with lower expenses.
After this limit is reached, plans typically pay 100 percent of
covered charges.

Type of health plan. The percentage of the cost paid by the
employee and the plan varied by type of health care plan. Table
58 shows that, in both scenarios, the employee paid a much
lower percentage of total expenses in HMO’s than in non-
HMO’s. In HMO’s, it was rare for enrollees to be subject to an
annual deductible or to be required to pay a portion of ex-
penses (coinsurance requirement) for health care services.
Doctor’s office visits frequently required a copayment, most
frequently $5 or $10 per visit. Most other services were gener-
ally covered in full. In contrast, non-HMO participants fre-
quently had expenses covered subject to an annual deductible
and a coinsurance requirement. Thus, participants in HMO’s
typically paid a lower percentage of total expenses than those
in non-HMO’s.

Dental Care

Dental care benefits were available to 33 percent of full-
time employees in small private establishments in 1992 (tables
59-64).% Among the three occupational groups, professional,
technical, and related employees had the highest percentage
of employees participating in dental plans (43 percent), and
blue-collar and service employees had the lowest percentage
of employees participating in dental plans (27 percent). Den-

25For tabulation purposes, plans that provided only preventive dental care hen-

efits were not included as having full dental care coverage. Data for preventive
dental care benefits are found in table 53.



Table 78. Defined benefit pension plans:' Percent of full-time participants by minimum age and associated service
requirements for normal retirement,’ smail private establishments, 1992

Protas: | Clerical | Blue-col| Prorey | Clerical | Bue-cot
All par- |technical,) 2nd | lar and All par |technical,| 2nd | lar and
‘Age and service requirement | 41 B ical, gales | service || Age and service requirement? | 1 © | sales | service
ipants |and relat-) ohic- | partic ticipants Jand relat-| Cettci. | partie
ed par- ed par-
ticipants | Pants | Pants ticipants | Pants | Pants
Total .. 100 | 100 | 100 | 100
|Age 60—Continued
No age requirement 3 1 2 4 || 35 years’ service .. 0) ) ) tv)
Fewer than 30 years’ service | 1 0) 1 2
80 years’ service 2 1 2 2 lage 62 31 18 24 41
36 years’ service io) - - o No service requirement 3 2 2 5
5 years’ service 6 7 7 8
Less than age 50 ) 1 - “ 10 years’ service . 3 3 3 4
Fewer than 30 years service | (‘) 1 - rv) 15 or 20 years’ service 9 1 E) 13
26 years’ service .. 2 - ) 5
Age 50 yl - oO oO 26-29 years’ service Yo oO 1 iy)
30 years’ service ) - 6 0 30 years’ service .. 4 3 1 8
35 years’ service .. 1 2 1 )
Age 55 2 2 2 3 :
No service requirement 0 ) 0) ()— |/Age 63-64 ) - o 1
Fewer than 30 years’ ser 1 1 1 0 5 years’ service oO - iv) 1
80 years’ service ... 1 1 1 2
lAge 65 50 63 55 40
Age 56-59 .. iv) oO iv) rV) No service requirement 25 4 29 15
10 years’ service 0) ~ - 0) 1-4 years’ service “ - 1 -
80 years’ service oO oO Oo “ 5 years’ service ... 13 15 18 9
6-9 years’ service 0) 1 1 S)
Age 60 ... " 14 14 8 10 years’ service .. 7 5 3 11
5 years’ service . 2 4 1 2 15 years’ service .. 2 iy) 1 3
10 years’ service 1 i) 1 2 || 20 years’ service .. 1 i) 2 0)
15 years’ service 1 1 v) 1 25 years’ service . 1 - 0 1
20 years’ service 4 1 6 1
30 years’ service 6 6 4 1 |[Sum of age plus service’ . 2 2 2 2
Equals fewer than 80 1 1 0 1
Equals 85 1 1 1 1
Equals 9 v) - 1 v)

‘ 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 earings, without reduction due to age.
5 If a plan had alternative age and service requirements, the earliest
age and associated service were tabulated; if one alternative did not
specify an age, it was the requirement tabulated.

* Less than 0.6 percent.

5 In some plans, participants must also satisfy a minimum age or

service requirement.

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

79



Table 54, Medical care benefits: Percent of full-time
contribution, small private establishments, 1992

Participants in contributory plans’ by type and amount of employee

Non-health maintenance

All plans. Health maintenance organizations organizations
Type and amount of contribution
Employee cover- Family |Employee cover} Family | Employee cover-| Family
age coverage? age coverage’ age coverage?
All participants
Total .. 100 100 100 100 100 100
Flat monthly amount 83 78 83 7 83 78
Less than $5.00 1 1 2 1 1 1
$5.00-$9.99 ... 2 ig) 2 - 2 rs)
$10.00-$14.99 .. 6 i) ? 1 6 i)
$15,00-$19.99 .. 8 1 "1 - 7 1
$20.00-$29.99 . 12 3 10 5 12 3
$30.00-$39,99 14 3 9 2 15 3
$40.00-$49.99 6 2 15 2 4 2
$50.00-$59.99 . 7 2 4 ° 8 3
$60.00-$69.99 .. 4 5 7 2 3 5
$70.00-$79.99 . 4 2 8 2 3 2
$80.00-$89.99 .. 2 3 3 3 2 3
$90.00-$99.99 . i) 2 - 2 1 2
$100,00-$124.99 . 1 4 1 6 i) 4
$125,00-$149.99 .. iv) 6 - 2 e 6
$150.00-$174.99 - 7 - 3 - 8
$175.00-$199.99 .. - 6 - 6 - 7
$200.00 or greater - 19 - 35 - 16
Composite rate* 16 "1 6 4 18 12
‘Amount varies by employee 9 6 5 4 10 6
Amount varies by earnings ... a) i) - () 1 0
Not determinable .... 8 16 12 18 7 16
Professional, technical, and related
Total 100 100 100 100 100 100
Flat monthly amount 7 7 66 69 80 78
Less than $5.00 1 1 1 - a) 1
$5.00-§9.99 2 ie) (o) - 2 iv)
$10.00-$14.99 7 i) 3 1 8 i)
$15.00-$19.99 8 io) 14 - 7 0
$20.00-$29.99 16 1 15 - 16 2
$30.00-$29.99 14 4 8 - 15 5
$40.00-$49.99 ... 5 3 4 6 5 2
$50.00-$59.99 6 3 4 - 7 4
$60.00-$69.99 4 5 9 1 3 6
$70.00-$79.99 4 1 4 3 5 1
$80.00-$89,99 2 6 iv) 4 2 7
$90.00-$99.99 rel 1 1 0 1
$100.00-124.99 i) 5 - 4 6 5
$125.00-$149.99 iv) 8 - 4 f7) 8
$160.00-$174.99 - 7 - 3 - 8
$175,00-$199.99 - 6 - 7 - 6
$200.00 or greater - 20 - 33 - 7
Composite rate* 9 6 2 1 "1 7
‘Amount varies by employee’ 12 8 18 10 12 7
Amount varies by earnings 0 (vy - iv} iV) 0
Not determinable 10 16 a 2 8 16

See footnotes at end of table.

56



Table 79. Defined benefit pension plans:' Percent of full-time participants by minimum age and associated service
requirements for early retirement,’ small private establishments, 1992

Profes- | Clerical | Blue-col+ Profes- | Clerical | Blue-cok
At par. technica, and. | lar and At per: |technioa,| 284 | lor and
Age and service requirement? | 4; Pat wiat| Sales | service || Age and service requirement? | All par | sales | service
icipants and relat-| ric. | pertich tiipants land relat| tc. | perish
od par. ts | pants ed par. | ‘pants
ticipants | Pant ps ticipants | Pants
Total too | 100 | 100 | 100
‘Age 56-59—Continued
Participants in plans permitting 10 years’ service .. 2 - 0) 5
early retirement 95 95 97 92
5 8 4
No age requirement 10 4 " "1 1 3 1
oO o iv]
2 3 3 1 0“ 1 ()
7 1 7 8 3 3 3
15 years’ service .. ) - vo)
Less than age 55 4 3 6 3
Less than 20 years’ Age 62 2 2 3 2
service ... 2 3 3 2 No service requirement® iy) iv) - o
2 i) 2 1 5 years’ service o - - 1
6-9 years’ service iy) - iv) oO
55 46 49 62 10 years’ service 1 2 2 1
3 2 3 2 15 years’ service iv) 1 iv) Oo
0 1 iy) Oo
15 13 15 17 || Sum of age plus service® 16 30 23 5
2 - 1 4 Equals 70 or fewer 12 27 20 -
10 years’ service 24 22 22 26 Equals 75 1 1 1
15 years’ service 7 3 6 10 Equals 76-79 .. iv) iv) - oO
2 2 2 2 Equals 80 1 1 1
iv) 1 - - Equals 85 2 1 1 3
1 2 1 -
[Participants in plans without early
2 - ) 5 |j retirement .... 5 5 3 8
0 - i)

*” Excludes supplemental pension plans.

? Early retirement is defined as the point at which a worker could re-
tire and immediately receive accrued benefits based on service and
earnings but reduced for each year prior to normal retirement age.

* if a plan had alternative age and service requirements, the earliest
age and associated service were tabulated; if one altemative did not
specify an age, it was the requirement tabulated.

“ Less than 0.5 percent.

Table 80. Defined benefit pension plans:' Percent of
full-time participants by selected plan features, small private
establishments, 1992

5 Where no service requirement is specified for early retirement, the
service required for full vesting, usually 5 years, applies.

® In most plans, participants must also satisfy a minimum age or serv-
ice requirement.

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

Table 81. Defined contribution plans: Percent of full-time

Profes-
all sional, | Ciaea Blueroellar
Item ‘nin technical, | and sales .
[Participants] sng related|participants| sec oe
participants Participar
Disability benefits
sel 69 52 54 87
‘Ad hoc increase given
between 1987-91 4 5 4 4
Cost-of-living increase
provided 4 4 6 2
Portability of plan benefits 19 9 9 ca)
Lump-sum distribution of
pension benefits at
retirement allowed 19 17 ral 7

* Excludes supplemental pension plans.

employees participating by type of plan, small private
establishments, 1992
Profes-
sional, | Clerical |Blue-col-
‘Atlem. | techn: | and | lar and
Type of plan royees |°@l: and} sales | service
Ployees | ‘related | employ- | employ-
employ-| ees | ees
ees
Savings and thrift. 14 20 7 9
Profit sharing . 16 18 19 14
Immediate cas! - ) iV) = 1)
Deferred benefits only 16 18 18 14
Combination ..... 10) iv) 10) 0
Employee stock ownership .. 1 1 1 1
Money purchase pension ..... 5 9 8 4
‘Simplified employee pension ... 1 1 1 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.

80



Table 27. Sickness and accident insurance: Percent of full-time participants with benefits based on percent of
earnings formula by maximum weekly benefit, small private establishments, 1992

Maximum weekly benefit
Data
Type of total | TO! | Less rane | rot
ype of payment otal | with | tees |$150 to]$200 to] $250 to|$800 to] $950 to|$400 to| $450 10}$500 or} een | avail:
maxi- | gig | $199 | S249 | $299 | $349 | sa09 | $44 | S409 | more able
mum
All participants
Total oo | 81 2| 42 2] 7 4 1 3 1 9| 1 1
Fixed percent of earings o7 | 79 2{ 42 2] 16 4 1 3 1 e| wz] o
‘Less than 50 0 - - - - - - - - ny :
50. 46 43 1 40 1 1 1 - 0 - Vv) 3 -
5 1 +1 - | © -| 0 1| - - - | 0 -
60. at} 10 1 1 1 1 2} - 2} 0 a| 1] ¢)
65. y/o} -] -] -} -] -] -] -] =) Q@] 0] -
§. ol@®} life] 2) 2) 2} =] =] -) a] o] -
67. 22 | 20 1 +1 0 14 1 1 1] - 1 2] -
70.. 4 4 - cv) 10) 0) 1) - Y Yo 2 Q -
%.. iv) QO - - oO - 1) - - ~ 1) Oo
80 Oo} o}] -] -; -] -Jorf -]o-]) =) @] OT -
Other percent 1 1 - - 0 - iv) - - - 0) 0) -
Percent of eamings varies 3 a) - - 1] - - - - 1 11a
Professional, technical, and
related
yoo) a2! () 34 2| 12 6| - 5 4/ a} 2] 0
a] a] 34 2| 12 6] - 5 1} 2] 11 0
39 a4 | () 33 | 1 - - oO - 0 5 -
2 2 - ~ -) 0 2 - - - - - -
20 n Yo 0) iv] 1 - 11 0 7 9) 0
2 2 - - - - - - - 2 +]
1 1} - 1) 0 - = = - - - 1} 0) -
a| 2] ¢ 1 1+ | 10 ai - 4| - 2 1] -
9 8 - - 0 - 0 - 0 1 6 iv] -
oO} -) =f =) =] =f =] -] =} 2] 2-1 &] -
+] - - - - - - - - - - 1] -
2) 2} -/] -]o} -];@] -] -] - 2} -| -
Percent of earnings varies 3 af} - - - - - - - - 1 2} -
Clerical and sates
Total . 100 | 80 +] 45 3| 15 3] - 3/0 wo} 2] ()
Fixed percent of earings .. 97 | 80 1] 45 3| 15 3] - 31, 0 9} ~] 0
Less than 50 0) - - - - - - : : . -| 0 2
50 47 | 44] 0 a | - 1] - - - - | 0 3| -
55 2 2| = 1/ -] 0 1| - - - -| 0 2
60 za] ou] 0 1 21 0 2| - 2} 0 4 9] -
65 QO Q - = - - - - - - Y 1) -
66 O10 -) 0 -| -| -/} =| -} -7 =] =] -
67 alow oo] © 1] 43 1) = a] - 1 3| -
70 6 5 = - 1 1) 0 - 0 - 3 1 x
75 1 rv) - - 10) - oO - - - - Oo «)
80 11 0 - - - - - - -| 0 1]
oO} 0 - - | 0 - - - - - - - -
Percent of earnings varies s/o] 0 - - - - - - -| 0 2| -

See footnotes at end of table.



Chapter 1. Incidence of Employee Benefit Plans

The Bureau’s 1992 Employee Benefits Survey of small pri-
vate establishments provides data on employee work sched-
ules 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, funeral, jury-duty,
military, parental, and sick leave; sickness and accident, long-
term disability, and life insurance; medical, dental, and vision
care; and defined benefit pension and defined contribution
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 understated.

Data also are collected on the incidence of several other
benefits, including severance pay, child-care assistance,
wellness programs, employee assistance programs, and edu-
cational assistance. In addition, information was obtained on
flexible benefits plans, reimbursement accounts, and unpaid
parental leave.

For the 1992 survey of benefits in small private establish-
ments, information was collected for both full-time and part-
time employees. (Employees were classified as either full-time
or part-time in accordance with practices of the surveyed es-
tablishments. 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 information presented in this bulletin describes the in-
cidence and provisions of benefits provided to full-time em-
ployees in small establishments. In addition, data on part-time
employees are included in chapter 8.

The majority of full-time workers within the scope of the
Employee Benefits Survey were provided? medical care ben-
efits, life insurance, paid holidays, and paid vacations (table
1). Newer benefits, such as child-care assistance and long-
term care insurance, were available to a minority of full-time
workers (table 2).

' There are a few exceptions to this general rule. The survey provides esti-
mates on the availability of postretirement medical care and life insurance, de-
pendent 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 avail: of coverage at group pre-
mium rates can be considered a benefit. In addition, reimbursement accounts,
salary reduction plans, and parental leave plans are tabulated even if there is no
employer cost involved, beyond administrative expenses.

? Data were collected on the number of workers “participating” in benefit
plans. All workers were considered participants in wholly employer-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—sequired an employee to pay part of the cost (contributory plans),
workers were considered participants only if they elected the plan.

Time-off benefits

Paid holidays and vacations were available to over 80 per-
cent of full-time employees in small establishments in 1992.
In contrast, paid military leave was provided to 21 percent of
workers and paid personal leave was provided to 12 percent of
workers‘. Half of the full-time workers received paid funeral
leave and formal paid rest periods, while 9 percent had formal
paid lunch periods.

In general, white-collar workers were more likely to receive
formal paid time-off benefits than were their blue-collar coun-
terparts, as seen in the following table:

Percent of full-time workers
White collar Blue collar

Paid holidays 91 4
Paid vacations 94 81
Paid funeral leave 58 43

When paid leave was provided, covered employees received,
on average:

¢ 9.2 holidays each year;

« Vacations of 7.6 days at 1 year of service, 13.5 days at 10
years, and 15.1 days at 20 years;

« 3.0 days of funeral leave per occurrence;

* 12.2 days of military leave per year;

« Jury duty as needed.

Unpaid maternity leave was available to 18 percent of all
full-time workers and unpaid paternity leave to 8 percent, 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 leave was about 3'/, months. 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 ac-
cident insurance, or both.

3 Tn addition to data on all full-time employees in small establishments, data
are presented separately for three occupational groups—professional, technical,
and related; clerical and sales; and blue-collar and service workers. This bulletin
often discusses the first two groups jointly as white-collar workers, in contrast
with blue-collar workers.

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



sions received benefits through a fee-for-service plan (table 35).

All participants eligible for vision benefits had coverage for
eyeglasses; with few exceptions vision care participants had
coverage for eye examinations. Three out of 4 vision care
participants had coverage for contact lenses.

Participants with vision care coverage generally had limits
placed on their benefits. Typically, vision care participants had
their coverage for eyeglasses and contact lenses subject to a
scheduled dollar allowance per benefit. Other plans often re-
quired an employee copayment or offered a discount on the
purchase of eyeglasses and contact lenses.

Eye examinations were commonly subject to either a dollar

40

maximum per visit, or the participant was required to pay a
small copayment per visit.

Finally, 14 percent of the medical participants were covered
for eye examinations only (table 53). This coverage was not
part of a regular vision care plan. Such limited benefits cov-
ered 69 percent of all participants enrolled in an HMO.”

» For more details on vision care benefits, see Rita S, Jain, “Employer-spon-
sored Vision Care Brought Into Focus,” Monthly Labor Review, September 1988,
pp. 19-23.



Contents—Continued

Tables—continued

Life insurance:
66. Method of determining amount of basic life insurance and
frequency of related coverages .....
67. Multiple-of-earnings formulas by amount of basic insurance and
maximum coverage provisions ....
68. Flat dollar formulas by amount of basic insurance
69. Average benefit amounts by specified annual earnings
70. Effect of retirement on basic coverage ....
71. Accidental death and dismemberment insurance by amount of benefit
72. Supplemental life insurance coverage ....
73. Length-of-service requirements for participation .

Retirement and capital accumulation plans:
74, Retirement and capital accumulation plan coverage.....
75. Combinations of defined benefit and defined contribution plans

Defined benefit pension plans:
76. Method of determining retirement payments
77. Selected formula-related plan features ....
78. Minimum age and associated service requirements for normal retirement
79. Minimum age and associated service requirements for early retirement
80. Selected plan features .....

Defined contribution plans:
81. Type of defined contribution plan ....
82. Cash or deferred arrangements: Employee contributions with pretax dollar:

Retirement plans:
83. Vesting provisions .......

Plan administration:

86. Flexible benefits plans and reimbursement accounts: Eligibility
87. Reimbursement accounts: Eligibility by expenses covered.

Full-time employees in small independent businesses, 1992:
88. Summary: Participation in selected employee benefit programs .
89. Other benefits: Eligibility for specified benefits .....

Benefits for full-time employees by union status:
90. Summary: Participation in selected employee benefit programs ..
91. Other benefits: Eligibility for specified benefits .....

Part-time employees in small private establishments, 1992:
92. Summary: Participation in selected employee benefit programs . on
93. Other benefits: Eligibility for specified benefits ............sssssssssseccessecessseccsssnecssssssessessnseeessen



In 1992, the annual deductible plus the annual maximum out-
of-pocket expense averaged $1,317 per individual.?

Plans with overall limitations often place a ceiling on the
amount payable by the plan, usually a lifetime maximum. In
1992, three-fourths of the participants in plans with overall
limitations had a lifetime maximum apply to their benefits. A
maximum of $1 million applied to seven-tenths of these par-
ticipants. Just under one-tenth of participants were in plans
with a lifetime maximum of greater than $1,000,000; the av-
erage of all maximums was $1,027,411. There were small vari-
ations in the average lifetime maximums between occupational
groups. Professional, technical, and related participants had
the highest average lifetime maximum ($1,063,431), while
clerical and sales workers had the lowest ($1,003,467). 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 ben-
efit provisions for hospital room and board charges (tables
41-42), Fifty-nine percent of full-time participants were in plans
where hospital room and board expenses were covered at a
percentage of the semiprivate room rate, generally at 80 per-
cent. In these types of plans, the individual was typically sub-
ject to a yearly deductible before the percentage rate would go
into effect. Fifteen percent of participants had hospital room
and board expenses covered at the full semiprivate room rate
for a limited period, followed by a percentage of the semipri-
vate room rate, almost always 80 percent.

Sixteen percent 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 without being subject to either a separate deductible or
separate dollar maximum. Such full service hospital benefits
were commonly provided by HMO’s.

Significant differences in hospital room and board cover-
age were evident by type of medical care provider. While just
under seven-tenths of HMO participants had hospital room
and board covered in full without any limitations, full cover-
age was virtually non-existent for hospitalization in non-
HMO’s.

Increasingly, medical care participants are being required
to pay a separate copayment for hospital care, to discourage
unnecessary hospitalization. Fourteen percent of participants
with hospital room and board coverage were subject to a sepa-
rate copayment. It was somewhat more likely for HMO par-
ticipants to be subject to a hospital copayment (18 percent)
than for non-HMO participants (13 percent).

When copayments were required for hospitalization, it was
most likely on a per admission basis. For non-HMO partici-
pants, these copayments usually ranged up to $200; HMO
participants were usually required to pay copayments between
$200-$300.

© This average is slightly different from the sum of the individual averages
because some participants have only an annual deductible or only an annual maxi-
mum out-of-pocket expense limitation. The combined average includes only those
participants with both provisions.

34

Alternatives to hospitalization

To help hold down the costs of medical care, a number of
plans provide coverage for less expensive alternatives to a hos-
pital stay. These alternatives include extended care facilities,
home health care, and hospices (table 34). Coverage patterns
typically differed between HMO and non-HMO participants.

Coverage for stays in an extended care facility was avail-
able to just over four-fifths of full-time participants. Extended
care facilities provide skilled nursing care, rehabilitation, and

convalescent services to patients requiring less intensive treat- -

ment than would otherwise be provided in a hospital. Seven-
eighths of HMO participants had coverage for stays in an ex-
tended care facility; one-fifth were in plans that provided un-
limited coverage. In comparison, although 8 of 10 non-HMO
participants were in plans that provided coverage for extended
care benefits, very few had full coverage.

Home health care, providing skilled nursing and related care
to patients in their own homes, was available to 80 percent of
participants. Home health care benefits were provided to virtu-
ally all HMO participants (99 percent); these benefits were
provided less extensively to non-HMO participants (77 per-
cent). The higher incidence of coverage for home health care
benefits in HMO’s occurs because federally qualified HMO’s
are required to provide this benefit. The vast majority of HMO
participants in the survey belong to federally qualified plans.
When home health care benefits were provided in HMO’s,
coverage was typically unlimited. Unlimited coverage was quite
rare in non-HMO’s,

Plans, especially non-HMO’s, often limited the duration of
stays in an extended care facility and the number of visits for
home health care services. 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 vis-
its per year.

Coverage for hospice care, another alternative to hospital-
ization, was provided to 57 percent of full-time participants.
A hospice offers nursing care and psychological support to
terminally ill patients, usually defined as having 6 months or
less to live. Plans often placed ceilings on maximum dollar
amounts payable during a hospice stay.“

Surgical coverage

Virtually all participants had medical plans that based pay-
ments for in-hospital surgery on the “usual, customary, and
reasonable” (UCR) charges for the particular procedure per-
formed.'* As was true with hospitalization, in-hospital surgi-
cal benefits were most likely to be covered at a specified per-
centage rate, usually after any required overall plan deduct-
ible. Fifty-two percent of participants were covered at 80 per-
cent of the UCR charges (tables 43-44). Twenty-four percent
of participants were covered for the full UCR charges .

Fora more detailed discussion on alternatives to hospitalization, see Thomas
P.Burke, “Altematives to Hospital Care under Employee Benefit Plans,” Monthly
Labor Review, December 1991, pp. 9-15.

'S The “usual, customary, and reasonable” charge is defined as being not more
than the physician's usual charge; within the customary range of fees charged in
the locality; and reasonable, based on the medical circumstances,



Table 12. Paid vacations: Average number of days for full-time participants by length of service and cash-in/carryover

provisions, small private establishments, 1992

Vacation days by Cash-in, caryover, ; Cash-in and No cashin or
oarten naqareaore All plans ‘or both Carryover only Cash-in only ‘canyover carryover

76 84 88 67 83 73

99 10.2 10.5 8.9 12 97

11.6 12.2 13.0 10.0 129 11.0

13.5 14.4 15.3 124 14.7 13.0

14.5 15.3 16.4 13.4 15.4 14.0

15.1 15.9 174 137 15.7 146

After 25 years 15.3 16.2 17.4 13.9 16.9 14.8
After 30 years? .. 15.4 16.3 175 13.9 16.0 14.9

+ Employees either are granted a specified number of days after
completion of the indicated length of service or accrue days during the
next 12 month period. The total number of days are assumed available
for use immediately upon completion of the described length-of-service
interval.

Table 13. Paid personal leave: Percent of full-time
employees by number of paid personal leave days provided
Per year, small private establishments, 1992

® The average (mean) was essentially the same for longer lengths of
service.

NOTE: Computations of average excluded workers with zero vacation
days.

Table 14. Paid funeral leave: Percent of full-time employees
by number of paid funeral leave days avaliable per
occurrence, small private establishments, 1992

Profes-
sional, | Clerical |Blue-col-
techni- | and | lar and

Profes-
sional, | Clerical |Blue-col-

Alem. | techni: | and | tar and

‘Number of days Alem |cal, and| sales | service Number of days peyees {el and] sales | service
Ployees | related | employ- | employ- related | employ: | employ-
employ-| ees | ees employ-| ees | ees
ees ees
Total . 100 | 100 | 100 | 100 Total 100 | 100 | 100 | 100
12 19 16 7 Provided paid funeral teave 50 60 56 43
2 3 2 2 1 day 2 1 2 3
5 7 7 2 2 days 5 5 5 6
3 5 3 1 3 days 30 3t 34 26
1 1 1 ') 4 days .... 1 2 1 fu)
1 1 1 ry) 5 days 4 6 4 3
More than 5 days .. 10) 1 1 Q More than 5 days 0 rv) 0 ru
No maximum speci 1 2 2 1 No maximum specifi 8 15 8 5
Varies by length of servi 1 1 1 () Number of days not available rv) Qo 0) 0)
Number of days not available 0 - - 0
Not provided paid funeral leave ....| 50 40 44 87
‘Not provided personal leave 88 81 84 93
Number of days varies by relation-
ship to deceased? wwe] 10 n 15 7

+ Less than 0.5 percent.

® Workers were provided as much personal leave as they needed.

2 The maximum number of days provided was included in the distribu-
tion of personal leave days.

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

* Less than 0.8 percent.

2 Workers were provided as much funeral leave as needed.

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

B



at the end of the year. White-collar workers were more likely
to have carryover provisions than blue-collar workers, who, in
turn, enjoyed an 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 provided to those
employees who could carry over unused vacation days. These
employees averaged about 2 more vacation 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 just over one-tenth of the full-time employees (table
13), Over twice the proportion of white-collar workers as blue-
collar workers received personal leave. Most commonly, em-
ployees provided personal leave were eligible for 1 to 5 days;
the average was 2.6 days per year. A few employees were pro-
vided as much personal leave as needed.

Paid funeral leave, jury-duty leave, and military leave. A
majority of white-collar workers and just over two-fifths of
blue-collar workers were eligible for paid leave to attend fu-
nerals of family members (table 14). About four-fifths of eli-
gible employees received a set number of days per occurrence,
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 included in the count of work-
ers 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 sepa-
rate funeral leave plan, employers may provide an informal ben-
efit or allow employees to use other types of paid leave, such as
paid sick leave days, to attend a funeral. (See chapter 3.)

Nearly three-fifths of 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 pay-
ments 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 ful-
fill military training or duty commitments, was available in
establishments employing one-fifth of the full-time employees
(table 16). The most common provision was 2 weeks off per
year, but 7 percent of workers were in establishments provid-
ing paid military leave as needed. For workers with a speci-
fied number of days off, military leave averaged 12.2 work-
days 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 18 percent of full-
time employees; 8 percent were eligible for unpaid paternity
leave (tables 17 and 18). White-collar workers were twice as
likely to be covered by such plans than were blue-collar work-
ers. Two percent of the workers had paid maternity leave; paid
paternity leave was virtually nonexistent.

Parental leave plans were defined as separate from an
employee’s other leave plans, such as sick leave and paid va-
cations, which might be used by a new mother or father. Un-
paid maternity and paternity leave generally could be taken
after regular paid leave was used, and could continue for a
fixed period of time. Employees had a reasonable expectation
of returning to their own or a similar job following leave, al-
though this was not always specifically guaranteed.

For plans that provided a fixed number of days of unpaid
leave, maximum benefits averaged about 34, months for both
maternity and paternity. The average varied slightly by occu-
pational group.

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

7 For additional details on parental leave plans, see Joseph R. Meisenheimer,
“Employer Provisions for Parental Leave,” Monthy Labor Review, October 1989,
Pp. 20-24.



Contents—Continued

Type of health plan .....
Dental care.
Vision care

Chapter 5. Life insurance ........
‘Types and amounts of benefit formulas
Coverage for older active workers and retirees
Related protection ..
Service requirement:

Chapter 6. Defined benefit pension and defined contribution plans....
Defined benefit pension plan:
Benefit formulas ...
Private benefits and Social Security payments ..
Maximum benefit provisions
Normal retirement
Early retirement.
Disability retirement .
Postretirement pension increases
Portability ...
Postretirement survivor benefits .
Preretirement survivor benefits ..
Defined contribution plans

Employee contributions
Employer-matching contributions.
Investment decisions ..
Withdrawals and loan:
Distribution.......
Profit-sharing plan:
Participation and vesting in defined benefit and defined contribution plans

Chapter 7. Pian administration
Plan sponsor....
Plan financing....
Flexible benefits plans and reimbursement accounts

Chapter 8. Benefits by selected characteristics ........+sssssscsssssesersevesssssssnsessnsanneessneessnessaneessasssnnees
Benefits in small independent businesses ..
Benefits by union status.....
Benefits for part-time employees

Appendixes:

A. Technical note......
B. Availability of the survey’s data base

vi

92
101



Bureau of Labor Statistics

Regional Offices

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FEGiOWy”
REGION Il
samen | hoe
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Region I Region IV Regions VII and VII

1 Congress Street, 10th Floor
Boston, MA 02114-2023
Phone: (617) 565-2327

Region Il
Room 808
201 Varick Street
New York, NY 10014-4811
Phone: (212) 337-2400

Region Ili
3535 Market Street
P.O. Box 13309
Philadelphia, PA 19101-3309
Phone: (215) 596-1154

1371 Peachtree Street, N.E.
Atlanta, GA 30367-2302
Phone: (404) 347-4416

Region V
9th Floor
Federal Office Building
230 S. Dearborn Street
Chicago, IL 60604-1595
Phone: (312) 353-1880

Region VI
Federal Building
525 Griffin Street, Room 221
Dallas, TX 75202-5028
Phone: (214) 767-6970

1100 Main Street

Suite 600

Kansas City, MO 64105-2112
Phone: (816) 426-2481

Regions IX and X
71 Stevenson Street
P.O. Box 193766
San Francisco, CA 94119-3766
Phone: (415) 744-6600



Table 61. Dental care benefits: Percent of full-time
participants by deductible provision,’ small private
establishments, 1992

Table 62. Dental care benefits: Percent of full-time
participants by yearly maximum amount of coverage,’ smail
private establishments, 1992

Profes-

sional, | Clerical |Blue-col-

‘Allpar | ‘e0hnt | and | lar and

Type of deductible? Pat |cal, and| sales | service

ticipants | related | partic | partici-
Partici- | pants pants:

Profes-
sional, | Clerical |Blue-col-
‘All par. | techni | and | lar and
Dollar amount? Pi service

4 cal, and| sales
ticipants | ‘elated | partici- | partici-
partici | pants | ‘pants

Total

100 | 100 100

‘Subject to separate dental
deductible?

Yearly deductible only ..

12 14 13 10
1 ro) 1 1
at 40 44 40
3 3 5 3
2 2 3 1
1 1 3 rv)
Lifetime deductible only 19) 1 o
$50 ... ) i) iy]
Over $50 . “ 1 o

Both yearly and lifetime
deductibles .. 3 4 2 2
Subject to overall plan deductible .... 1 2 1 1
No deductible .. 33 34 26 39

1 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 dures. If sepa-
tate 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.

Table 63. Dental care benefits: Percent of full-time
participants in plans with orthodontic benefits by lifetime
maximum amount of coverage, small private establishments,
1992

pants
Total 100 | 100 | 100 | 100
Yearly maximum specified? 85 85
Less than $500 1 6

3 4

1 iy)

4 9

iy) 1

51 45

3 4

14 14

iv)

$2,000... 6 8
Greater than $2,000 1 1

No yearly maximum ...

Average yearly maximum .. $1,105 | $1,165 | $1,143 | $1,030

* Includes all covered dental procedures except orthodontia, Amount
of maximum specified is for each insured person.

* Coverage for dental procedures may also be subject to scheduled al-
fowance, deductible, or coinsurance provisions in addition to maximum dol-
lar limitations,

* If separate yearly maximums applied to different procedures, the sum
of he 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, Dental care benefits: Percent of full-time
participants in plans with dental benefits by provision for
preauthorization of treatment, small private establishments,
1992

Profes-
sional, | Cletical |Blue-col-

‘Alper. | t9chni- | and | tar and

Dollar amount" cal, and) sales | service

ticipants| related | partici- | partici-
partici | pants | pants

Profes-
sional, | Clerical [Blue-col-
techni. | “and | lar and

ttem All Bat- | cal, and| sales | service

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

pants pants
Total 100 100 100 Total .. 100 100 100 100
Lifetime maximum specified 85 1 87 79 Preauthorization required 87 58 63 53
Less than $500 0 - 10) io) Minimum expense requiring
$500 7 8 5 9 preauthorization
$501-$749 . 2 3 1 4 Less than $100 0 v) = 0
$750 8 8 10 7 $100 8 12 " 4
1 1 2 1 $101 - $199 7 3 9 8
43 34 45 46 $200 20 23 23 7
2 2 2 4 Greater than $200 14 16 17 "1
7 30 19 6 Dollar amount not determinable .. 8 4 4 12
4 5 4 3

bs

No lifetime maximum 15 9 13

Average lifetime maximum .... | $1,078 | $1,154 | $1,103 | $995

* Coverage for orthodontia procedures may also be subject to sched-
uled allowance, deductible, or coinsurance provisions in addition to maxi-
mum dollar limitations.

® 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.

Preauthorization not required

* 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.

63



Table 19. Short-term disability coverage: Percent of
full-time employ: by participation in sickness and accident
insurance plans and paid sick leave plans, small private
establishments, 1992

Profes-
sional, | Clerical |Blue-col-
Allem.| techni- | andj far and
‘Type of plan loyeas | 2! and! sales | service
PloyeeS | related | employ- | employ-
employ-| ees | ees
ees
Total 100 | 100 | 100
With short-term disability coverage ..| 64 78 76 51
Sickness and accident insurance
only a] 10 5 5 16
Paid sick leave only a7 | 54 | 49 | 24
Combined sickness and accident
insurance/paid sick ieave 7 16 19 22 uW
‘Without short-term disability
coverage 36 22 24 49

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

18

Table 20. Paid sick leave: Percent of full-time employees by
type of provision, small private establishments, 1992

Profes-
sional, | Clerical |Blue-col-
‘Allem- | f90hni- | and | lar and
Provision H cal, and| sales | service
Ployees | related | employ- | employ-
employ-| ees | ees
ees
Total. 100 | 100 | 100 | 100
Provided paid sick leave 63 4 70 35
Sick leave provided of
‘An annual basis only’ 42 st 55 31
A per disability basis only* 5 10 7 2
Both an annual and per
disability basis 2 4 3 1
As needed basis® 4 8 5 2
Other basis* oO 1 - -
Policy not ave i) 6 iv) iv)
Not provided paid sick leave .. 47 26 30 65

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

* Employees eam a specified number of sick leave days for each il-
ness or disability. This number may vary by length of service.

* 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.

* 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.



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 certain plan feature.
For example, table 1 indicates that 71 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 percent
in these tables, with smaller percents indicating the availability of plan
features. For example, in table 35, 100 percent indicates those workers
with medical care plans and 68 percent indicates those workers with
medical care covered by a fee-for-service plan. A more detailed discus-

sion of data calculation is found in appendix A.



Table 26. Sickness and accident Insurance: Percent of full-time participants by type and duration of payments, small

private establishments, 1992—Continued

Type of payment

Total

Maximum weeks of coverage

Total

Less than
13

14-25

26

27-51

62

Greater
than 52

Varies by
service

Professional, technical, and
related—Continued

Percent of earnings varias
By length of disability .

Fixed weekly dollar benefit
Less than $10(
$100-$12¢
$125-$14
$150-$17.
$175-$199
$200-$22¢
$225 or more ..

Weekly dollar benefit varies
By earnings "
By service or length of disability |

Clerical and sales

All types...

Fixed percent of earnings
Less than 50

‘Other percent

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

Fixed weekly dollar benefit
Less than $100 ..
$100-$124 ..
$125-$149 ..
$150-$174 ..
$175-$199 ..
$200-$224 ..
$225 or more

‘Weekly dollar benefit varies
By earnings ...

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See footnotes at end of table.



Appendix A: Technical Note

Scope of survey

This survey of the incidence and characteristics of employee
benefit plans is collected jointly with the Bureau’s Employ-
ment Cost Index (ECI). The portion of the sample from which
these estimates are made covers all private sector establ-
ishments* in the United States employing fewer than 100 work-
ers at the time of sample selection®. All private sector indus-
tries 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 is identical to the 1990
survey of small private establishments. The surveys conducted
from 1979 to 1986 excluded most of the service industries and
included establishments 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 included
all non-farm private sector establishments that employed 100
or more employees. All surveys conducted from 1979 to 1989
excluded establishments in Alaska and Hawaii and part-time
workers,

Beginning in 1990, all surveys cover all full-time and part-
time workers in all 50 States and the District of Columbia. In
1990 and subsequent even-numbered years, data are collected
in small private establishments (those employing fewer than
100 workers) and State and local governments. In 1991 and
subsequent odd-numbered years, data are collected in medium
and large private establishments (those employing 100 work-
ers or more).

Tables A-1 and A-2 show the estimated number of estab-
lishments and full- and part-time employees within the scope
of the survey, the number of responding sample establishments,
and the number of sampled (and responding) occupational
quotes“ within those establishments that were actually stud-
ied for each major industry division,

* BLS defines an establishment as an economic unit that produces goods or
services (such as a factory or a store) at a single location. An establishment is not
necessarily a firm; it may be a branch plant, for example, or a warehouse.

? 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 em-
ployees are included in the survey, even if they employed more workers at the
time of data collection.

+ Data were collected individually for narrowly defined occupations that were
sampled within establishments. All of the employees in the detailed occupation
selected may not be surveyed, Data for a manageable number (group) of employ-
ces in the detailed occupation that included the employee position selected are
collected, This group is called a quote.

92

Occupational groups
Each of the narrowly defined occupations selected for study
is classified into one of the following three broad occupational

groups:

Professional, technical, and related. Includes professional,
technical, executive, administrative, managerial, and related
occupations.

Clerical and sales. Includes clerical, administrative support,
and sales occupations.

Blue-collar and service. Includes precision production, craft,
and repair occupations; machine operators, and inspectors;
transportation and moving occupations; handlers, equipment
cleaners, helpers, and laborers; and service occupations.

Employees excluded from the survey are the self-employed,
proprietors, major stockholders, members of a corporate board
who are not otherwise officers of the corporation, volunteers,
unpaid workers, family members paid token wages, persons
permanently disabled, partners in unincorporated firms, and
US. citizens working overseas.

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 peri-
ods, paid rest periods, paid holidays, paid vacations, paid per-
sonal 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 insur-
ance, medical, dental, and vision care, life insurance, defined
benefit pension plans, defined contribution plans, flexible ben-
efit plans, and reimbursement accounts.

Data were also collected on the incidence of the following
additional benefits: Severance pay, supplemental unemploy-
ment benefits, travel accident insurance, nonproduction cash
bonuses, prepaid legal services, child care, adoption assistance,
eldercare, in-house infirmaries, long-term care insurance,
wellness programs, recreation facilities, job-related and non-
job-related educational assistance, and employee assistance

programs,

Sampling frame

The list of establishments from which the sample was se-
lected (called the sampling frame) was the State Unemploy-
ment Insurance (UI) reports for the 50 States and the District



Table 85. Plan financing: Percent of full-time participants in selected employee benefit programs by source of financing,

small private establishments, 1992

Sickness and | Long-term Detined
aceident | disability | ee ae Me Ae” | to cna vertamiy [Ue insurance| benefit
insurance | insurance ployee y pension
All participants:

Total 100 100 100 100 100 100 100 100
Wholly em 65 81 53 27 58 31 83 97
Partly employer financed 35 19 47 73 42 69 17 3

Professional, technical, and
related

Total 100 100 100 100 100 100 100 100
Wholly employer financed 70 89 52 21 60 18 87 95
Partly employer financed .. 30 "1 48 79 40 82 13 5

Clerical and sales

Total 100 100 100 100 100 100 100 100
Wholly employer financed 60 83 5t 25 51 25 85 96
Partly employer financed .. 40 7 49 7 49 75 15 4

Blue-collar and service

Total 100 100 100 100 100 100 100 100
Wholly employ: 67 63 55 32 62 43 80 98
Partly employer financed . 33 37 45 68 38 87 20 2

Table 86. Flexible benefits plans and reimbursement
accounts:' Percent of full-time employees eligible, small
private establishments, 1992

Table 87. Reimbursement accounts: Percent of full-time
employees eligible by expenses covered, small private
establishments, 1992

Profes- 5 Profas-
sional, | Clerical | Bluecot- sional, | Clerical | Biuecol-
‘Alem | techni- | and | tar and Alem. | techn | and. | tar and
Coverage ployees [C2 and] sales | service Coverage cal, and| sales | service
related | employ- | employ- Ployees | ratated | employ- | employ-
employ-| ees | ees employ-| ees | oes
ees ees
Total oo | 100 | 100 | 100 Health care premiums 6s | 65 64 78
Health care premiums only 32 | 24 | 27 | 51
Provided flexible benefits and/or Health care expenses 62 | 6 | @7 | 43
reimbursement accounts .. 14 | 8 20 7 Dependent care ... sa | 66 | 6 | 36
Flexible benefits plan with
reimbursement accounts 2 3 4 0

Flexible benefits plan with no
reimbursement accounts

Freestanding reimbursement
accounts

Not provided flexible benefits or
reimbursement accounts ..

' Flexible benefits plans, also known as flexible compensation and
cafeteria plans, allow employees to choose between two or more benefits
or benefit options in determining their individual benefit packages. Reim-
bursement (flexible spending) accounts, which are used to finance benefits
or expenses unpaid by insurance or benefit plans, may be part of a flexi-
ble benefits program or stand alone (freestanding accounts). These ac-
counts may be financed by the employer, employee, or both. The em-
ployee contribution is usually made through a salary reduction arrange-
ment.

? 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.

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

85



Table 1. Summary: Percent of full-time employees participating’ In selected employee benefit programs, small private

establishments,” 1992

Profes- Profes-
sional, Blue- sional, Blue-
Aa em-| 26804 | Sng | colar A em-| tenn | Sng] colar
Employee benefit program poy ane. als | and Employee benefit program Boy ant. es, ont,
lated [OMY amp lated |°TMP2Y-lampoy-
jemploy-| @ jemploy- ees?
ccs’ cs?
[Dental insurance—Continued
74 || Family coverage:
at ‘Wholly employer financed 10 8 9 12
7 Partly employer financed .. 23 | 35| 28] 15
8
56 |[Lite insurance .. eo | 77 | 7] 83
43 || Wholly employer financed s3| os | @2| 42
47 Partly employer financed nH 10 aal 10
13
36 [Al retirement. 4s | s2| se] 38
1 .
Paternity leave «. © [Defined benefit pension .. ze} 2} | 2
Wholly employer financed a1 | 20] 24 | 410

Unpaid: Partly employer financed +} af oa] @
Maternity leave 18 27 20 13
Paternity leave 8 13 9 6 ||Defined contribution® 33 43 38 26

Uses of funds:

Sickness and accident insurance 26 | 24| 27 | 27]] Retirement’. 20 | op | a4 | 24
Wholly employer financed wl a7] ww; Wholly employer financed* v7] i] 9 | 45
Partly employer financed 9 W 9 Partly employer financed 12 18 15 8

Capital accumulation? ..... 4 5

Long-term disability insurance .. 23 31} 10 Wholly employer financed® 1 ro)
‘Wholly employer financed 18 2| 6 3 4

Partly employer financed ..

Medical care 71 78 | 6t
Employee coverag
Wholly employer financed
Partly employer financed 33 38
Family coverage:

Wholly employer financed
Partly employer financed .

8
8 88 Be

Employee coverage:
Wholly employer financed 19] 2] 19] 17
Partly employer financed . 14) 7] te] 10

Partly employer financed

Employee stock ownership ... 1 1

Money purchase pension ... 5 5

Simplified employee pension 1 1
[Stock option iv) -| 0 Vv)
[Stock purchase 1 2 2 -
{Cash only profit-sharing .. 6 iv) -| 0
Flexible benefits plans 2 al 4] 0
[Reimbursement accounts .... 14] 24 | 20 7

* 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
@ 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-
88 are counted as participants; retirees are excluded. ~

2 See appendix A for scope of study.

2 See appendix A for definitions of the occupational groups.

* 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.

7 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 moré plans were counted as par-
ticipants in wholly emptoyer-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, Excludes pure cash profit
sharing, stock option, and stock purchase plans.

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



Table 93. Other benefits: Percent of part-time employees
eligible for specified benefits, small private establishments,

1992
Profes-
sional, | Clerical |Biue-col-
techni- | and | lar and
Benefit asm cal, and| sales | service
Ployees elated | employ- | employ:
employ-| ees | ees
ees
income continuation plans:
‘Severance pay ... 4 6 1
‘Supplemental unemployment
benefits - Vv) -
Family benefits:
Employer assistance for child
care .. 4 1 (V)
Adoption financial assistance .. 2 ~ i)
Eldercare 2 1
Long-term - ) -
Health promotion programs:
In-house infirmary .. 5 1 1
Wellness programs . 1 3 1
Employee assistance programs .. 4 8 5
Miscellaneous benefits:
15 3 2
2 6 3
Nonproduction bonuses. 52 29 33
Prepaid legal services .. - 2 0
Education assistance:
Job related ... 18 "1 7
Not job related 2 2 1

" Less than 0.5 percent.

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

91



Standard error

2.8
2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0

Chart A-1. Generalized standard errors, small private establishments, 1992

Percent estimate



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

private establishments, 1992

Provision

Protes-
sional, | Clerical |Blue-col-
techni- | and | lar and

All par- 1
AW Pat | cal, and| sales | service
ticipants| related | partici | partici
partici. | pants | pants
pants

Total

With employer-financed retiree
coverage”

For retirees under age 65 only ..
For retirees 65 and over only
For all retirees ..

Benefits cancelied on retirement or
financed wholly by retiree ..

Data not available ..

100 | 100 | 100

18 19 20 16
2 2 2 2
0 1 iy)

16 17 7 14
82 81 80 84

* Plans providing services or payments for services rendered in the

hospital or by |
sion, or prescription drug coverage.

physician. Excludes plans that provided only dental, vi-

2 "Includes plans financed wholly by employers and plans financed

jointly by employers and employees,
> 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 58. Medical care benefits: Percent and dollar amount of

health care expenses paid by the individual and the plan for

selected services,’ by type of plan, full-time employees in small private establishments, 1992

Percentage paid Dollars paid
‘Type of plan

Total Individual Plan Total Individual Plan
Scenario 1: Total health care expenses = $673

100 604 49 $673 $397 $336

100 55.7 44.3 673 375 298

100 185 84.6 673 105 568
Scenario 2: Total health care expenses = $7,085

100 172 28 $7,086 S127 $5,868,

100 19.4 80.9 7,085 4,953 5,732

400 5A 946 7,085 382 6,705

* In scenario 1, a family of two had total health care expenses of $673,
consisting of 6 office visits ($37 each), 3 lab tests ($92 each), and 7
prescription drugs (825 each). In scenario 2, a family of four had total
health care expenses of $7,085, consisting of 8 office visits ($37 each), 6

lab tests ($92 each), 9 prescription drugs ($25 each), a 6-day hospital
confinement ($342 per day for room and board and $621 per day for
ancillary charges), and 6 physicians in-hospital visits ($39 each).

59

|
!



Chapter 5. Life Insurance

This chapter presents details of employer-provided life in-
surance protection, including the methods used to provide ba-
sic life insurance, the effect that age and retirement have on
insurance, and the availability and amount of coverage for an
employee’s dependents", The prevalence of such related cov-
erages as accidental death and dismemberment insurance, sur-
vivor income benefits, and supplemental life insurance are also
examined.

Life insurance was provided to just under two-thirds of all
full-time employees in small private establishments in 1992
(tables 66-73). Among workers with life insurance:

© 61 percent were covered by a flat dollar amount formula,
commonly between $10,000 and $14,999;

17 percent were required to contribute toward the cost of
coverage;

25 percent were in plans that continued coverage after re-
tirement;

39 percent had dependent life insurance protection avail-
able.

Generally, the cost of basic life insurance in small private
establishments was paid entirely by the employer. Where em-
ployee contributions were required, the majority were stated
as a composite 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, such as plans providing cov-
erage for health and life insurance at one monthly rate of $30.
The next most common method of specifying employee con-
tributions was a flat amount based on coverage, for example,
30 cents per $1,000 of coverage per month.

Types and amounts of benefit formulas

The most prevalent method for determining basic life in-
surance was a flat dollar amount of coverage. Such coverage
was provided to three-fifths of life insurance plan participants.
This type of life insurance was more prevalent for blue-collar
and service participants than among the other two occupa-
tional groups. The average flat-dollar amount of life insur-
ance coverage was highest for professional, technical, and re-
lated participants ($20,352); clerical and sales participants
averaged $14,801; and blue-collar and service participants
averaged $12,860.

3) For a detailed examination of the history of employer-provided life insur-
ance see Michael Bucci, “Growth of Employer-sponsored Group Life Insurance,”
Monthly Labor Review, October 1991, pp. 25-32. Also, for a summary of life
insurance benefits in the 1990 survey of small private establishments and govern-
ment, see Glenn M, Grossman, “Life Insurance Benefits in Small Establishments
and Government,” Research Summary, Monthly Labor Review, October 1992,
pp. 33-34,

65

Insurance protection of between $10,000 and $14,999 ac-
counted for two-fifths of participants in plans specifying a flat
dollar amount of insurance. A small percent of participants in
such plans had coverage of $50,000 or more; white-collar
workers, especially professional, technical, and related work-
ers, more often had these larger benefits.

Nearly two-fifths of full-time participants in small private
establishments were provided basic life insurance coverage
linked to their pay. Coverage of this type provides participants
with a level of protection that increases automatically with a
tise in pay. Such formulas were much more prevalent among
white-collar workers than among blue-collar and service work-
ers, The most common method of tying life insurance to pay
was to multiply the employee’s annual salary by a factor of 1
or 2 and round the product to the next $1,000. For example,
an employee whose annual pay was $32,700 would receive
$66,000 of coverage under a plan with a factor of 2 ($32,700
times 2 equals $65,400, which is rounded up to $66,000).

The average multiple-of-pay benefit formula was 1.5 times
pay with the average being somewhat higher for white-collar
workers (1.6 times pay) than for blue-collar and service work-
ers (1.3 times pay). Nearly half of all participants in these
plans had insurance equal to their annual pay. Three in 10 had
coverage equal to twice their annual pay.

Two-thirds of the full-time participants covered by multiple-
of-pay plans in small private establishments had limits placed
on the amount of life insurance available, The most prevalent
limits observed were between $50,000 and $499,999. A small
number of participants had limits of $1,000,000 or more.

In addition to data on specific benefit formulas, survey data
were used in 1990 to compute average life insurance benefit
amounts, based on assumed earnings levels. (The averages
are not yet available using 1992 data.) For the participants in
each life insurance plan, a dollar amount of benefit was com-
puted. These benefits were then averaged and weighted by
current participation. For participants with assumed annual
earnings of $35,000, the average available life insurance was
just over $30,000. The average benefit at this earnings level
was highest for professional, technical, and related employees
($42,000) and lowest for blue-collar and service employees
($20,000).

Expected life insurance benefits increase as annual earn-
ings increase because of the presence of plans linked to earn-
ings. For workers with assumed earnings of $55,000, the av-

32 For further details on these life insurance calculations, see Adam Z, Bellet,
“Employer-sponsored Life Insurance: A New Look,” Monthly Labor Review,
‘October 1989, pp. 25-28



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

Table 7. Paid holidays: Percent of full-time employees by
number of paid holidays provided each year, small private

1992 establishments, 1992
Profes- Profes-
sional, | Clerical |Blue-col- sional, | Clerical {Blue-col-
‘Alt par. | techn: | and | tar and ‘All em. | techni | and | tar and
ttem ticipants | C2, and] sales | service Number of days , cal, and} sales | service
telated | partici | partici- Ployees | Tetated | employ- | employ
partici- | pants | pants employ-| ees ees
pants ees
Paid holidays .. o2| to4| 97] 83 100 | 100 | 100
Paid vacation by minimum length of 82 94 90 74
‘service requirement: 1 1 Q 2
After 1 year? 76 | 96| 82] 64 (0) - 0 (0)
After 3 years 99 | 114] 101] 92 2 1 1 2
After 5 years 115 | 132 | 118] 106 2 1 1 2
After 10 years 135 | 156 | 139 | 124 °) 0) ) ¢)
After 15 years 145 | 165 | 151] 192 2 1 2 2
After 20 years 161 | 170 | 157 | 138 “) - - v)
Atter 25 years ... 153} 172]; 160 | 140 | 4 2 3 5
Atter 30 years’ .. 18.4 173 16.1 14.1 QO () - re)
18 14 19 18
+ Employees either are granted a specified number of days after com- n|] al ala
pletion of the indicated length of service or accrue days-during the next 12 1 i $ ¢
month period, The total number of days are assumed available for use im- 9 u 10 3
mediately upon completion of the described length of service interval. ; 2 : :
? Employees receiving vacation days, but none at 1 year of service, 8 12 +0 5
were included only for the service periods for which they receive vaca- ‘ ; t °
tions,
3" The average (mean) was essentially the same for longer lengths of o| a] 8 7
service. a 7 7 %
NOTE: Computation of average included partial days and excluded 0, 4, 0 9
workers with zero holidays or vacation days. ry | ¢ ‘
. 0 1a) 0 iv)
1 1 2 1
o}lola| -
QO 1 iv ()
More than 14 days 19) 1 Qo ()
Table 8 Paid holidays: Percent of full-time participants by Number of days not available ro) 0 0) CO
policy on holidays that fall on a regularly scheduled day off, ;
small private establishments, 1992 Not provided paid holidays 18 6 to es
Profes- ' Less than 0.6 percent.
sional, | Clerical |Blue-col-
Holiday pol All par- iechni an lar and NOTE: Because of rounding, sums of individual itams may not equal tc
fay policy ‘pants | Cah sales | service tals. Where applicable, dash indicates no em, in thi .
yy pol Ucpants| Sand | sales, | sonics appl indicates no employees in this category.
partici- | pants | pants
pants
Total .. 100 | 100 | 100 | 100
Holiday is not observed .. 7 5 7 8
Another day off is granted .. 75 a 7 ral
Additional day's pay in lieu of
holiday 4 3 3 6
Another day off or day's pay,
depending on when holiday falls...) 8 4 7 "1
«Another day off or holiday not
observed, depending on when
iday falls .... 3 6 5 1
‘Other provision applies" 1 io) ie) 1
Holiday policy not determinable .. 1 1 1 2

7 Includes plans where the policy differs by holiday.

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.



of Columbia. The reference date of the UI reports that were
sampled varies by industry from 1986 to 1991. This is due to
the nature of the sample selection and replacement, which is
described below. To make the sample represent establishments
that began business after the various industry samples were
selected, a sample of “births” (newly opened establishments)
was included for the first time in the 1992 survey.

Sample design

The sample design for the Employment Cost Index (ECT)
and this survey is a 2-stage probability sample of detailed oc-
cupations. The first stage of sample selection is a probability
sample of establishments, while the second stage of sample
selection is a probability sample of occupations within the
sampled establishments.

Establishment sample

The sample of 4,345 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 periodically over
a 4-year cycle. Bach year, new sample establishments are in-
troduced into the survey in selected industries and replace the
sample units that were previously selected in those same in-
dustries. Using this procedure, the entire sample is replaced
approximately every 4 years.

The sample of establishments is selected by first stratifying
the sampling frame by industry group, and then by region and
establishment employment. The industry groups usually con-
sist of 3-digit Standard Industrial Classification groups, as
defined by the Office of Management and Budget, which are
covered by the survey.

The number of sample establishments allocated to each stra-
tum (defined by industry) reflects the ratio of employment in
the stratum to employment in all sampling frame establish-
ments. Thus, a stratum that contained 1 percent of the total
employment within the scope of the survey received approxi-
mately 1 percent of the total sample establishments. Some in-
dustries are sampled at a higher rate than other industries be-
cause of publication requirements or highly variable data.

Each sampled establishment was selected from within an
industry group (stratum) with a probability proportional to its
employment. For example, consider two establishments: A and
B, with respective employment of 5,000 and 1,000. Establish-
ment A is five times more likely to be selected than establish-
ment B.

Occupational sample

At the beginning of each field visit by a Bureau field econo-
mist 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 occu-
pations. The number of occupations selected from an estab-
lishment varies from 4 in the smallest establishments to 8 in
the largest establishments. The probability of an occupation
being selected is proportionate to its employment within the
establishment. There were 7,830 (6,666 full-time and 1,164

93

part-time) second stage sample units (sampled occupations)
that reported data from the 2,491 first stage sample units
(sampled establishments) that cooperated in the survey.

The narrowly defined occupations are based on the Stan-
dard Occupational Classification (SOC) system defined by the
Department of Commerce. These narrowly defined occupa-
tions are then classified into the three occupational groups
shown in this bulletin.

Data collection

Data for the survey were collected by visits or telephone
calls by Bureau field economists to the sampled establishments.
To reduce the reporting burden, respondents were asked to
provide documents describing their flexible benefits plans, re-
imbursement accounts, defined benefit pension and defined
contribution plans, medical, dental, and vision care plans, and
insurance plans. These were analyzed by BLS staff in Wash-
ington to obtain the required data on plan provisions. Data on
paid leave generally were obtained directly from the employer
at the time of the visit.

Data were collected during the period of October 1991 to
November 1992, 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 Jeave plans; participated in medical, dental, and vi-
sion care plans; participated in insurance or retirement plans;
or were eligible for flexible benefits plans, reimbursement ac-
counts, or other selected benefits, With the exception of tables
2, 86, 87, 89, 91, and 93, counts of workers 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 work-
ers covered by individual benefit plans or plan provisions.
Percentages are calculated in three ways. One technique, fol-
lowed in tables 1, 3-5, 7, 9, 13-17, 19-21, 74, 81, 82, 88, 90,
and 92, shows the number of covered workers as a percent of
all workers within the scope of the survey; tables 2, 86, 89, 91,
and 93 show the number of eligible workers as a percent of all
workers,

A second approach is followed in tables 8, 10, 11, 18, 25,
26, 28, 29, 31-35, 53, 57, 60-62, 66, 70, 73, 75, 76, 78-80, 83-
85, and 87. These tables show the number of workers covered
by specific features in a benefit area as a percent of all employ-
ees who participate in that general benefit area. They answer
questions concerning the typical coverage provided to persons
with a given medical, dental, and vision care, insurance, de-
fined benefit pension, or defined contribution plan; for example,
the percentage of all employees with medical care who receive
mental health care coverage.

The third approach provides a close look at an important
plan feature (tables 27, 30, 36-52, 54, 56, 59, 63, 64, 67, 68,
71 and 72), such as, the percentage of all employees with acci-
dental death and dismemberment benefits who have coverage



Table 18. Unpaid maternity and paternity leave’; Percent of
eligible full-time employees by maximum duration of benefits,
small private establishments, 1992 -

Protes-
sional, | Clerical |Blue-col-
All eligi-| techni- | and | tar and

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

ees

Unpald maternity leave

Total 100 | 100 | 100 | 100
Under 4 month 2 2 2 3
1 month ... - - - -
Over 1 but under 2 months .. 35 32 28 45
2 months 19) iv) 19)
‘Over 2 but under 3 months .. 14 13 15 15
3 months 1 8 15 10
Over 3 but under 4 months .. i 1 1 1
5 4 6 4
5 6 6
Over 5 but under 6 months .. 2 3 1 1
6 months 16 25 22 4
Over 6 but under 12 months 1 1 3) 19)

42 months ... 4 10 a
Over 12 months @ is) io) 1
‘Average months a72 | 355 | 3.34

Unpaid paternity leave

Total .. 100 100 100 100
Under 1 month 2 3 2 2
4 month ... - - - -
‘Over 1 but under 2 months .. 33 37 22 40
2 months - - - -
‘Over 2 but under 3 months .. 7 13 20 7
3 months 16 15 22 12
Over 3 but 1 1 2 1
4 months 6 4 8 7
Over 4 but under 5 months .. 5 4 5 5
5 months - - - -
Over 5 but under 6 months .. 3 7 2 1
6 months 8 7 12 6
Over 6 but under 12 months 1 1 1 1
12 months ... 7 7 5 10
Over 12 months o}/ealealea

Average months 344 | 348 | 333

* Includes only plans that allowed a fixed number of unpaid leave days.
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.

15



Table 36. Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
amount of deductible,'small private establishments,

1992

Profes-
sional, | Clerical |Blue-co
‘All pare} techni} and | lar anc
Type and amount of deductible” | f° PRI | cal, and| sales | service
icipants | related | partic- | partici
partici- | pants | pants
pants.
i ee 100 | 100 | 100 | 100
Deductible specified 91 80 93 | 89
Deductible on an annual basis®... 90 | 90 | 93 | a8
Based on earnings* lv) iv) 1 iV)
Flat dollar amount eo | o0 | s2 | es

Less than $100 1 1 1 1
$100. 29 26 29 3
$101-$149 iv) i) 0 ~
$150. 9 13 9 7
iy) 0. 6 0
21 23 2 19
0 iy) 1) 6
14 1 14 5
6 1] 6 iy)
8 7 8
8 10 9 7

Deductible not on an annual
basis ..

No deductible ...

Not determinable

Average annual deductible .. $220 | $236] $222) $210

* 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 spacific 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 deduotibles are identical. {f 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
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 partic?
pant’s eamings. A typical provision is 1 percent of annual earnings with
maximum deductible of $150.

* 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 37. Medical care benefits: Percent-offull-time
participants in plans with overall limitations on benefits by
coinsurance rate, small private establishments, 1992

Profes-
sional, | Cierical /Blue-col-
techni- | and | tar and

Coinsurance amount eetts|cal, and| sates | service
pants) ‘elated | partic | partici-
partic. | pants | pants
Pants
Tradltional-tee-or service

Total 100 100 100

With coinsurance’ ..
Coinsurance rate*

0 89 20 20
1 1 1 1
2 1 2 4
4 5 5 4
1 y 1 1
2 4 2 1

100 | 100 | 100 | 100

86 69 87 83
82 34 31 32
3 4 2 2
48 60 51 44
3 1 3 4
1 1 1 1

Without coinsurance* 14 "1 13 7

* 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 $1,000, and then coverage is at 100 percent.

* A few plans have more than one coinsurance rate. In those cases,
the coinsurance rate shown is that which applies to the majority of bene-
fits under the plan.

* The overall coinsurance rate varies by specified dollar amount of ex-
penses. For example, 80 percent coverage up to $6,000 and 90 percent
thereatter.

* Less than 0.5 percent.

* Includes plans with overall benefit limitations, such as maximum dollar
amounts and deductibles, where the coinsurance rate is 100 percent.

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



Table 89. Other benefits: Percent of full-time employees Table 90. Summary: Percent of full-time employees
eligible for specified benefits, small independent businesses, participating’ in selected employee benefit programs, by
1992 union status, smail private establishments,’ 1992

Profes- Employee benefit Union Nounion
sional, | Clerical |Blue-col- program All employees | employees | employees
‘Alem. | techni | and | lar and
Benefit ovens {2 and| sales | service Paid holidays 82 80 83
Ploye2S | related | employ-| employ- Paid vacations 88 85 88
employ-| ees | ees Paid personal leave 12 2t 12
ees Paid lunch period 9 9 9
Paid rest period . 49 66 47
Paid funeral leave ... 50 66 43
Income continuation plans: Paid jury duty leave 58 63 87
Severance pay ... | 14 24 15 5 Paid military leave 24 18 21
Supplemental unemployment Paid sick leave 53 36 55
benefits |e) v) () ¢) Paid maternity eave 2 @) 2
Paid patemity leave 1 i) 1
Family benefits:
Employer assistance for child Unpaid matemity leave 18 27 7
care .. () 1 1 0 Unpaid paternity leave 8 17 8
Adoption financial assistance .. 1 2 1 ful
Eldercere 2 3 2 2 Sickness and accident i
Long-term 1 2 1 0) insurance 26 68 23 i
Long-term disability |
Health promotion programs: ingurance 23 24 22 |
In-house infirmary .. 2 5 2 1 Medical care "1 94 68
Wellness programs 2 5 3 1 Dental care 33 58 31
Employee assistance programs ..| 8 12 9 6 Life insurance . 4 87 62
Miscellaneous benefits: All retirement’ . 45 87 a H
Employer-subsidized recreation 22 at 16 \
facilities | 4 6 5 4 33 22 34
Job-related ;
insurance 18 7 5 a th 7
‘ * Participants are workers covered by a paid time off, insurance, or
Ronproduction bonuses bet i 5% “6 retirement plan. Employees subject to minimum service requirements
Eduoation cocistance: before they are eligible for benefit coverage are counted as participants
Nob rotated 28 43 33 a even if they have not met the requirement at the time of the survey. If
Not [ob relaisd 3 ; 4 3 employees ara required to pay part of the cost of a benefit, only those
who elect the coverage and pay part of the cost are counted as
participants.
* Less than 0.5 percent, 2 See appendix A for scope of study.

® Less than 0.5 percent.

* Includes defined benefit pension plans and defined contribution
retirement plans. The total is less than the sum of the individual items
because many employees participated in both types of plans.

Table 91. Other benefits: Percent of full-time employees
eligible for specified benefits, by union status, small private
establishments, 1992

Benefit All employees ome enon j

Reimbursement accounts) 44 6 15
‘Severance pay | 18 18 15

Employaa assistance

programs .. | 7 28 16
Job-related travel- |

accident insurance ....... 16 15 16 i
Nonproduction bonuses .| 47 3t 49
Job-related educational

assistance | 36 39 36

89



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

establishments, 1992

Type of maximum provision
With maximum Without maximum
Method Total coverage Plan maximum | Disability income |Pian and disability; coverage
only! maximum only’ | income maximum
All participants
All methods ... 100 89 51 3 36 4
Fixed percent of earnings 92 86 48 3 35 6
Less than 50 percent ~) rv) © 0 0) -
50 percent 6 5 2 1 3 1
55 percent 1 1 - 1 )
60 percent 61 57 35 at 4
85 or 67 percent 18 18 9 8 ()
70 percent 4 3 1 1 1
Other percent 1 1 ) - i) -
Percent varies by earings ... 7 3 3 - i) 4
Percent varies by service .. iv) i) i) iv) - i)
Percent varies during disability ) - - - - i)
Scheduled dollar amount varies by
earings 1 - - - - 1
Other... 1 - - - - 1
Professional, technical, and
rel
Ail methods 100 95 61 3 31 5
Fixed percent of eamings 96 92 5B 3 31 4
i) ie) is) i) - -
5 4 1 - 3 1
19) 19) = 19) iv)
64 63 43 1 19 1
20 19 cn ie) 8 ie)
8 4 2 2 9) 2
1 1 1 - 0 -
Percent varies by earnings 3 3 3 - v) a)
Percent varies by service ) ) ) - - )
Percent varies during disability 0 - - - - 0
Scheduled dollar amount varies by
earnings (a) - - - - 0

‘See footnotes at end of table.



Table 9. Paid vacations: Percent of full-time employees by amount of paid vacation days provided for selected periods of
service, small private establishments, 1992

Profes- Clea | Bue ol Profes- eri | Biel
" a lar anc , al
Vacation policy All'om: |techrical! sales | service Vacation policy seem, |tegncal| sales | sonvice
Ployees jane ‘employ: | employ- bi ‘employ- | employ
em | ees | ees on ees | 098
ployees
Total . too | 100 | .100 | 100
After 5 years of
Provided paid vacations" 88 a4 o4 8t service:—Continued
1 4 1 1
Vacation days by minimum 1 5 1 i)
length-of-service require-
ment®
19) - ie) 19)
After 1 year of service: 8 3 6 1
Under 5 days wnmnenn) — @ e a Q
& days .. 46 24 39 58 1 1 1
Over § and under 10 23 7 25 24
days 1 1 1 1 Over 10 and under 15
10 days 33 54 4B 16 days 2 2 1 2
Over 10 and under 15 15 days ~| 40 42 47 35
di 2 5 2 2 Over 15 and under 20
2 5 1 ie) 2 2 2 2
6 , 6 6 8 19 10 4
7 2 1
20 days 1 2 0 9
Over 20 days .. 1 2 1 6
After 3 years of service: i) - 0 0)
Under & a - a i) 8 3 6 "
12 5 @ 7
1 4 (9) 1
2 2 1 2 at 16 23 24
62 66 74 54
days 1 1 1 1
4 5 4 3 15 days | 3t 32 32 30
4 9 4 3 Qver 15 and under 20
| 2 2 3 1
1 2 1 O) 20 29 28 12
1 3 0 Q 4 9 3 2
1 2 1 ®
is) - 0 @
8 3 6 1
0 - 0 iy)
9 4 7 13 jays 1 1 ro) 1
10 days. “| at 16 23 at
1 2 1 2 Over 10 and under 15
45 38 50 44 days | 1 1 0 1
Over 10 and under 15 15 days | 26 27 or 28
days 3 3 4 2 Qver 15 and under 20
15 days 25 36 29 18 days J o4 2 1 1
Over 15 and under 20 20 days .. 22 31 29 14
days 1 2 1 e ‘Over 20 8 13 8 6

il



‘Table 53. Medical care benefits’: Percent of full-time participants by type of plan and
coverage for selected special benefits, small private establishments, 1992

Health maintenance | Non-health maintenance
Benefit item All plans ‘organizations ‘organizations
All participants

Hearing care’ .. 18 90 6
Routine physical examinations 28 98 16
Organ transplant 31 23 32
Well-baby care 37 97 27
immunization and inoculation 26 97 14
Birthing center 22 4 26

Preventive dental care* 1 9 iv)
Vision examinations only” 14 69 5

Professional, technical, and
rel

Hearing care* 20 90 9
Routine physical examinations 30 98 20
Organ transplant 31 18 33
Well-baby care a 97 32
Immunization and inoculation .. 25 95 14
Birthing center 24 4 27

Preventive dent 2 15 i)
Vision examinations only* 16 68 7

Clerical and sales

Hearing care® 19 96 7
Routine physical examinations 28 99 18
Organ transplant 31 26 31
36 97 27
25 98 14
23 3 26

1 9 o)
Vision examinations only* 15 7 6

Blue-collar and service

Hearing care 7 86 4
Routine physical examinations 26 98 13
‘Organ transplant 31 23 33
Well-baby care 35 97 24
Immunization and inoculation 26 98 13
Birthing center .. 19 5 22

Preventive dental care” 1 6 “
Vision examinations only® 12 64 2

* Plans providing services or payments for serv- and X-rays.

ices rendered in the hospital or by  physidian. Ex:
cludes plans that provided only prescription drug cov-

erage.
2’ Plans provide, as a minimum, coverage for hear-

ing examination expenses.

Includes plans that only provide examinations

55

* Less than 0.5 percent.
® Includes plans that provide only examinations.

NOTE: Where applicable, dash indicates no em-
ployees in this category.



Contents—Continued

Tables:

Full-time employees in small private establishments, 1992:

1. Summary: Participation in selected employee benefit programs 5
2. Other benefits: Eligibility for specified benefits 6
Work schedules:
3. Hours scheduled per week and per day 9
Paid time off:
4. Lunch time: Minutes per day 9
5. Rest time: Minutes per day . 9
6. Holidays and vacations: Average number of days 10
7. Holidays: Number of days provided each year .. 10
8. Holidays: Policy on holidays that fall on a regularly scheduled day off 10
9. Vacations: Amount provided for selected periods of service ll
10. Vacations: Length of service required to take vacation 12
11. Vacations: Unused vacation policy ..... 12
12. Vacations: Average number of days by length of service and unused
Vacation POlicy ........esssee 13
13, Personal leave: Number of days provided per year 13
14, Funeral leave: Number of days available per occurrence 13
15. Jury-duty leave: Number of days available per occurrence. 14
16. Military leave: Number of days available per year....... 14
Parental leave:
17. Parental leave policy...... 14
18. Unpaid maternity and paternity leave: Duration of benefits 15
Short-term disability coverage:
19, Participation in sickness and accident insurance plans and paid sick leave plans ..... 18
Paid sick leave:
20. Type of provision 18
21. Provision ...... 19
22. Annual plans: Average number of days at full pay 20
23. Annual plans: Average number of days at full pay by sickness and
accident insurance coordination ....... 20
24, Annual plans: Unused sick leave policy and carryover provisions 21
25. Length-of-service requirements for participation .... 21
Sickness and accident insurance:
26. Type and duration of payments 22
27. Benefits based on percent-of-earnings formula by maximum weekly benefi 25
28. Length-of-service requirements for participation .. 26
Long-term disability insurance:
29, Method of determining payment 27
30. Benefits based on percent-of-earnings formula by maximum monthly benefit 29
31. Benefit waiting period 30
32. Duration of benefits . 31



bonuses than union workers. On the other hand, union work-
ers were nearly twice as likely to be eligible for employee as-
sistance programs (table 91).

Benefits for part-time employees

Paid vacations and holidays were the benefits most com-
monly available to part-time workers, and insurance and re-
tirement protection was the least (table 92). Few part-time wor-
kers within the scope of the Employee Benefits Survey were
provided medical care, life insurance, private retirement plans,
or parental leave. In contrast, full-time employees in small
private establishments were nearly 4 times as likely to have
retirement plans and parental leave, and more than 10 times
as likely as part-time employees 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.

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.

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 vaca-
tions, paid holidays, and paid rest periods. Paid time off was
commonly prorated based on the work schedule of the part-

+ Employees are classified as full-time or part-time in accordance with the
practices of surveyed establishments,

87

time employee. For example, an employee working 4 hours
per day would receive 4 hours of pay for each vacation day
granted.

When paid time-off benefits were provided to part-time
employees, there were often significant differences between
the number of days off part-time workers and full-time work-
ers received, For example, part-time employees received an
average of 6.7 paid holidays per year, while full-time workers
received pay for 9.2 holidays.

Additionally, part-time employees received fewer paid va-
cation days than full-time. Part-time employees eligible for
paid vacations were granted an average of 9.5 days at 5 years
of service, compared to 11.5 days for full-time. At 20 years of
service, part-time employees averaged 11.3 days, while full-
time employees averaged 15.1 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 pater-
nity leave, either paid or unpaid, were rarely provided to part-
time workers,

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

Similarly, one-tenth of part-time workers were eligible to
participate in a retirement plan. As with full-time workers,
defined contribution plans were the most prevalent type of re-
tirement plans observed. Defined benefit pension plans were
seldom provided.

The incidence of other benefits, such as severance pay,
legal services, family-related benefits (including child care and
eldercare), and health promotion programs, was rare (table
93).



Chapter 4. Medical, Dental, and Vision Care

Medical Care

Medical care benefits were provided to 71 percent of full-
time employees in small private establishments in 1992. Among
the three occupational groups, professional, technical, and re-
lated employees, were the most likely to participate in medical
plans (83 percent), while blue-collar and service employees
were the least likely (61 percent).

Of those workers with medical care insurance:

e Just under one-half were required to pay a plan premium
for individual coverage; approximately seven-tenths paid
part of the cost for family coverage;

« One-third were covered by non-traditional medical care
plans, that is, health maintenance organizations (HMO’s)
or preferred provider organizations (PPO’s);

¢ Virtually all participants in traditional fee-for-service plans
were subject to an annual deductible; the average annual
deductible was $220;

» Nearly nine-tenths of participants in fee-for-service plans
had an annual limit on individual out-of-pocket expenses;
the average limit was $1,108;

¢ Mental health coverage, and alcohol and drug abuse treat-
ment, though available to nearly all participants, had more
restrictive provisions than other ailments;

¢ Seven-tenths of workers covered by non-HMO plans were
required to get preadmission certification before enter-
ing the hospital.

Coverage of selected categories of medical care

All of the participants in medical care plans had coverage
for hospital room and board, physicians’ visits in the hospital,
surgery, and x-ray and laboratory services. With few excep-
tions, coverage was provided for physicians’ office visits, men-
tal health conditions, and out-of-hospital prescription drugs
(table 34). Virtually all participants were covered by inpatient
alcohol 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
(18 percent of participants), routine physical exanis (28 per-
cent), well-baby care (37 percent), and immunizations and
inoculations (26 percent).

Funding arrangements
In 1992, two-thirds of full-time medical plan participants
in small private establishments were covered by a fee-for-ser-

32

vice medical plan (table 35). These plans pay for specific medi-
cal procedures as expenses are incurred. There are generally
three arrangements for financing plan benefits: Self-insured
plans, commercially insured plans, and Blue Cross/Blue Shield
plans. Self-insured plans (where the plan sponsor—typically
the employer—bore the financial risk for making plan pay-
ments) covered two-fifths of fee-for-service participants. Com-
mercially insured plans covered just over one-third of the fee-
for-service participants, while Blue Cross/Blue Shield plans
covered slightly more than one-fifth of the participants. In
addition, a small proportion of fee-for-service participants had
their benefits financed by more than one source,

Preferred provider organizations (PPO’s) covered 18 per-
cent of medical care participants in small private establish-
ments in 1992. PPO’s offer a higher benefit for services ren-
dered 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.

Fourteen percent of medical care participants covered by
the survey were enrolled in health maintenance organizations
(HMO’s). HMO’s provide a prescribed set of benefits to en-
rollees for a fixed payment. The HMO thus bears the risk as-
sociated with delivering care.» HMO’s are classified in this
survey as either group/staff, with services provided in central
facilities, or as individual practice associations (IPA’s), with
providers working from their own offices. The following tabu-
lation shows the percent of HMO participants by type of plan
in 1992:

Plan type Percent of
participants
Group/staff .. 37
Individual Practice Association. 34
Combination .. 9

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 under one of
four payment arrangements: Full coverage, coverage with in-
ternal (separate) limitations only, coverage with overall limi-
tations only, or coverage with internal and overall limitations
(table 34).

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



equal to their life insurance benefits. Tables 24 and 65 use a
combined approach, indicating in the first row of data the per-
cent of persons who have a particular coverage, while the re-
mainder of the table is based on all employees with that cover-
age. Table 77 uses both the first and second approaches to
provide selected plan features.

This multilevel approach has the advantage of clearly point-
ing 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 appropriate factors. For example,
to calculate the percent of all employees in plans specifying a
maximum payment for orthodontia, multiply the percent of
those with orthodontia coverage subject to a maximum (85
percent from table 63) by the percent of dental care partici-
pants with orthodontia coverage (61 percent from table 60),
and multiply that product by the percent of all employees who
have dental care coverage (33 percent from table 1). In this
example, 17 percent of employees are in plans that impose a
maximum on orthodontia payments (.85 x .61 x .33).

Tables 6, 12, 22, 23, 55, 58, and 69 differ from other tables
because they display average benefit values rather than per-
centages of workers. These tables present the averages for all
covered employees; calculations exclude workers without the
benefit.

Survey response
The following summary is a composite picture of the estab-
lishment responses to the survey:

Number of establishments:

In sample... 4,345
Out of business and out of scope 759
Refusing to respond... 1,095
Responding fully or partially... 2,491

There are three procedures used to adjust for missing data
from partial schedules and total refusals, First, imputations
for the number of plan participants are made for cases where
this number was not reported (approximately 7 percent of par-
ticipants in health, 7 percent in retirement and capital accu-
mulation plans, and less than 6 percent of participants in all
other types of plans). Each of these participant values is im-
puted by selecting a similar plan from another establishment
with similar employment in a similar industry. The participant
rate from this selected plan is then used to approximate the
number of participants for the plan that is missing a participa-
tion value.

Second, imputations for plan provisions are made where
they are not available in a partially responding establishment.
These plan provisions are imputed by selecting a similar plan
from another establishment with similar employment in a simi-
lar industry. The plan provisions from this selected plan are
then used to represent the plan that is missing plan provision
data. (This was done for about 4 percent of participants in

94

sickness and accident insurance plans, 9 percent of flexible
benefits plan participants, 45 percent of medical, dental, and
vision care participants, 21 percent of long-term disability in-
surance participants, 59 percent of retirement and capital ac-
cumulation plan participants, and 11 percent of life insurance
plan participants. Imputations were done for less than 1 per-
cent of the participants in paid leave plans.) Because of the
high plan provision imputation rate for some benefits, publi-
cation of detailed provision estimates was limited.

For other forms of missing data (totally unusable establish-
ments 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 de-
fined in a manner that groups establishments together that are
homogeneous with respect to the characteristics of interest. In
most cases, these cells are the same as those used for sample
selection,

One other form of missing data occurs when an establish-
ment cooperates in the survey but refuses all information con-
cerning one or more of the selected occupations. No adjust-
ment was made for these missing data for this survey; how-
ever, methods to impute for these data will be explored for
future surveys. If all sampled occupations in cooperating es-
tablishments had supplied the requested data, the estimates in
this bulletin would represent 47.9 million employees instead
of the 44.1 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 account for the establish-
ment nonresponse and a second post-stratification factor is
introduced to adjust the estimated employment totals to actual
counts of the employment by industry for the survey reference
date. These actual employment figures are obtained from the
State Unemployment Insurance reports for May 1992.

The general form of the estimator for a population total
Yis:

n'

£2;
oe

i=l

0 Yi
jel Pj
where:

n' = number of responding sample establishments;

0, = occupation sample size selected from the i*
establishment;

Y,, = value for the characteristics of the j* selected

occupation in the i® selected establishment;

the probability of including the i* establishment

in the sample;

P, = the probability of including the j* occupation in



In-hospital surgery was covered according to a schedule es-
tablishing a maximum amount payable for each procedure for
4 percent of full-time enrollees. Charges exceeding the sched-
uled maximums, however, were generally covered, subject to
the plan’s overall deductible and coinsurance.

Four-fifths of participants were in plans where outpatient
surgery was covered in an identical manner to in-hospital sur-
gery, whether in full, a percent of UCR charges, or subject to a
schedule of maximum payments. For HMO enrollees, both
inpatient and outpatient surgery were almost always covered
in full.

With the steady rise in costs of medical care, health care
insurers are encouraging enrollees to substitute less expensive
outpatient services, such as outpatient surgery, for inpatient
hospital services. Non-HMO health care providers have in-
creasingly begun to provide higher reimbursement rates for
outpatient surgery to encourage its use over inpatient surgery.'*
Twenty-three percent of participants in non-HMO’s had cover-
age for outpatient surgery treated differently (generally with a
higher reimbursement) than for inpatient surgery.

‘Two-thirds of medical care participants with coverage for
inpatient surgery had to satisfy either a separate deductible or
were subject to the overall plan deductible prior to receiving
benefits. When outpatient surgery was provided in those plans,
just under one-fifth of participants were not required to pay
any deductible before receiving benefits. Generally, when
deductibles are not applicable for in-hospital surgery, neither
are they applicable for outpatient procedures.

Cost containment

In addition to data on the extent of coverage for specific
medical services, the survey looked at the availability of medi-
cal 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 were developed to some extent in response to the
rapid rise in medical care costs during the 1980's.

Eighty-nine percent of medical care participants had some
“taanaged care” provision available to them (table 45). This
includes all participants in HMO’s and PPO’s, where care is
managed by directing patients to specific providers or services.
In addition, 84 percent of fee-for-service participants were in
plans that had at least one managed care feature, such as hos-
pital pre-admission certification, pre-admission testing, and
second surgical opinion.

Some advanced managed care programs can consist of four
or more features such as: Pre-admission review of all hospital
admissions for non-emergency or non-maternity care, concur-
rent review to monitor care while hospitalized, discharge plan-
ning to coordinate a continued course of treatment in more
appropriate health care settings, and mandatory second surgi-
cal opinions for certain selected procedures.

16 For more information on incentives for outpatient surgery, see Robert B.
Grant, “Outpatient Surgery: Helping to Contain Health Care Costs,” Monthly
Labor Review, November 1992, pp. 33-36.

35

Among the plan features studied in 1992 was the finding
that 71 percent of the non-HMO participants were required to
get authorization before being admitted to a hospital (table
46). When precertification was required prior to hospitaliza-
tion, a deductible per hospital admission or a reduction in the
coinsurance paid by the plan were the most prevalent penal-
ties for non-compliance. It was most common for the
deductibles to range between $200-$500. When the coinsur-
ance rate paid by the plan was reduced for participants who
did not seek approval before being hospitalized, it was most
likely to 50 percent of charges.

Less prevalent cost containment features in non-HMO plans
included incentives for the employee to audit hospital bills (8
percent) and more restrictive benefits for nonemergency week-
end admissions (15 percent). In plans where there were penal-
ties imposed for nonemergency weekend admissions, it was
nearly universal for no benefits to be provided.

Thirty-seven percent of participants had their care subject
to utilization review. Utilization review is the process of re-
viewing the appropriateness and quality of care provided to
patients. Benefit provisions for prehospitalization testing, a
means of decreasing the length of hospitalization, covered 53
percent of the non-HMO participants. Most plans covered 100
percent of charges for preadmission testing.

Innon-HMO plans, second surgical opinion provisions were
applicable to just over seven-tenths of participants with inpa-
tient surgical benefits (table 47). The majority of these plan
enrollees were assessed penalties for not obtaining second opin-
ions, generally applying only to selected procedures, The most
common penalty was to reduce the coinsurance rate if a sec-
ond opinion was not sought.

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

Preferred provider organizations

The previous section concentrated on managed care features
within traditional fee-for-service plans. This section will dis-
cuss PPO’s, that is, where care is managed by directing pa-
tients to specific providers or services.

PPO’s include incentives for receiving medical services
and supplies from designated providers, with certain medical
services more likely to be subject to these incentives than
others. For example, virtually all PPO participants had hospi-
tal room and board coverage treated more generously if care
was received at specified hospitals (table 48). In contrast, sur-
gery, physicians services and outpatient prescription drugs were
less likely to be subject to an incentive for using preferred
providers.

When a PPO option was available, it was nearly universal
for the plan to pay a higher percentage of expenses if the par-
ticipant received care from the designated providers. In such
plans, it was most prevalent for the plan to pay 90 percent of
covered charges if the individual used the PPO provider and