Table 3. Percent of participants with selected benefits by source of financing, by private and
public sectors and full- and part-time status, 1994-95

Source of financing benefit empiyees| sector Public | Fulltime | Part time
100 1400 100 100 100
72 72 78 75 48
25 25 22 23 ~ 43
3 3 - 2 9
100 100 100 100 100
78 73 7 78 49
at 24 22 20 48
1 2 @) 1 3
100 100 100 100 100
(7) (?) 49 4 (?)
(@) @) 47 58 (?)
@) (7) 3 1 (7)
100 100 100 100 100
(?) (?) 23 20 (@)
(?) (?) 1 76 ()
(?) (?) 6 4 (7)
— 100 100 100 100 100
‘Wholly employer financed .. (?) (?) 64 @) (?)
Partly employer financed @) (?) 34 (?) (@)
Not determinable .... () (7) 2 (7) (@)
Family coverage .
100 100 100 100 100
Wholy employer financed (?) (?) 40 (?) (?)
Partly employer financed (2) (?) 55 (2) (?)
Not determinable ... (7) @) 5 (7) (?)
Life insurance
Total .... 100 100 100 100 100
‘Wholly employer financed 84 84 86 84 82
Parlly employer financed 15 15 4 15 16
Not determinable ... 1 1 - 1 2
Defined benefit pension
Total .... 100 100 100 100 100
Wholly employer financed 73 97 27 74 r4)
Partly employer financed 7 3 73 26 29
1 Less than 0.5 percent. NOTE: Because of rounding, sums of indivi) items may not
2 Data do not meet publication criteria. ‘equal total. Dash indicates no employees in this category.

Compensation and Working Conditions Spring 1998 60


Table 1. Percent of employees participating In selected benefits, by private and public sectors

and full- and part-time status, 1994-95
All Private Public A. m
Benefit employees} sector sector Full time | Part time
74 68 84 32
80 60 88 36
15 35 20 8
55 58 64 24
62 88 5 _ 83
25 69 37 9
44 86 59 15
Family leave .. 1 4 2 (2)
‘Unpaid time off
Family leave .... 62 58 89 69 36
Short-term disability coverage’ ... 33 36 20 38 16
Long-term disability insurance 25 25 27 31 3
Medical care ...... 61 58 79 73 13
37 34 58 45 9
63 60 80 76 13
S7 51 91 66 23
36 28 86 42 15
33 a 9 39 12
‘Savings and thrift .... ai 24 2 24 6
Deferred profit sharing 10 11 - Wi 4
Employee stock ownership 2 3 - 3 -
Money purchase pension .. 6 5 6 6 2
1 Prior to 1095, unfunded per-disabiity plans—where this change.
‘employees receive sick teave benefits for each Bness-were $ Lease than 0.5
reported as sick foave. Paid siok leave now includes only plans 3 Inckudes defined benefit pension plans and defined

that either specty @ maximum number of days por year or

contribution retirement plans.
unlimited days for sick leave. Short-term disability coverage now 4 The total is less than the sum of the individual items
includes ail i, i

in more than one plan.

because some employees.
and accident plans avaitable on a perdisabity basis, as well as NOTE: Dash indicates no employees in this category.

unfunded per-disablity plans. The 1994 data were computed fo

Table 2. Average’ annual number of days provided to participants in selected paid leave plans, by

private and public sectors and full- and part-time status, 1994-95

Paid leave plan empyees | corm Public | Fulltime | Parttime2
Holidays .... 8.6 82 11.4 88 7.0
Vacation days by minimum length
9.0 85 122 9.1 7.3
15.1 14.7 18.2 15.5 11.2
16.7 16.3 20.2 Al 13.3
77 17.2 218 18.4 14.0
3.0 3.0 29 34 23
3.3 3.2 37 3.3 3.1
14.0 13.9 14.1 14.1 12.6
1 The average shown is for covered ‘on thelr work schedule,
2 Leave time employees are usually prorated Funeral leave averages are per occurrence.

59 Compensation and Working Conditions Spring 1998


Table 4. Percent of employees eligible for selected benefits, by private and public sectors and full- and

part-time status, 1994-95
All Private Public :,
Benefit employees sector sector Full time Part time
Section 125 plans* 34 30 59 al W
Flexible benefits pt: 6 6 5 7 2
Severance Pay vse 22 21 27 26 7
‘Supplemental unemployment benefits 1 2 (?) 2 s (7)
Employer assistance for child care .. 5 4 9 5 3
Long-term care insurance 3 3 3 3 2
Wellness programs .... 19 16 32 22. 7
Employee assistance programs ......... Rd 31 65 41 19
Job-related travel accident insurance: 22 23 13 24 12
‘Nonproduction bonuses 37 38 31 42 19
Job-related education assistance 46 44 60 53 24
‘Non-job-related education assistance Wu 10 18 13 5
1 inctudes afl types of plans under Intemal Revenue Service Code 2 Less than 0.5 percent.

Section 125.

61 Compensation and Working Conditions Spring 1998


Employ

Employee Benefits

in the United States,

1994-95

BY ANN C. FOSTER

A majority of U.S. workers received paid holidays, va-
cations, life insurance, and medical care coverage in 1994-
95. However, few of them were eligible for supplemental
unemployment benefits, long-term care insurance, and
childcare assistance. Benefit availability differed by futl-
and part-time work status and by private and public sector
employment.

‘The employee benefits information in this article is based
on data from the 1994 employee benefits surveys of small
private establishments (those with fewer than 100 employ-
ees) and State and local governments, as well as the 1995
survey of medium and large private establishments (those
with 100 or more employees). These surveys cover 104
million employees (82 million full time and 22 million part
time) in the private and public sectors. The employee ben-
efits surveys are conducted by the Bureau of Labor Statis-
tics to obtain information on the incidence and characteris-
tics of employer-provided benefits.'

Types of benefits and coverage

The Employee Benefits Survey collects detailed infor-
mation about time-off, disability, medical and dental care,
life insurance, and retirement benefits. This article gives a
brief description of, and coverage information for, these
benefits, as well as for IRS Section 125 plans and other
selected benefits.

Time-off. The most common forms of paid leave available
to workers were holidays (73 percent) and vacations (77
percent). The least common was paid family leave (2 per-
cent). (See table 1.)

The average number of paid vacation days increased with
an employee’s length of service, ranging from 9 days after
1 year of service to almost 18 days after 20 years of service.
(See table 2.)

Ann C. Foster is an economist in the Division of Compensation Data
Analysis and Planning, Bureau of Labor Statistics. Telephone (202) 606-
6222.

Disability. Protection against loss of income due to
illness or injury was available to many workers. This
protection included paid sick leave, short-term disability
coverage, and long-term disability insurance.

Paid sick leave and short-term disability coverage
provide short-term protection.” Paid sick leave, available
to one-half of all workers, provides an employee with a
number of fully paid days per year to cover absences due
to illness or injury. Short-term disability coverage,
available to one-third of all workers, provides for salary
replacement, most often partial,? for a 6- to 12-month
period.

Long-term disability (LTD) insurance, provided to
one-fourth of all workers, replaces a portion of an
employee’s salary, but for a longer period than short-term
disability. LTD benefits are generally paid until the
disability ends or until retirement. In addition to LTD
benefits, many defined benefit pension plans provide
totally disabled workers with retirement income benefits
before the normal or early retirement age.‘

Medical and dental care. In 1994-95, 61 percent of all
employees were covered by a medical care plan. Among
full-time workers with coverage, 41 percent were in plans
with fully employer paid individual coverage, while 20 per-
cent were in plans with fully employer paid family cover-
ages (See table 3.) Thirty-seven percent of all employees
had dental care coverage.

Life insurance. A majority (63 percent) of all workers had
life insurance coverage. The amount provided was often a
flat amount or a multiple of the employee’s earnings. For
most covered employees (84 percent), benefits were entirely
employer financed.®

Retirement, Fifty-seven percent of all workers were cov-
ered by at least one retirement plan. Thirty-six percent of
all workers participated in defined benefit pension plans,
which use predetermined formulas to calculate retirement

Compensation and Working Conditions Spring 1998 56


benefits. About three-fourths of participants were in plans
that were entirely employer financed.

About one-third of all workers were covered by defined
contribution plans, which specify employer and employee
contributions, but not the level of future benefits. Savings
and thrift and deferred profit sharing were the most preva-
lent defined contribution plans.”

Section 125 plans. Section 125 of the Internal Revenue
Code governs flexible benefits plans, flexible spending (re-
imbursement) accounts, and premium conversion plans.®
In 1994-95, Section 125 plans were available to one-third
of all workers.

Six percent of all employees were eligible for Section 125
flexible benefits plans, often called cafeteria plans.’ (See table
4.) Flexible benefits plans allow employees to determine how
their employers’ contributions will be allocated among the
benefits offered. Employees are often able to purchase addi-
tional benefits on a salary reduction basis.'°

Other benefits. Among the other benefits studied, job-re-
lated education assistance was the most frequently offered.
This benefit was available to 46 percent of all workers. In
addition, non-job-related education assistance was avail-
able to 11 percent of all workers.

Two employer-subsidized health improvement benefits,
employee assistance programs and wellness programs, were
available to 36 and 19 percent, respectively, of all workers.
Employee assistance programs generally provide counsel-
ing and referral services for acute conditions, such as alco-
hol and drug abuse and emotional and financial problems,
that affect job performance. Wellness programs, which in-
clude physical fitness, smoking cessation, stress manage-
ment and weight loss seminars and programs, emphasize
prevention of problems that can lead to poor health.

Few workers were offered supplemental unemployment
benefits (1 percent), long-term care insurance (3 percent),
and childcare assistance (5 percent).

Full time versus part time"

Full-time workers were more likely to be offered ben-
efits than were part-time workers. Retirement benefits, for

57 Compensation and Working Conditions Spring 1998

example, were available to 66 percent of full-time employ-
ees compared to 23 percent of part-time employees.

Paid vacations and holidays were among the most preva-
lent benefits available to part-time workers. When these
benefits were available, they were usually similar to those
provided to full-time workers, but were prorated based on
the part-time worker’s hours. Part-time workers with paid
holidays averaged 7 days per year compared to 8.8 for full-
time employees. For part-time employees with vacation
benefits, the average days available ranged from 7.3 after 1
year of service to 14 after 20 years of service> For full-time
employees, these figures were 9.1 and 18.1, respectively.

Private versus public sector

The incidence of coverage for sick leave, medical and
dental care, and life insurance was much higher among
public sector workers than among private sector workers.
Another area with differing coverage was retirement in-
come with 91 percent of public employees covered com-
pared to 51 percent of private employees. Public employ-
ees were much more likely (86 percent) to be covered by a
defined benefit pension plan than were private employees
(28 percent). Most public employees with a defined benefit
pension plan (73 percent) had to contribute to its cost, while
few (3 percent) of their private sector counterparts were
required to do so.'2_ Public employees, however, were less
likely (9 percent) to be covered by a defined contribution
plan than were private sector employees (37 percent).

The incidence of benefits for paid holidays and vaca-
tions was higher in the private sector. The lower incidence
of vacation coverage in the public sector is due to the large
number of teachers who rarely receive paid vacations.
Among public employees with these benefits, however, the
average number of days available was higher than that for
their private sector counterparts.

Additional information

Benefits information tabulated by full- and part-time sta-
tus within the private and public sectors may be found in
“Employee Benefits Survey,” Compensation and Working
Conditions, Winter 1997, pp. 91-94.


—-ENDNOTES—~

* For more information, see Employee Benefits in Small Private Estab-
lishments, 1994, Bulletin 2475, Bureau of Labor Statistics, 1996; Employee
Benefits in State and Local Governments, 1994, Bulletin 2477, Bureau of
Labor Statistics, 1996; and Employee Benefits in Medium and Large Pri-
vate Establishments, 1995, Bulletin 2496, Bureau of Labor Statistics, 1997.

2 The definitions of paid sick leave and short-term disability coverage,
(previously called sickness and accident insurance) were changed in the
1995 survey of medium and large private establishments. Paid sick leave
now includes only plans that either specify a maximum number of days per
year or unlimited days on an “as needed” basis. Short-term disability cov-
‘erage now includes all plans previously categorized as sickness and acci-
dent insurance plans, as well as per-disability plans previously reported as
sick leave. For an explanation of these plans, see Hilery Simpson, “Short-
term Disability Benefits,” Compensation and Working Conditions, Sum-
mer 1997, pp. 52-56.

Data from the 1994 surveys were recomputed using these new defini-
tions, These new definitions mean that the sick leave and short-term disabit-
ity percentages shown in table 1 are not comparable to those reported for sick
leave and sickness and accident insurance, respectively, in previous years.

> Per-disability plans provide covered workers with a fixed number of
fully and partially paid days per disability. Plans previously included under
sickness and accident insurance generally replace only part of a covered
worker’s salary. For more information, see Simpson, “Short-term Disability
Benefits.”

* In 1994, 91 percent of full-time State and local goverameat employees

sions. Among full-time workers in medium and large private establishments
who were participating in defined benefit pension plans in 1995, 73 percent
had some form of disability retirement provisions.

5 For more information on employee costs.for medical care plans see
Allan P. Blostin and Jordan N. Pfuntner, “Employee Medical Care Costs on
the Rise,” in this issue, and Ann C. Foster, “Employee Contributions for Medi-
cal Care Coverage,” Compensation and Working Conditions, September
1996, pp. 51-53.

© For more information on life insurance benefits, see Ann C. Foster,
“Life Insurance,” Compensation and Working Conditions, Winter 1997, pp.
47-50.

7 For more information on defined contribution plans, see Ann C. Foster,
“Defined Contribution Retirement Plans Become More Prevalent,” Compen-
sation and Working Conditions, June 1996, pp. 42-44.

* Flexible spending accounts help employees pay for expenses, such as
childcare and medical care deductibles, not covered by other benefit plans.
‘Accounts may be financed with employer funds, employee pretax funds, or
both. Premium conversion plans are established solely for medical care plan
participants to pay their share of medical care premiums with pretax dollars.
For more information, see Foster, “Employee Contributions for Medical Care
Coverage.”

> A cafeteria plan is an employee benefit plan that offers an employee
certain choices in accordance with Internal Revenue Code Section 125. The
term “cafeteria plan” is often used interchangeably with flexible benefits plan.
However, a flexible benefits plan does not necessarily need to be a Section
125 (tax advantaged) cafeteria plan, but a cafeteria plan is a type of flexible
benefits plan. For more information, see Fundamentals of Employee Benefit
Programs, Fifth Editioa, Employce Benefit Research Institute, Washington,
DC, 1997.

© For more information on flexible benefits plans in medium and large
private establishments, sce Joseph R. Meisenheimer and William J. Wiatrowski,
“Flexible Benefits Plans: Employees Who Have a Choice,” Monthly Labor
Review, December 1989, pp. 17-23.

1 Employees are classified as fall or part time according to the practices
of surveyed establishments. Part-time employees are usually scheduled to
work fewer hours than full-time employees in the same work activity.

12 Employee contributions may be one reason why defined benefit pen-
sion plans, on average, replace a larger proportion of a public employee's
preretirement income than that of a comparable private sector employee. For
more information, see Ann C. Foster, “Public and Private Sector Defined
Benefit Pensions: A Comparison,” Compensation and Working Conditions,
Summer 1997, pp. 37-43.

Compensation and Working Conditions Spring 1998 58