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Health Plans Top Benefit Costs
That topped the amount paid in federal payroll taxes, which average $2,666 per worker, according to research undertaken by the US Chamber of Commerce.
The 2000 Employee Benefits Study found that benefits packages cost employers added 36.8% to wages in 1999 and made up more than 30% of company payrolls, translating to an average of $14,060 per worker per annum.
The study of 532 employers found that:
- larger companies offer more benefits than smaller ones
- almost all the participating companies offered benefits beyond those legally required
- fixed benefit packages are the most common type of plan, though nearly half offer a benefits cafeteria plan.
Most Common
The most common benefits were found to be
- paid vacation and holidays, offered by 97% of respondents
- health insurance, offered by 97%
- retirement plans, with 401(k)s offered by 81%, and
- life insurance.
Less common categories included:
- paid sick leave
- long-term disability
- short-term disability.
While full-time employees receive more benefits than part-time employees, 40% of companies offer paid vacation, holidays and retirement plan benefits to their part time staff.
What It Costs
In terms of costs, the study found:
- medical insurance premiums to be the most costly single benefit, at 20% of the total benefit cost, or $2,777 per employee on average
- paid time off accounted for about one-third of all benefits, an average of $4,113 per employee
- vision care was the lowest at $7.
The study also concluded that:
- the value of employee benefits was greatest for companies with between 1,000 and
- 2,499 employees, totaling $15,242
- for those with fewer than 100 employees it was $11,147
- for firms with more than 5,000 employees, $15,066.
Those amounts far exceeded the costs associated with providing legally required benefit payments, as follow:
- between 1,000 and 2,499 employees was $3,572
- less than 100 employees was $3,531, and
- more than 5,000 employees was $3,274
Location, Location, Location
Research also indicated that benefit costs were nearly 20% higher in metropolitan areas, averaging 40% of payroll for metropolitan-based companies, compared to 34% for companies in non-metropolitan areas.
Metropolitan-based companies reported higher costs for paid time off and retirement and savings plan benefits, while their non-metropolitan counterparts reported higher medical benefit costs.