Table 3. Medical care benefits: Percent distribution of amount and type of employee contribution for family coverage,’ by
occupational category of full-time employees, medium and large private establishments, 1995

AM ees Professional, technical, | Clerical and sales | Blue-collar and service
and related employees employees employees
Type and amount of
contribution at | fo | Mo] an | NOG | HMO | an | 896 | HMo | an | Nom | amo
plans. plans plans | plans plans plans | plans plans plans | plans plans
Number with contributory ~
coverage (in thousands) ... .| 19,893] 13,843] 6,050] 6,671] 4,349] 2,322) 5,243) 3,464) 1,779] 7,979] 6,030] 1,949
Total with contributory coverage} 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100
Flat monthly amount 80 | 381 79 75 75 75 7) 7% | 8 87 88 | 83
Less than $20.00 4 4 4 4 5 3 2 2 3 5 5 5
$20.00 - 29.99 4 3 5 3 2 4 3 2 4 5 5 5
$30.00 - 39.99 4 5] 2 4 4 3 3 4 1 5 5 3
$40.00 - 49.99 4 4 3 4 3 5 2 2 1 5 6 4
$50.00 - 59.99 4 4 4 3 3 3 3 3 2 5 5 6
$60.00 - 69.99 6 7 4 7 9 4 5 6 5 6 7 4
$70.00 - 79.99 4 4 4 3 3 3 4 6 2 4 3 5
$80.00 - 89.99 4 5 3 5 6 3 4 5 4 3 3 1
$90.00 - 99.99 4 3 6 4 3 6 4 3 7 4 4 4
$100.00 - 124.99 13 14 "1 8 8 7 12 12 " 19 20 14
$125.00 - 149.99 8 7 9 7 7 7 9 8 13 7 7 6
$150.00 - 174.99 5 4 6 5 5 6 5 5 6 4 3 6
$175.00 - 199.99 6 7 4 7 7 5 7 7 6 5 6 2
$200.00 - 224.99 3 3 3 4 5 4 2 2 2 4 3 4
$225.00 - 249.99 2 2 4 2 1 4 4 4 4 2 1 4
$250.00 - 274.99 2 1 2 2 1]-2 2 1 3 1 1 2
$275.00 - 299.99 1 (?) 2 1 (2) 2 1 (?) 3 1 1 2
$300.00 or greater .. 3 2 4 3 3 3 2 2 3 3 2 5
Composite rates 1 1 (?) 1 1 (2) (?) 1 (?) 1 1 (?)
Varies .. 2 2 3 3 3 4 1 1 3 2 2 3
Other @)] 7 @) 7 @) 1 @ ] 2) @) | @) 1 @) 18) | -
Flexible benefits® 13 13 14 18 17 |. 18 15 7 1t 8 7 2
Percent of earnings 1 1 1 1 1 1} (7) (4) 1] () 11)
Exists, but unknown 3 3 3 3 3 3 5 6 5 2 1 2
Average® flat monthly
contribution in dollars .... .| 118.33] 112.18] 132.66] 120.42] 116.21] 128.28] 127.42] 119.84] 141.12] 111.56] 105.96] 129.85

1 Plans providing services or payments for services rendered in the
hospital or by a physician. Excludes plans that provided only dental, vision
or prescription drug coverage. if the amount of contribution varied by either
size or composition of family, the rate for an employee with a spouse and
‘one chiki was used. For a small percentage of employees, the employee
contributes the same amount for single and family coverage.

2 Less than 0.5 percent.

3 A composite rate is a set contribution covering more than one benefit
area, for example, health:care and sickness and accident insurance. Cost

data for individual plans cannot be determined.

4 Based on worker attributes. For example, employee contributions
may vary based on eamings, length of service, or age.

‘Amount varies by options selected under a “cafeteria plan" or

sponsored reimbursement account. ;
The average is presented for all covered workers and excludes
workers without the plan provision.

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

em

Compensation and Working Conditions Spring 1998 50


‘Table 2. Medical care benefits: Percent.distribution of amount and type of employee contribution for individual coverage,’ by
occupational category of full-time employees, medium and large private establishments, 1995

Professional, technical, Clerical and sales Blue-collar and service

All employees and related employees employees employees
Type and amount of
contribution at | fae | HMO | oan | Not Tmo | an | Nor | Mo | an | NOt | Hao
plans plans plans j plans plans plans | plans plans plans | plans plans plans
‘Number with contributory
coverage (in thousands) ... 17,230} 11,865] 5,365] 5,907] 3,838] 2,069) 4,654] 3,066] 1,589] 6,669] 4,962] 1,708
Total with contributory coverage} 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 {> 100 | 100 | 100
Flat monthly amount 78 | 78 | 7 | 72 | 72] 72 | 74] 72] 78 85 | 87 | 81
Less than $5.00 2 3 2 3 4 2 2 1 3 3 3
3 3 3 2 2 3 2 2 3 5 5 4
9 8 | 10 9 8 " 9 10 7 9 8 12
5 6 5 5 5 5 4 5 3 7 7 6
i9 | 20] 17 18 | 20 13 7 19 13 | 22] 21 25
13) 13] 1 12 13 10 13 13 13 13 14 10
2 12 " 7 6 8 13 9 19 15 7 8
5 6 4 4 5 3 5 5 6 6 7 3
4 3 5 5 5 5 4 4 5 2 1° 4
2 2 3 | 02 1 5 2 3 2 1 2] ()
1 1 2 2 1 4 1 1 2 1] () 1
1 1 1 1 1 1 1 (2) 1 1 1 1
$100.00 - 124.99 1] () 2 1 1 2 1] (@) 2 4] (2) 2
$125.00 or greater @) 7 AQ) @)] 171) ] @)] @) 5 @)] @) | @)
Composite rates 1 1] () 1 1] (?) 1 1] (2) 1 1] (7)
2 2 4 3 3 4 2 1 3 2 1 4
@1@r'@Q)) @) | 2 |G] @)] @) - @) | A] -
15 16 15 | 20] 20] 20 7 19 12 10 9 13
1 1 1 1 1 1 1] () 1 1 1] ()
3 3 3 3 3 3 6 7 5 2 2 2
Average§ flat monthly
contribution in dollars ..... 33.92] 32.91] 36.18] 34.84] 33.19| 37.89) 35.59| 33.71] 38.90] 32.22] 32.32] 31.88

1 Plans providing services or payments for services rendered in the ‘may vary based on eamings, length of service, oF age.
hospital o by a physician. Excludes plans that provided only dental, vision ‘Amount varies by options selected under a ‘cafeteria plan’ or
reimbursement account.

prescription drug coverage.
Less than 0.5 percent. The average is presented for all covered workers and excludes
nee, AeampDNRG Tale @ gat contrition cqveing more than one benef workers without the plan provision.
area, for example, health care and sickness and accident insurance. Cost
dat for individual plans cannot be determined. NOTE: Because of rounding, sums of individual items may not equal
4 Based on worker attributes. For example, employee contributions totals. Dashes indicate no employees in this category.

49 Compensation and Working Conditions Spring 1998


Chart 1. Percent of medical care plan participants required to contribute

to plan

costs, medium and large private establishments, selected years,

1980-95

Percent

100
90
80
70
60
50
40
30
20
10

(0)

Family coverage
ly coverage, ~~
ao —

Single coverage

1980

1981 1982 1983 1984 1985 1986 1988 1989 1991 1993 1995

Chart 2. Changes in employee average contributions for medical care,
medium and large private establishments, and the CPI-U for medical
care, selected years, 1983-95

1983=100

400.

350

300

250

200

CPI-U medical care

1984 1985 1986, 1988 1989 1991 1993 1995

51 Compensation and Working Conditions Spring 1998



Employee Medical

Care Contributions

on the Rise

BY ALLAN P BLOSTIN AND JORDAN N. PFUNTNER

The proportion of employees required to pay towards
the cost of their employer-sponsored medical insurance cov-
erage! rose steadily over the 1980-95 period. By 1995, two
in three employees with medical care coverage contributed
to the cost for single coverage, and nearly four in five were
required to help finance family coverage. These data relate
to full-time workers and are from the Bureau of Labor Sta-
tistics 1995 Employee Benefits Survey of medium and large
private establishments.”

These findings continue a trend that the survey has fol-
lowed since its inception in 1979-80. In 1980, the situa-
tion was dramatically different from that of 1995—only a
fourth of medical plan subscribers were required to con-
tribute for single coverage and just under one half contrib-
uted for family coverage. By 1982, a majority of enrollees
were required to pay for family coverage, and by 1991 a
majority had to help fund single coverage. (See chart 1.)

Whether employees had to contribute towards plan costs
varied by type of medical care plan and by occupation in
1995.3 (See table 1.) Workers enrolled in health mainte-
nance organizations (HMO’s) were more likely to pay the
cost of their coverage than were their counterparts enrolled
in other types of plans, such as fee-for-service and preferred
provider organization plans.* Seventy-six percent of HMO
subscribers were required to pay for single coverage, com-
pared to 64 percent of subscribers in other types of plans.
The respective figures for family coverage were 86 percent
for HMO’s and 75 percent for non-HMO’s. These findings
are similar to those of earlier surveys.

Blue-collar and service workers were less likely to be
required to pay for either single or family coverage than

Allan P. Blostin and Jordan N. Pfuntner are economists in the Dis
‘Compensation Data Analysis and Planning, Bureau of Labor Statisti
phone (202) 606-6240.

Albert E. Schwenk, an economist in the Division of Compensation Data
Analysis and Planning, prepared the tabulations for this article. John D.
Morton, also an economist in the Division, prepared the specifications for the
tabulations found in this article.

were their white-collar counterparts, a pattern that has en-
dured since the survey’s inception. In 1995, 56 percent of
blue-collar and service workers with medical insurance con-
tributed for single coverage and 67 percent for family cov-
erage. Among white-collar workers, in contrast, 78 per-
cent contributed for single coverage and 87 percent for
family coverage. There was little difference in contribu-
tion patterns between the two groups of white-collar em-
ployees studied.

Amount of employee contributions

In 1995, average employee contributions were $33.92
per month for single coverage and $118.33 per month for
family coverage.° (See tables 2 and 3.) These figures were
up 8 percent and 10 percent, respectively, from the aver-
ages recorded for the 1993 survey, and are in line with medi-
cal care inflation as measured by the medical care compo-
nent of the Consumer Price Index for All Urban Consumers
(CPL-U).

Approximately 80 percent of the employees had their
cost for single and family coverage based on a flat monthly
dollar amount. For single coverage, the majority of work-
ers (56 percent) with a flat monthly cost had their contribu-
tions range between $20.00 and $49.99. For family cover-
age, the range of flat monthly contributions was more widely
dispersed among the participants than under single cover-
age. One-fourth of the workers were required to pay be-
tween $100.00 and $124.99 for family coverage.

The next most prevalent type of contributory coverage
was based on flexible benefits; that is, the amount of con-
tributions varied based on the options selected under a “caf-
eteria plan,” or an employer-sponsored reimbursement plan.
For these plans, just over one-tenth of the workers were
required to contribute for single and family coverage.

Average required monthly contributions for single cov-
erage were about 10 percent higher for HMO participants
($36.18) than for non-HMO participants ($32.91). Required
monthly family coverage rates were about 20 percent higher

Compensation and Working Conditions Spring 1998 46


for HMO subscribers ($132.66) than for non-HMO sub-
scribers ($112.18).

Average required contributions varied about 10 percent
by occupational group. For single coverage, payments re-
quired of blue-collar workers ($32.22) were about $3 dol-
lars per month lower than for white-collar workers ($35.18).
Similarly, for family coverage, blue-collar contributions
($111.56) averaged about $12 per month lower when com-
pared to white-collar workers ($123.55). These differences
have persisted since 1991.

Average employee contributions have risen gradually
since 1983. In that year, single coverage contributions av-
eraged $10 a month and family coverage $33 a month. By
1995, required contributions were three and four times
higher for single and family coverage, respectively, than in
1983. During this same time, medical prices, as measured
by the medical care component of the CPI-U, doubled. Chart
2 depicts these trends, showing that employee contributions
increased at about the same rate as the medical care com-
ponent of the CPI-U up until the mid-1980s. Since then,
required employee contributions have outpaced the CPI-U.’

Similar data on employer costs for medical insurance
are available from 1991 through 1995 from the Bureau’s
Employer Costs for Employee Compensation program.
Among private establishments with 100 or more employ-
ees, employer costs per hour worked rose from $1.14 per

hour to $1.34, an increase of 18 percent. Over the same
period, average monthly required employee contributions
for medical care increased 28 percent for single coverage
and 22 percent for family coverage. However, these data
are only roughly comparable because of differences in the
measures; for example, the employer cost data include all
types of health care plans (medical, dental, vision), whereas
the employee contributions figures include only medical
plans.

Technical Note .

Employee contributions data were produced by a differ-
ent technique in 1995 than was used in earlier surveys. In
1995, a new microcomputer data capture system was intro-
duced, which changed many of the questions that were asked
about employee contributions. These changes, however,
are unlikely to have had a significant impact on the data.

More importantly, a new method for imputing missing
data was introduced in the 1995 survey. The use of this
new imputation method trimmed by half the amount of
employee contributions data being imputed. Employee con-
tributions data were imputed for about 15 percent of work-
ers with medical plans in 1995, about half the portion re-
quiring such imputation in 1993. The impact of this new
procedure on differences observed between the 1993 and
1995 published estimates is unknown.

—ENDNOTES—

' Medical plans provide coverage for a variety of services such as hospi-
‘talroom and board, surgery, physician visits, and diagnostic xrays and labo-
Tatory tests. Plans limited to dental or vision care are not included.

? The 1995 survey included establishments with 100 or more employees
in ail private industries except agriculture and households, covering 40 mil-
Jion employees, 33 million full-time and 7 million part-time, The 1994 sur-
veys included private establishments with fewer than 100 employees, and
State and local governments of all sizes, For.a summary of 1994 data, sce
Ann C. Foster, “Employee Contributions for Medical Care Coverage,” Com:
pensation and Working Conditions, September 1996, pp. 51-53. A 1996
survey will provide updated data for small private establishments, a 1997
survey will update the 1995 results presented here, and a 1998 survey of
State and local governments is planned.

> Itshould be noted that these comparisons of employee contributions by
type of plan and by occupation do not take into account possible differences
in medical plan benefits. For example, a plan with a high level of benefits
may call for higher employee contributions than a plan with a low level of
benefits.

* HMO’s provide a prescribed set of benefits to enrollees for a fixed
payment, and enrollees are normally limited to obtaining services from desig
nated HMO providers. Fee-for-service plans allow patients to choose any
Provider and pay for specific medical procedures as expenses are incurred.

47 Compensation and Working Conditions Spring 1998

Preferred provider organizations offer a higher level of reimbursement for
services rendered by designated health care providers, although enrollees are
free to choose any provider.

5 Averages are for workers required to contribute a flat amount. Workers
in plans where contributions varied (for example, where rates differed by
choices made under a flexible benefits plan) are excluded from the average
calculations,

* Average family coverage contributions for HMO’s were higher than for
nion-HMO’s in 1991, 1993, and 1995, ranging from 18 10 29 percent higher.
‘The difference in average single contributions, however, has varied from 13
percent higher for HMO’s in 1991, to 1 percent higher in 1993, to 10 percent
in 1995,

7 ‘These observations and chart 2 have been updated from the original
observations made by Ann Foster in “Employce Contributions for Medical
Care Coverage,” Compensation and Working Conditions, September 1996,
pp. 51-53. For data comparability purposes, chart 2 starts with 1983.

Note: Unless otherwise indicated, all comparisons made in this article
have been examined and found to be statistically significant at a 1.6 standard
error level or better, Standard errors, however, are not available for average
employee contributions; thus, comparisons of contribution amounts were not
evaluated for statistical significance.


Table 1. Medical care benefits: Percent distribution of requirements for employee contributions by type of fee arrangement and
Occupational category of full-time employees, medium and large private establishments, 1995

‘All employees Professional, technical, Clerical and sales Blue-collar and service

and related employees employees: employees
Contributory status
an | fie | HMO | an | NOt T Ho | an hwo | HMO | an | NO | ao
Plans | plans | Plans | plans | cians | Pans | plans | clang | Plans | plans | TA | plans

Number with medical care
coverage (in thousands)

-| 25,546] 18,501] 7,045) 7,467] 4,941) 2,525] 6,158] 4,145 2,013] 11,921] 9,415] 2,507

Single coverage
Total with single coverage for
medical care .... oe
Employee contributions not

requit
Employee contributions
required ...

Family coverage

100 100 j° 100 100 100 100 100 100 100 100 100 100

Total with family coverage for
100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100

22 25 14 W 12 8 15 16 12 33 Ko 22

78 i 86 89 88 92 85 84 88 67 64 78

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

Compensation and Working Conditions Spring 1998 48