Health care continues to be

a topic of great concern

to many Americans.

Employers worry about the rising 

cost of the health insurance plans 

they offer their workers. Consumers 

worry that increasing out-of-pocket 

expenses make their budgets ever 

more vulnerable. This issue of 

Program Perspectives highlights 

how data from the National

Compensation Survey provide

useful information and context for

understanding the issues. Key

findings include the following: the

costs of employer-provided health

benefits have increased dramatically

since 1981—by approximately eightfold; State and local government 

workers have substantially higher 

access to health plans than private 

industry workers; and employers 

pay a lower percentage of health 

care premiums for employees

with family coverage than for

employees with single coverage.

The next two issues of Program 

Perspectives will feature paid leave 

benefits and retirement benefits,

respectively.

Trends in employer 

costs for health 

benefits

Employer costs for health benefits

for private industry workers

increased 4.2 percent for the

12-month period ending June 2008. 

These estimates do not reflect 

changes in costs to employees or 

adjust for changes in the plans 

available to employees; costs to 

employees have increased because 

of higher premiums, deductibles, 

and copayments. 

HEALTH

PAID LEAVE

RETIREMENT

HEALTH

continued inside►

Recent data on

employers’ costs and

employees’ access

O C T O B E R 2 0 0 8 O N H E A LT H B E N E F I T S

PERSPECTIVES

ROGRAM ISSUE 1

NATIONAL

COMPENSATION

SURVEY

Benefits Series

www.bls.gov/ebs

Welcome to the

inaugural issue of

Program Perspectives,

a new publication from

the U.S. Bureau of Labor 

Statistics in which BLS

programs showcase

their latest data.

U . S . B U R E A U O F L A B O R S T A T I S T I C S
CHART 1

0.3 percent in March 1996. 

Costs remained relatively flat for 

about the next year and then grew 

more and more rapidly for 5 years. 

Then, in June 2002, growth in

health benefit costs began to

decelerate; this slowing has

continued into the current period. 

(For further information on the 

Employment Cost Index, see

www.bls.gov/ect/sp/echealth.pdf.

Standard errors for the employer

cost changes are not available

for estimates prior to 1996 and

for the period from March 2003

to September 2006. Thus, the

Over the last 25 years, the 

growth in health benefit costs for 

employers has moved in fits and 

starts, as can be seen in Chart 1. 

In March 1983 health benefit costs 

recorded a 23.5 percent increase 

from a year earlier. After that, 

growth in costs decelerated for 3 

years, followed by 21⁄2 years of 

acceleration. In December 1988, 

another period of deceleration

began, a period that was slower 

and longer than the first—lasting 

over 7 years until employer costs 

for health benefits declined by

2 PROGRAM PERSPECTIVES • OCTOBER 2008

statistical reliability of some 

estimates within the series cannot 

be judged. See www.bls.gov/opub/

cwc/cm20030825ar01p1.htm.)

Access rates to 

health care benefits 

and participation in 

health plans

Seventy-one percent of private 

industry workers had access to 

employer-provided medical care 

benefits in 2008, while 87 percent 

of State and local government

workers had access. Access to

other types of health care benefits—

from cover page►

Employment Cost Index, private industry, 12-month percent change, 

health benefits and total benefits,* 1982–2008

24

21

18

15

12

9

6

3

0

-3

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Year

U.S. BUREAU OF LABOR STATISTICS

Percent

*Total benefits includes: paid leave, supplemental pay, insurance, retirement and savings, and legally required benefits.

Health benefits

Total benefits
dental care, vision care, and

outpatient prescription drug

coverage—also is shown in Table 1.

The take-up rate—the percentage

of workers with access who

participate in the plans—for

private industry was 75 percent

and for government workers was

83 percent. As shown in Table 2,

health savings accounts are

available to 8 percent of private

industry workers and 20 percent of

State and local government workers.

Health care reimbursement

accounts are more prevalent in

both sectors—33 percent for

private industry and 59 percent

for government. Wellness programs,

fitness centers, and employee

assistance programs are also

more prevalent in government than

in private industry. (For further

information, see www.bls.gov/ebs/

#bulletins.)

Costs per hour 

worked

Another way of analyzing 

health care costs to employers 

is to examine the cost per hour 

worked. In March 2008, State and 

local government employers paid 

$4.15 towards health care benefits. 

Private industry employers paid 

$1.92. (For further information, 

see www.bls.gov/ect.)

Employers pay a higher

percentage of the total premium 

for employees with single

coverage than for employees

with family coverage. In private 

industry, employers paid an

average of 81 percent of the total 

premium for single coverage and 

71 percent for family coverage.

TABLE 1

TABLE 2

continued on back page►

OCTOBER 2008 • PROGRAM PERSPECTIVES 3

Health benefits: access, participation, and take-up rates

for all workers, by private industry and State and local

government, March 2008 (in percent)

Selected benefit Private industry State and local

government

Health savings accounts 8 20

Healthcare reimbursement

accounts 33 59

Wellness programs 25 52

Fitness centers 13 23

Employee assistance programs 42 73

Access to selected health benefits, all workers, by private

industry and State and local government, March 2008

(in percent)

www.bls.gov/ebs

Access Participation Take-up rate

Private industry

Medical care 71 53 75

Dental care 47 37 79

Vision care 28 22 78

Outpatient prescription

drug coverage 68 51 75

State and local government

Medical care 87 73 83

Dental care 55 47 85

Vision care 38 31 81

Outpatient prescription

drug coverage 86 72 83
Access to a benefit plan. Employees are 

considered to have access to a benefit plan if 

it is available for their use. For example, if 

an employee is permitted to participate in a 

medical care plan offered by the employer, 

he or she is placed in a category with those 

having access to medical care, regardless of 

whether he or she chooses to participate. 

Participation in a benefit plan. Employees 

in contributory plans are considered to be 

participants in an insurance or retirement 

plan if they have paid required contributions 

and fulfilled all applicable service

requirements. Employees in noncontributory

plans are counted as participating regardless 

of whether they have fulfilled the service 

requirements. 

Take-up rate of a benefit plan. The take-up

rate is the percentage of workers with access

to a plan who participate in the plan. Take-up

rates are computed by dividing the number 

of workers participating in a plan by the 

number of workers with access to the plan, 

multiplying by 100, and rounding to the 

nearest 1 percent. 

Health savings accounts (HSAs). These are

accounts that allow employees to pay for

future medical expenses with tax-exempt

contributions. HSAs must be used in

conjunction with employer-provided,

high-deductible health plans with an annual

maximum limit on out-of-pocket and 

deductible expenses. Other features include 

the rollover of unused contributions, the 

portability of accounts, and tax-free interest.

Health reimbursement accounts (or flexible 

spending accounts). These are accounts 

that provide employees the opportunity to 

allocate pretax amounts for out-of-pocket 

qualified expenses, including deductibles, 

copayments, and other health care costs not 

covered by their health insurance.

Wellness program. A wellness program is a 

structured plan, independent from health

insurance, that offers employees two or 

more of the following benefits: smoking 

cessation programs, exercise/physical 

fitness programs, weight control programs, 

nutrition education, hypertension tests, 

periodic physical examinations, stress 

management programs, back care courses, 

or life style assessment tests.

Employer assistance program. This is a 

structured plan, independent from health 

insurance, that provides employee referral 

services, or referral and counseling services, 

concerning alcoholism, drug abuse, marital 

difficulties, financial problems, emotional 

problems, and legal problems.

State and local government

employers paid 90 percent of the 

premium for single coverage and 

73 percent for family coverage.

When comparing benefit costs

in private industry with those

in State and local government,

it is important to note that some

from page 3►

TABLE 3

Selected benefit Private industry State and local 

government

Single coverage

Average employer premium for all 

workers with coverage $309.03 $399.86

Share of premium paid by employer 81% 90%

Family coverage

Average employer premium for all 

workers with coverage $708.83 $794.72

Share of premium paid by employer 71% 73%

Medical plans: average monthly employer premium and

share of premium paid by employer, by single coverage 

and family coverage, for all workers, by private industry 

and State and local government, March 2008

of the differences between them 

are due to variations in work

activities and occupational

structures. For further information

see: “Compensation Cost Trends

in Private Industry and State

and Local Governments” at

www.bls.gov/opub/cwc/archive/

fall1999art2.pdf. ●

GLOSSARY

For additional assistance on 

benefits, contact one of our 

information offices:

NATIONAL: WASHINGTON, DC

(202) 691-6199 TDD: (800) 877-8339

NCSinfo@bls.gov www.bls.gov/ebs

REGIONAL:

ATLANTA

(404) 893-4222

BOSTON

(617) 565-2327

CHICAGO

(312) 353-1880

DALLAS

(214) 767-6970

KANSAS CITY

(816) 285-7000

NEW YORK

(646) 264-3600

PHILADELPHIA

(215) 597-3282

SAN FRANCISCO

(415) 625-2270