An official benefit communication system may be less important in smaller firms. Unions Employers often do not directly determine benefits for unionized employees but provide the necessary financial support to maintain union contracted employee benefit programs. Nineteen percent of firms reported union employees. Of these employers, an average of 61 percent of their employees belong to a union. This is in contrast to fully-insured contracting where the organization forms a relationship with an outside entity such as an insurance company or HMO to administer benefits, make and collect payments and accept the risk.
Some companies use both of the funding options, but for different employee benefit programs.