Category Archives: Benefits

Unions and Upward Mobility for Low-Wage Workers

Source: John Schmitt, Margy Waller, Shawn Fremstad, and Ben Zipperer, Center for Economic and Policy Research, August 2007

From press release:
Unionization substantially raises wages and benefits even in typically low-wage occupations, according to “Unions and Upward Mobility for Low- Wage Workers”, a report released today by the Center for Economic and Policy Research and Inclusion.

The report, which analyzed 15 of the lowest-paying occupations in the United States, found that unionized workers earned about 16 percent more than their non-union counterparts. Unionized workers in these same industries were also about 25 percentage points more likely to have health insurance or a pension plan.

For workers in these low-wage industries, unionization raised their wages, on average, about $1.75 per hour. In financial terms, the union effect on employer-provided health insurance and pensions was even larger.

Employee Benefits in Private Industry, 2007

Source: Bureau of Labor Statistics, USDL 07-1282, 8/22/2007

Sixty percent of establishments in private industry offered medical care benefits to their employees in March 2007, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employers paid 81 percent of the cost of premiums for single coverage and 71 percent of the cost for family coverage for workers participating in employer sponsored medical plans. These findings are from the Summary, “National Compensation Survey: Employee Benefits in the United States, March 2007,” published today.

More Americans Age 55 and Older Are Working Full Time

Source: Craig Copeland, Employee Benefit Research Institute, Vol. 28 no. 8, August 2007

From press release:

As an increasing percentage of older Americans are in the labor force, the trend toward more full-time, full-year work among older workers occurs across virtually every demographic group, according to an article published today by the nonpartisan Employee Benefit Research Institute (EBRI).

These trends mark a significant change in behavior for individuals age 55 and older, the article says, and are likely driven by their need to obtain affordable employment-based health insurance (as opposed to unaffordable or unavailable coverage in the individual market) and the need to continue to accumulate savings in employment-based defined contribution retirement plans.

Treasury, IRS Issue New Proposed Cafeteria Plan Regulations

Source: U.S. Department of the Treasury and the Internal Revenue Service, HP-526, August 3, 2007

The Treasury Department and the IRS issued today new proposed regulations for employee benefit plans under Section 125 of the Internal Revenue Code. The plans, called “cafeteria plans,” allow employees to make a choice between receiving taxable cash compensation or tax-free employee benefits, such as health care, dependent care, and other fringe benefits.
The new proposed regulations generally preserve the rules of the existing proposed regulations, while adding clarifications relating to statutory changes and administrative guidance changes since the previous regulations were published. The new regulations also address many issues on which the IRS has previously provided informal guidance.

Paid Sick Leave: Putting Legislative Preferences before Individual Preferences

Source: Jill L. Jenkins, Employment Policies Institute, May 2007

Paid sick leave is rapidly becoming the next big legislative trend. The first paid sick leave mandate was implemented in San Francisco in February 2001, but already many other cities and states have followed suit with proposals of their own. And there are currently two proposals at the national level. While the details vary, these proposals all typically allow employees to take paid sick leave for their own illness or to provide care for a sick child, spouse, or other relative (and, in the case of San Francisco, domestic partner, or “designated person”). The amount of leave typically averages about 7 days a year.

Because this is a relatively new policy, there is little research examining its effects. Proponents focus on two key arguments: one moral and one social. The moral argument is that low-wage entry-level employees should be able to take sick days without worrying about losing income—“no one should have to go to work sick for fear of losing their job or being unable to pay their bills.” The social argument is that a sick leave policy benefits society as well—“we, as a society, do not want the people serving our food or taking care of our children coming to work sick and potentially passing their illness along.” Each of these arguments packs a punch and neither is, strictly speaking, wrong, but neither tells the whole story either.

Change in Percentage of Families Offered Coverage at Work, 1998-2005

Source: Bianca DiJulio and Paul D. Jacobs, Kaiser Family Foundation, #7667, July 2007

Summary
Over 150 million individuals received health insurance through an employer in 2005, making employer-sponsored coverage the most popular form of health insurance coverage for the nonelderly in the United States. However, in recent years, there has been concern about erosion in the availability of employer-based health benefits for workers, and especially low-income workers. This paper analyzes data from the National Health Interview Survey (NHIS), an annual survey conducted by the U.S. Census Bureau for the National Center for Health Statistics, to assess changes between 1998 and 2005 in the percentage of families with workers that have at least one offer of health insurance through an employer. Results are broken out by family income relative to the federal poverty level.

The Family and Medical Leave Act: A Report on the Request for Information

Source: U.S. Department of Labor, Wage and Hour Division, 2007

From press release:
The U.S. Department of Labor today released Family and Medical Leave Act Regulations: A Report on the Department of Labor’s Request for Information, a comprehensive review of the thousands of public comments received in response to the department’s December 1, 2006, Request for Information about the Family and Medical Leave Act regulations and their impact in the workplace.

“The 15,000 comments from workers, employers and others attest to the importance of family and medical leave for America’s caregiving workforce,” said Victoria A. Lipnic, assistant secretary of labor for the department’s Employment Standards Administration. “While family and medical leave is widely supported, we also heard from many workers and employers that there are challenges with the way certain aspects are being administered. This report provides information for a fuller discussion about how some of the key FMLA provisions and their interpretations have played out in the workplace.”

The comments highlight the prevalence with which unscheduled intermittent leave is being taken in certain workplaces. As the record indicated, this is the single most serious area of friction between employers and workers. Another major area of concern, on the part of workers, employers and health care providers, is the medical certification process.

The report is comprised of 11 chapters: 10 chapters on key regulatory issues, plus the first chapter, which describes the value of the FMLA to employees.

Weathering the Gathering Storm Over Post-Retirement Health Care Benefits—Vested or Not

Source: Jeff Sloan, Genevieve Ng and Merlyn Goeschl, CPER Journal, no. 184, June 2007
(subscription required)

The convergence of new reporting standards by the Governmental Accounting Standards Board (GASB), the rising cost of health care, and the huge number of baby boomers nearing retirement age have knocked the public employment sector on its ear. In the past, public employers typically operated on a “pay as you go” model for other post-employment benefits (OPEBs), without reference to any future unfunded liabilities. However, the new GASB rules, which began taking effect in 2005, require public employers to account for and disclose their outstanding future OPEB liabilities, in much the same way they are required to do for pension benefits. Although OPEBs include benefits like post-employment life insurance plans, disability, and long-term care, retiree health care benefits account for the bulk of the unfunded OPEBs facing public employers today.

GASB Statement 45 on OPEB Accounting by Governments – A Few Basic Questions and Answers

Source: Governmental Accounting Standards Board, Statement 45 on OPEB Accounting by Governments – A Few Basic Questions and Answers

1. Why was Statement 45 on OPEB accounting by governments necessary?
Statement 45 was issued to provide more complete, reliable, and decision-useful financial reporting regarding the costs and financial obligations that governments incur when they provide postemployment benefits other than pensions (OPEB) as part of the compensation for services rendered by their employees. Postemployment healthcare benefits, the most common form of OPEB, are a very significant financial commitment for many governments. ….