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Earnings and Benefits - Employer-sponsored Health Insurance

coverage employee employees medical

Workforce Characteristics

The likelihood of a firm offering health benefits depends not only on employer characteristics, such as size, industry, age, and corporate structure of the firm, but also on employee demand for health benefits. Companies with union employees were most likely to have insurance. For example, 83% unionized workers received medical benefits in 2005, versus 49% of nonunionized workers. (See Table 6.4.) Employer-sponsored health insurance is attractive to employees because it is the least expensive way to obtain health insurance. Employees with lower incomes, however, may not even be able to afford to pay the employee share of the premium. Thus, they may choose not to enroll in, or even ask for, employer-sponsored health insurance programs.

According to the U.S. Chamber of Commerce in 2004 Employee Benefits Study, full-time employees benefit to a larger extent from employer-sponsored health insurance than part-time employees. For example, in firms with under 100 employees about 93% of full-time employees were covered by an employer health plan in 2003; in larger firms coverage was virtually 100%. Parttime employees, however, did not receive the same benefits that year. In firms with fewer than 100 employees, only 12% of part-time workers had access to employer-sponsored health insurance coverage. While the extent of coverage expanded with company size, coverage at companies with 5,000 or more employees only reached 70% for part-time employees.

Employee Contributions

By the early twenty-first century, more employees in the private sector were contributing to employer-sponsored medical insurance than ever before. In 2005, only 24% of single, full-time employees who obtained TABLE 6.5 Percent of medical insurance premiums paid by employer and employee and participant contribution for single and family coverage, by selected characteristics, private industry, March 2005 Adapted from "Table 10. Percent of Medical Insurance Premiums Paid by Employer and Employee, by Selected Characteristics, Private Industry, National Compensation Survey, March 2005," "Table 11. Percent of Medical Plan Participants and Employer Premiums per Participant by Requirements for Employee Contributions for Single Coverage, Private Industry, National Compensation Survey, March 2005," and "Table 12. Percent of Medical Plan Participants and Employer Premiums per Participant by Requirements for Employee Contributions for Family Coverage, Private Industry, National Compensation, Survey, March 2005," in National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2005, U.S. Department of Labor, Bureau of Labor Statistics, August 2005, http://www.bls.gov/ncs/ebs/sp/ebsm0003.pdf (accessed January 8, 2006)medical care coverage through their employers and 12% of employees with family coverage were not required to contribute for health coverage. The rest paid a portion of their earnings back to their employers for medical insurance premiums.

TABLE 6.5
Percent of medical insurance premiums paid by employer and employee and participant contribution for single and family coverage, by selected characteristics, private industry, March 2005
Characteristics Single coverage Family coverage
Employer share Employee share Average monthly employee contribution Employer share Employee share Average monthly employee contribution
Note: Because of rounding, sums of individual items may not equal totals.
SOURCE: Adapted from "Table 10. Percent of Medical Insurance Premiums Paid by Employer and Employee, by Selected Characteristics, Private Industry, National Compensation Survey, March 2005," "Table 11. Percent of Medical Plan Participants and Employer Premiums per Participant by Requirements for Employee Contributions for Single Coverage, Private Industry, National Compensation Survey, March 2005," and "Table 12. Percent of Medical Plan Participants and Employer Premiums per Participant by Requirements for Employee Contributions for Family Coverage, Private Industry, National Compensation, Survey, March 2005," in National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2005, U.S. Department of Labor, Bureau of Labor Statistics, August 2005, http://www.bls.gov/ncs/ebs/sp/ebsm0003.pdf (accessed January 8, 2006)
All workers participating in medical plans 82 18 $68.96 71 29 $273.03
Worker characteristics
White-collar occupations 82 18 68.60 69 31 281.73
Blue-collar occupations 84 16 67.25 74 26 252.22
Service occupations 80 20 76.21 68 32 287.17
Fulltime 83 17 68.37 71 29 271.12
Part time 80 20 79.19 70 30 310.50
Union 90 10 55.71 84 16 198.19
Nonunion 81 19 70.80 68 32 282.98
Average wage less than $15 per hour 80 20 72.23 68 32 280.14
Average wage $15 per hour or higher 84 16 66.32 73 27 267.43
Establishment characteristics
Goods producing 84 16 66.06 75 25 245.42
Service producing 82 18 70.12 69 31 283.64
1 to 99 workers 82 18 76.05 66 34 310.83
100 workers or more 83 17 64.05 74 26 243.38
Geographic areas
Metropolitan areas 83 17 68.13 71 29 271.61
Nonmetropolitan areas 82 18 74.02 69 31 281.49
New England 80 20 73.74 74 26 238.05
Middle Atlantic 83 17 71.46 74 26 269.02
East North Central 83 17 69.82 76 24 251.58
West North Central 83 17 69.90 72 28 270.75
South Atlantic 80 20 69.91 66 34 300.08
East South Central 80 20 71.51 68 32 269.00
West South Central 82 18 67.17 65 35 297.29
Mountain 83 17 68.22 69 31 275.91
Pacific 86 14 62.09 72 28 262.59

Blue-collar and service workers were less likely to contribute toward either single or family coverage than their white-collar counterparts. In 2005, 71% of blue-collar workers were required to pay for single coverage, and 82% contributed to family coverage. Among white-collar workers, 78% contributed toward single coverage, and 91% did so for family coverage.

Not only were more employees paying for medical care coverage, employee contributions increased between 2003 and 2005. In 2003 average monthly employee contributions were approximately $60 for single coverage and nearly $229 for family coverage. In 2005 the average contributions for single and family coverage were $68.96 and $273.03, respectively. (See Table 6.5.)

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