OLMIS

by Gail Krumenauer
Published Mar-8-2013

Health Care Benefits Rising Costs Impact Oregon Employers and Employees Retirement Benefits Lower Enrollment in Retirement Plans Leave, Pay, Other Insurance, and Fringe Benefits Lesser-Known (and Offered) Benefits Differences by Region and Size Class More Information Available

The Oregon Employment Department surveyed nearly 12,000 private employers in all industries, class sizes, and regions of the state between June and August 2012. Almost 4,300 employers responded to the survey. They provided detailed information about the health, retirement, insurance, pay, leave, and fringe benefits offered to part-time, full-time, and management employees in June 2012.

More than one-half (57%) of Oregon employers offered health benefits to at least some of their employees. In all industries, a greater share of firms offered health benefits to management and full-time employees than to part-time employees (Graph 1). The industry with the largest share of employers that offered benefits to management and full-time employees was information (69% to management and 67% to full-time); information sector employers include firms in software publishing, broadcasting, and telecommunications, among others. Health care and social assistance employers offered health benefits to part-time employees at the highest rate (23%).

Employee medical coverage was the health benefit offered by the greatest share of employers for all employee types, followed by dental coverage, and medical coverage for dependents. For management and full-time employees, the information sector reported the largest share of firms that offered employee medical coverage (70% for each), dental insurance (60% and 59%), and medical coverage for dependents (63% for each). For part-time employees, financial activities (23%) firms offered employee medical coverage most frequently, but health care and social assistance reported the largest share of firms that offered dental insurance (19%) and medical coverage for dependents (16%) to part-timers.

More than one-half (57%) of employers offered health benefits to at least some of their employees (Table 1). Nearly three-quarters (72%) of employers who offered health benefits reported a change in the cost of health benefit plans over the year. While some employers reported cost declines, employers faced an average monthly increase of $48.48 per month. The median change was an increase of $30.00 per month.

Employers identified ways that health benefit costs affected aspects of their business over the past year. More than one-half (54%) of employers who offered health benefits reported that costs had reduced their business profits. Nearly one-quarter (24%) indicated that health care costs caused them to reduce other benefits to their employees.

Slightly less than one-half of employers (43%) offered retirement benefits to at least some of their employees. By industry, wholesale trade employers led the group: 56 percent offered retirement benefits to managers, and 60 percent offered them to full-time employees. As with health benefits, fewer firms offered retirement benefits to part-time employees than to management and full-time employees. Health care reported the largest share of firms with retirement benefits for part-timers, at 35 percent.

Employers also provided details about their defined benefit or defined contribution plans. The 401k, 403b, or 457 plan option proved to be the most popular, by far, among employers. Across all industries, roughly one out of four employers offered a 401k, 403b, or 457 plan to management and full-time employees (Table 2). The industries with the largest share of employers who offered this benefit fell into the information, wholesale trade, and manufacturing sectors. For part-time employees, industries with the largest share of firms who offered these plans included information, health care, and financial activities.

Few private employers offered defined benefit plans - those with guaranteed pensions - to employees. Overall, 5 percent of all firms offered this retirement benefit to management or full-time employees, and nearly 3 percent of firms offered this type of retirement option to part-time employees.

Employers identified the number of employees at their firms who were eligible for health care benefits, and the number of those eligible who enrolled for benefits. Firms reported generally lower rates of enrollment for retirement benefits by eligible employees than for health benefits.

Across all industries 61 percent of eligible employees enrolled for retirement benefits (Graph 2). That's 13 percentage points below the health benefit enrollment rate for all industries. This pattern held across most industries. The greatest difference in health and retirement enrollment occurred in leisure and hospitality (47 percentage points) and information (42 percentage points). Other services countered the prevailing trend when comparing health and retirement enrollment: 76 percent of eligible employees took up retirement benefits, while 51 percent of those eligible enrolled for health benefits.

The disparity in enrollment existed for each type of worker. Roughly three-quarters (77%) of eligible management employees enrolled for retirement benefits; by comparison, 83 percent of eligible managers enrolled for health benefits. Similarly, retirement enrollment rates for full-time (65%) and part-time (37%) employees fell below the health benefits enrollment rates (75% and 48%, respectively).

In addition to the more commonly recognized health and retirement benefits, employers also detailed a broad range of leave, pay, other insurance, and fringe benefits provided to employees. Almost universally, a larger share of employers offered these benefits to management and full-time employees than part-time workers.

Leave benefits showed to be the most commonly offered for management and full-time employees (Table 3). Paid vacation topped the list; 49 percent of firms offered this perk to managers, and 51 percent offered it to full-time employees. Employers reported that unpaid leave was the most commonly offered for part-time employees; 28 percent of firms extended this benefit.

The survey listed several leave, pay, other insurance, and fringe benefits that received few affirmative responses from employers. Although less frequently available to employees, these benefits highlighted some interesting points. Telecommuting served as an interesting example. Although a relatively small share of firms offered this benefit to management (12%), full-time (8%), and part-time (4%) employees, these numbers may actually be relatively large. A report released in 2012 from the U.S. Census Bureau showed that 2.5 percent of workers in private companies telecommuted in 2010.

Taking a look at the most commonly offered benefits revealed a clear trend across employer class sizes (Graph 3). For each of these benefits, a larger share of the biggest firms (50+ employees) offered the benefit than mid-sized employers (10 to 49 employees). In turn, mid-sized firms consistently showed higher rates of offering each benefit than small employers (those with 2 to 9 employees).

Clear distinctions also emerged in the share of employers that offered the most popular benefits from one region to the next. Firms in the Portland area and along the I-5 corridor extended benefits to employees most frequently. In most cases, Central Oregon reported the third-largest share of employers who offered this series of benefits, followed by the Columbia Gorge, the Oregon Coast, and Eastern Oregon.

More information about benefits offered by Oregon employers can be found in the full report, Oregon Employer-Provided Benefits and the Impacts of Rising Costs. The full report is available online at QualityInfo.org/pubs/benefits/benefits.pdf.