U.S. BUREAU OF LABOR STATISTICS COMPENSATION AND WORKING CONDITIONS

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Comparison of Take-up Rates in Employer-Provided Medical Care Plans: State

and Local Government and Private Industry

by Marc Kronson

Bureau of Labor Statistics

Originally Posted: December 23, 2009

Data from the 2009 National Compensation Survey (NCS) reveal that take-up rates for employer-provided medical care plans

differ between private industry workers and State and local government workers. Take-up rates also vary among workers in

their respective private and State and local government sectors, by worker and establishment characteristics. This article

discusses the concept of a take-up rate and presents take-up rate comparisons among workers in two major sectors of the

economy, utilizing the March 2009 NCS estimates on take-up rates for employer-provided medical plans.

For the NCS, participation rate refers to the percentage of workers that are currently covered by a benefit plan. Participation

rate is a broad measure: the base includes all workers, regardless of whether they are offered a plan. Take-up rate is a more

narrowly defined measure than participation rate. Take-up rate refers to the percent of workers with access1 to a plan who

actually “take up,” or participate, in a plan.2 Workers who do not have access to a plan are arguably of different economic

circumstances than workers who have access but do not choose to participate. Take-up rates, while more narrowly defined

than participation rates, give valuable information on the pattern of participation only among workers who have access to a

plan. The NCS publishes take-up rates for several types of employee benefits.3

Caution must be used when comparing benefits estimates of workers in private industry with those of workers in State and

local government. The two sectors differ in industry and occupational mixes. For example, employment in the manufacturing

sector is more prevalent in private industry than in State and local government, and State and local government employs a

greater proportion of teachers than private industry. If the difference in employment patterns results in greater proportions of

lower wage workers in one sector than the other, and lower wages come with lesser benefits, these factors can, in turn, affect

the percentages of workers with access to a specific type of benefit.

Take-up rates do not account for eligibility requirements. There might be workers who meet the NCS definition of access but

who have not met the plans tenure or other eligibility standard and therefore cannot take up the plan. This could have a

greater impact on occupations with high turnover rates--janitors and waiters, for example--than among other occupations.

NCS data show that private industry workers do have lower access rates for medical plans than do workers in State and local

government.4 Is there, then, a difference between participation rates among only those who have access?

As can be seen in chart 1, 84 percent of workers in State and local government who have access choose to participate in an

employer-provided medical plan, while only 74 percent of private industry workers do so--a significant difference between the

two sectors.5
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What are some of the reasons for such a difference? One reason may be that State and local government employers, on

average, pay a greater share of medical plan premiums--90 percent for single coverage and 73 for family coverage--than

private industry employers, at 80 percent and 70 percent, respectively.6

Another reason may be that, of State and local government workers participating in single-coverage medical plans, 38

percent have premiums paid completely by the employers--significantly more than the 22 percent of workers in private

industry. Furthermore, for the remaining 78 percent of private industry workers who participate in a single-coverage plan that

requires an employee contribution toward the premium, the average flat monthly employee contribution is $92.43; this is

higher than the monthly contribution of $77.67 paid by (the remaining 62 percent of) State and local government employees.7

For family-coverage medical plans, 14 percent of State and local government workers have premiums paid completely by the

employer, a greater percentage than for the 12 percent of private industry workers; however, the average flat monthly

employee contribution is $349.36, not significantly different than the $342.50 State and local government paid.8

In addition to differences in take-up rates, medical plan share, and premiums between the government and private industry

sectors, there are differences in take-up rates among worker and establishment groups within these sectors. The charts that

follow show the differences among selected worker and employer groups in private industry and State and local government.

Chart 2 shows that take-up rates for employer-provided medical plans are higher in each of the five selected occupational9

categories among State and local government workers than among private industry workers. This difference may be due in

part to the higher share of premium costs that State and local government employers paid--whether for single or family

coverage--for workers in each of five occupational categories than private industry employers paid for the same five

occupational categories.10
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There is a notable difference in medical plan take-up rates for service occupations--85 percent in State and local government

and 63 percent in private industry. This may be due to the fact that State and local governments employ a wide variety of

relatively high-paid service workers, such as police officers and firefighters, while service occupations in private industry are

heavily represented with relatively low-paid janitors and restaurant food-service workers. These differences push average

wages for State and local government service workers higher relative to those in private industry. With higher wages, there is

a tendency toward greater benefits,11 resulting in a higher take-up rate for service workers in State and local government

than in private industry.

There are also notable differences in take-up rates between the two sectors in sales and office occupations (84 percent in

State and local government and 70 percent in private industry). This may be due to the fact that a large portion of private

industry sales workers are cashiers, who typically earn relatively low wages and have less access to employer-sponsored

benefits. State and local governments employ very few cashiers and other sales workers; they are more heavily concentrated

with office workers.

Within State and local government, 88 percent of natural resource, construction, and maintenance workers who have access

to a medical plan participate in it, a higher take-up rate than the 82 percent of workers in managerial, professional, and

related occupations.

Within private industry, 80 percent of natural resource, construction, and maintenance workers who have access to a medical

plan participate in it, a higher take-up rate than the 78 percent of workers in managerial, professional, and related

occupations and the 63 percent of service workers.

Chart 3 shows that full-time workers in private industry and State and local government have higher medical plan take-up

rates than part-time workers, in their respective sectors.
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Interestingly, the take-up rate for full-time workers in private industry (75 percent) is not statistically different than the rate for

part-time workers in State and local government (71 percent).

Chart 4 shows that there is no statistical difference in medical plan take-up rates among union workers in private industry,

union workers in State and local government, and nonunion workers in State and local government.
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Nonunion workers in private industry have a significantly lower take-up rate (72 percent) than union workers in private

industry (85 percent) and State and local government nonunion and union workers (83 and 84 percent, respectively).

Chart 5 reveals that in private industry, 80 percent of workers with the highest wages (the highest 10 percent) take up a

medical plan, yet only 50 percent of workers with the lowest wages (the lowest 10 percent) do so.12 Among State and local

government workers, 83 percent of those with the highest wages take up a medical plan, compared with 78 percent of

workers with the lowest wages.
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Perhaps more interesting is the fact that State and local government workers in each of the wage percentiles shown in chart

5 have higher take-up rates than their private industry counterparts. Among workers who have take up medical plans--

whether single or family coverage--State and local government employers paid a greater share of the monthly premium than

did private industry employers for workers in every published wage percentile except for workers with family medical

coverage in the lowest 10th wage percentile in State and local government; in the latter case there was no significant

difference in the share covered.13

Also, among workers participating in medical care benefits with flat-dollar amount contributory coverage, the amount private

industry employees paid for single-coverage medical plans was more than their State and local government counterparts

paid at all percentiles. Private industry employees paid more than State and local government employees for family-coverage

premiums in the 10th, 25th and 75th percentiles.14

Chart 6 shows the take-up rates of workers with access to medical plans, by the size of the establishment they work for.

State and local government workers took up plans at higher percentages than workers in private industry, in establishments

of the same size category.
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Within private industry, 71 percent of workers in small establishments (1-49 workers) take up medical plans, a lower rate than

the 78 percent of workers in large establishments (500 or more workers). However, within State and local government,

workers take up medical plans at about same rate,15 whether they were employed by a large government entity or a small

one.

In National Compensation Survey publications, a participation rate among only those workers with access to an employersponsored benefit is called a take-up rate. NCS data of March 2009 show workers in State and local government take up

employer-provided medical plans at a higher rate than workers in private industry. Take-up rates by workers wage

percentile and by occupational group are higher in State and local government than among their counterparts in private

industry. Also, nonunion workers in private industry have significantly lower take-up rates than union workers in private

industry and union and nonunion workers in State and local government.

Marc Kronson

Economist, Division of Compensation Data Estimation, Office of Compensation and Working Conditions, Bureau of Labor

Statistics.

Telephone: (202) 691-6201; E-mail: Kronson.Marc@bls.gov. Notes

1 For the NCS, an employee has access to a benefit if the benefit is available for the employees use.

2 Purely as a mathematical function, take-up rates are higher than participation rates because some workers have no access to a benefit plan,

lowering the denominator and therefore raising the take-up rate.

3 The NCS provides estimates for access, participation, and take-up rates for the following types of plans: medical, dental, vision, prescription

drugs, retirement, defined benefit, defined contribution, life insurance, long-term disability, and short-term disability. NCS take-up rates were

first published in National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2005, Summary 05-01,

August 2005, table 6, on the Internet at http://www.bls.gov/ncs/ebs/sp/ebsm0003.pdf. For more information on take-up rates, see Carl B.

Barsky, “Incidence benefits measures in the National Compensation Survey,” Monthly Labor Review, August 2004, pp. 21-28, on the Internet

at http://www.bls.gov/opub/mlr/2004/08/art3full.pdf.
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4 March 2009 data show that 88 percent of State and local government workers had access to an employer-provided medical plan, which is

significantly more than the 71 percent of private industry workers who had such access. See National Compensation Survey: Employee

Benefits in the United States, March 2009, Bulletin 2731, September 2009, table 9, “Health care benefits: access, participation, and take-up

rates,” on the Internet at http://www.bls.gov/ncs/ebs/benefits/2009/benefits_health.htm.

5 Comparisons in this article are made with a statistical test of the data at the 90-percent confidence level.

6 See National Compensation Survey: Employee Benefits in the United States, March 2009, Bulletin 2731, September 2009, table 10, “Medical

care benefits: Share of premiums paid by employer and employee,” on the Internet at http://www.bls.gov/ncs/ebs/benefits/2009/

benefits_health.htm.

7 See National Compensation Survey: Employee Benefits in the United States, March 2009, Bulletin 2731, September 2009, table 11, “Medical

care benefits, single coverage: Employer and employee premiums by employee contribution requirement,” on the Internet at http://

www.bls.gov/ncs/ebs/benefits/2009/benefits_health.htm.

8 See National Compensation Survey: Employee Benefits in the United States, March 2009, Bulletin 2731, September 2009, table 13, “Medical

care benefits, family coverage: Employer and employee premiums by employee contribution requirement,” on the Internet at http://

www.bls.gov/ncs/ebs/benefits/2009/benefits_health.htm.

9 NCS occupational definitions are based on the Standard Occupational Classification system (SOC), on the Internet at http://www.bls.gov/

soc/.

10 For source data, see National Compensation Survey: Employee Benefits in the United States, March 2009, Bulletin 2731, September 2009,

table 10, “Medical care benefits: Share of premiums paid by employer and employee.” Health benefit tables are on the Internet at http://

www.bls.gov/ncs/ebs/benefits/2009/benefits_health.htm.

11 See discussion of chart 5 in this article.

12 Wage percentiles describe the distribution of earning within published occupations. The percentiles designate position in the earnings

distribution within each published occupation, weighted by the scheduled hours of work. For example, at the median (50th percentile), half the

hours are paid the same as or more than the rate shown, and half are paid the same as or less than the rate shown.

13 For source data, see National Compensation Survey: Employee Benefits in the United States, March 2009, Bulletin 2731, September 2009,

table 10, “Medical care benefits: Share of premiums paid by employer and employee.” Health benefit tables are on the Internet at http://

www.bls.gov/ncs/ebs/benefits/2009/benefits health.htm.

14 See National Compensation Survey: Employee Benefits in the United States, March 2009, Bulletin 2731, September 2009, table 15, “Medical care benefits: Employee contributions for single and family coverage.” Health benefit tables are on the Internet at http://www.bls.gov/

ncs/ebs/benefits/2009/benefits_health.htm.

15 Not statistically different at the 90-percent confidence level.

Data for Chart 1. Medical plan take-up rate, private industry and State and local government workers, March 2009

Characteristic Medical

Private industry 74

State and local government 84

Source: National Compensation Survey: Employee Benefits in the United States, March 2009, table 9.

Data for chart 2. Medical plan take-up rate for selected occupational categories, private industry and State and local

government workers, March 2009

Worker characteristic Private industry State and local government

Management, professional, and related 78 82

Service 63 85

Sales and office 70 84

Natural resources, construction, and maintenance 80 88

Production, transportation, and material moving 76 84
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Data for chart 3. Medical plan take-up rate, full-time and part-time workers, private industry and State and local

government, March 2009

Status Private industry State and local government

Full-time workers 75 84

Part-time workers 56 71

Data for chart 4. Medical plan take-up rate, union and nonunion workers, private industry and State and local

government, March 2009

Status Private industry State and local government

Union workers 85 84

Nonunion workers 72 83

Data for chart 5. Medical plan take-up rate by percentile of worker's wage, private industry and State and local

government, March 2009

Percentile Private industry State and local government

Lowest 10 percent 50 78

Lowest 25 percent 57 81

Second 25 percent 71 86

Third 25 percent 78 84

Highest 25 percent 81 83

Highest 10 percent 80 83

Data for chart 6. Medical plan take-up rate by size of establishment, private industry and State and local government,

March 2009

Establishment size Private industry State and local government

1 - 49 workers 71 86

50 - 99 workers 72 85

100 - 499 workers 73 86

500+ workers 78 82

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