Category Archives: Benefits

Health Insurance Coverage in the United States: 2015

Source: Jessica C. Barnett and Marina Vornovitsky, U.S. Census Bureau, Report Number: P60-257, September 13, 2016

From the summary:
This report presents statistics on health insurance coverage in the United States based on information collected in the 2014, 2015, and 2016 Current Population Survey Annual Social and Economic Supplements (CPS ASEC) and the American Community Survey (ACS).

Highlights
• The uninsured rate decreased between 2014 and 2015 by 1.3 percentage points as measured by the CPS ASEC. In 2015, the percentage of people without health insurance coverage for the entire calendar year was 9.1 percent, or 29.0 million, lower than the rate and number of uninsured in 2014 (10.4 percent or 33.0 million).
• The percentage of people with health insurance coverage for all or part of 2015 was 90.9 percent, higher than the rate in 2014 (89.6 percent).
• In 2015, private health insurance coverage continued to be more prevalent than public coverage, at 67.2 percent and 37.1 percent, respectively. Of the subtypes of health insurance, employer-based insurance covered 55.7 percent of the population for some or all of the calendar year, followed by Medicaid (19.6 percent), Medicare (16.3 percent), direct-purchase (16.3 percent), and military coverage (4.7 percent).
• Increases in both private health insurance coverage and government coverage contributed to the overall increase in coverage between 2014 and 2015. The rate of private coverage increased by 1.2 percentage points to 67.2 percent in 2015 (up from 66.0 percent in 2014), and the government coverage rate increased by 0.6 percentage points to 37.1 percent (up from 36.5 percent in 2014).
• Between 2014 and 2015, the greatest change in coverage was the change in direct-purchase health insurance, which increased by 1.7 percentage points to cover 16.3 percent of people for some or all of 2015 (up from 14.6 percent in 2014).
• For the second year in a row, the percentage of people without health insurance dropped for every single year of age under 65.
• In 2015, the percentage of uninsured children under age 19 was 5.3 percent. This was a decrease from 6.2 percent in 2014.
• In 2015, the uninsured rate for children under age 19 in poverty, 7.5 percent, was higher than the uninsured rate for children not in poverty, 4.8 percent.
• In 2015, non-Hispanic Whites had the lowest uninsured rate among race and Hispanic origin groups, at 6.7 percent. The uninsured rates for Blacks and Asians were higher than for non-Hispanic Whites, at 11.1 percent and 7.5 percent, respectively. Hispanics had the highest uninsured rate in 2015, at 16.2 percent.
• Between 2014 and 2015, the overall rate of health insurance coverage increased for most race and Hispanic-origin groups. Hispanics had the largest increase (3.6 percentage points), followed by Asians (1.9 percentage points) and non-Hispanic Whites (0.9 percentage points). The Current Population Survey did not measure a statistically significant difference in the health insurance coverage rate for Blacks between 2014 and 2015.
• Between 2014 and 2015, the uninsured rate decreased in 47 states and the District of Columbia. Three states (North Dakota, South Dakota, and Wyoming) did not experience a statistically significant change in their uninsured rate.

The 401(k) Is Wreaking Havoc on Retirement

Source: Ben Steverman Bloomberg News, August 24, 2016

….In 1980, 38 percent of private sector workers had a pension and 19 percent a 401(k). By last year, according to the U.S. Department of Labor, the numbers had more or less reversed—just 15 percent had a pension and 43 percent a 401(k).

That shift is creating “double disadvantages for the less educated,” wrote University of Kansas sociology professor ChangHwan Kim and U.S. Social Security Administration researcher Christopher Tamborini in a paper presented at the American Sociological Association’s annual conference on Tuesday.
The authors analyzed surveys linked to W-2 tax data to figure out how much Americans with varying levels of education were saving in their retirement accounts.

Among workers who hold similar jobs with the same pay and who both contribute to 401(k) plans, a college graduate tends to save 26 percent more than a worker with just a high school diploma, the study concluded.

Workers with college degrees aren’t only far more likely to hold jobs that offer retirement plans. When offered the plans, they’re also far more likely to sign up and to contribute enough to retire comfortably.

The median private sector worker without a college degree is contributing nothing to a retirement plan, while the median college graduate pitches in more than $2,000 a year, the study found.

One reason is that less educated workers are likelier to hold lower-paying jobs that don’t offer retirement plans. According to the study, 83 percent of workers with a bachelor’s degree have access to some kind of retirement plan—compared with 62 percent of high school graduates and 43 percent of high school dropouts.

Even when they are offered 401(k)s, less educated workers find it much more difficult to take full advantage of them…..
Related:
Study Finds Changes to Retirement Savings System May Exacerbate Economic Inequality
Source: American Sociological Association (ASA), Press Release, August 23, 2016

A shift to defined-contribution retirement plans, such as 401(k) plans, has led to an income and education gap in pension savings that could exacerbate future economic inequality, according to a study that was presented at the 111th Annual Meeting of the American Sociological Association (ASA).

“The movement towards voluntary, contributory employer pensions has increased the influence of socioeconomic factors, such as education and income levels, on retirement fund accumulation,” said study co-author ChangHwan Kim, an associate professor of sociology at the University of Kansas. 

Unlike defined-benefit plans, which promise a fixed, pre-established monthly benefit for employees upon retirement, defined-contribution plans entail monthly contributions from employees, and sometimes employers, which are then invested on the employee’s behalf. The final amount an employee receives upon retirement depends on total lifetime contribution to his or her account, plus investment gains or losses.

A key difference between defined-contribution plans, which have been growing in popularity since 1980, and defined-benefit plans is that workers may choose to opt out of participating in the former.

When defined-contribution plans are offered in workplaces, people with a bachelor’s degree or higher are 1.2 times more likely to enroll in them than high school graduates even after controlling for the effect of annual earnings, occupation, industry, firm size, and other characteristics, the study found. 

Furthermore, people with a bachelor’s degree or higher save an average of 26 percent more annually to their defined-contribution retirement accounts than participating high school graduates even if both groups earn the same amount of annual income.

The State of American Retirement: How 401(k)s have failed most American workers
Source: Monique Morrissey, Economic Policy Institute, Retirement Inequality Chartbook, March 3, 2016

From the overview:
Today, many Americans rely on savings in 401(k)-type accounts to supplement Social Security in retirement. This is a pronounced shift from a few decades ago, when many retirees could count on predictable, constant streams of income from traditional pensions (see “Types of retirement plans,” below). This chartbook assesses the impact of the shift from pensions to individual savings by examining disparities in retirement preparedness and outcomes by income, race, ethnicity, education, gender, and marital status.

The first section of the chartbook looks at retirement-plan participation and retirement account savings of working-age families. The charts in this section focus on families headed by someone age 32–61, a 30-year period before the Social Security early eligibility age of 62 when most families should be accumulating pension benefits and retirement savings. The second section looks at income sources for seniors. Since many workers transition to retirement between Social Security’s early eligibility age and the program’s normal retirement age (currently 66, formerly 65), the charts in the second section focus on retirement outcomes of people age 65 and older.

The Effect of Firms’ Phased Retirement Policies on the Labor Market Outcomes of Their Employees

Source: Martin Hube, Michael Lechner, Conny Wunsch, ILR Review, Vol 69 no. 5, October 2016
(subscription required)

From the abstract:
In this article, the authors assess the impact on male employees’ labor market outcomes of firms offering a special form of phased retirement. The goal of the program is to smooth the transition from work to retirement and to decrease the costs of public pension and unemployment insurance schemes by increasing the employment of elderly workers. Using a unique linked employer-employee data set, the authors examine whether male employees spend more time in employment and less time in unemployment or inactivity after the introduction of the program. Results suggest that phased retirement options offered by firms can help to reduce some of the public costs of low labor force attachment of elderly workers, mainly by reducing exits through unemployment and by increasing employment and earnings. Under relatively good labor market conditions, they may also encourage a small share of workers to exit the labor market earlier.

Pension Enhancements and the Retention of Public Employees

Source: Cory Koedel and P. Brett Xiang, ILR Review, OnlineFirst, Published online before print May 16, 2016
(subscription required)

From the abstract:
The authors use data from workers in the largest public-sector occupation in the United States—teaching—to examine the effect of pension enhancements on employee retention. Specifically, they study a 1999 enhancement to the benefit formula for public school teachers in St. Louis, Missouri, that resulted in an immediate and dramatic increase in their incentives to remain in covered employment. To identify the effect of the enhancement on teacher retention, the analysis leverages the fact that the strength of the incentive increase varied across the workforce depending on how far teachers were from retirement eligibility when it was enacted. The results indicate that the St. Louis enhancement—which was structurally similar to enhancements that were enacted in other public pension plans across the United States in the late 1990s and early 2000s—was not a cost-effective way to increase employee retention.

Affordable Care Act’s Mandate Eliminating Contraceptive Cost Sharing Influenced Choices Of Women With Employer Coverage

Source: Caroline S. Carlin, Angela R. Fertig and Bryan E. Dowd, Health Affairs, vol. 35 no. 9, September 2016
(subscription required)

From the abstract:
Patient cost sharing for contraceptive prescriptions was eliminated for certain insurance plans as part of the Affordable Care Act. We examined the impact of this change on women’s patterns of choosing prescription contraceptive methods. Using claims data for a sample of midwestern women ages 18–46 with employer-sponsored coverage, we examined the contraceptive choices made by women in employer groups whose coverage complied with the mandate, compared to the choices of women in groups whose coverage did not comply. We found that the reduction in cost sharing was associated with a 2.3-percentage-point increase in the choice of any prescription contraceptive, relative to the 30 percent rate of choosing prescription contraceptives before the change in cost sharing. A disproportionate share of this increase came from increased selection of long-term contraception methods. Thus, the removal of cost as a barrier seems to be an important factor in contraceptive choice, and our findings about long-term methods may have implications for rates of unintended pregnancy that require further study.
Related:
Early Impact Of The Affordable Care Act On Oral Contraceptive Cost Sharing, Discontinuation, And Nonadherence
Source: Lydia E. Pace, Stacie B. Dusetzina and Nancy L. Keating, Health Affairs, vol. 35 no. 9, September 2016
(subscription required)

Black Workers, Unions, and Inequality

Source: Cherrie Bucknor, Center for Economic and Policy Research (CEPR), August 2016

From the summary:
This study uses the most recent Census Bureau data available to examine the trends in unionization for Black workers, focusing on unionization rates as well as the demographic composition of the Black union workforce. This paper also presents data on the impact of unionization on the wages and benefits of Black workers and how these benefits work to reduce racial wage inequality.

Unionization rates have been in decline across the board for decades. Despite this fact, Black workers are still more likely than workers of any other race or ethnicity to be unionized. In 2015, 14.2 percent of Black workers and 12.3 percent of the entire workforce were represented by unions, down from 31.7 percent and 23.3 percent, respectively, in 1983. This large decline in unionization has occurred alongside, and contributed to, an increase in overall wage inequality, as well as the widening Black-white wage gap.

This paper finds that Black union workers of today are very different from Black union workers of the past. In particular, Black union workers today are more likely to be female, older, have more years of formal education, be immigrants, and work in the public sector.

Black union workers also enjoy higher wages, and better access to health insurance and retirement benefits than their non-union peers. These benefits persist even after controlling for systematic differences between the union and non-union workforce. Specifically, Black union workers on average earn 16.4 percent higher wages than non-union Black workers. Black union workers are also 17.4 percentage points more likely than non-union Blacks to have employer-provided health insurance, and 18.3 percentage points more likely to have an employer-sponsored retirement plan.

These benefits are also large for Black workers in low-wage occupations and those with fewer years of formal education. Black union workers in low-wage occupations have wages that are 18.9 percent higher than their non-union counterparts, are 13.1 percentage points more likely to have employer-provided health insurance, and 15.4 percentage points more likely to have employer-sponsored retirement plans. Furthermore, Black union workers with less than a high school degree have a wage advantage of 19.6 percent over their non-union peers, and are 23.4 percentage points and 25.2 percentage points more likely to have health insurance and a retirement plan, respectively.

Some other highlights include:
– The percent of Black union workers who are immigrants has more than doubled since 1994: from 7.0 percent in 1994, to 15.4 percent in 2015.
– Black immigrants are more likely than native Blacks to be unionized. In 2015, Black immigrant workers had a unionization rate of 16.9 percent compared to 13.8 percent for native Blacks.
– Unionization rates for Black workers have declined across all sectors, but the decline has been especially steep for manufacturing (from 42.3 percent in 1983 to 13.3 percent in 2015).
– Black union workers on average earn $24.24 per hour, compared to $17.78 for non-union Black workers.
– 71.4 percent of Black union workers have employer-provided health insurance, compared to 47.7 percent of non-union Black workers.
– 61.6 percent of Black union members have employer-sponsored retirement plans, compared to 38.2 percent of non-union Black workers.

The State Pension Funding Gap: 2014 – New accounting rules help provide a clearer picture

Source: Pew Charitable Trusts, Issue Brief, August 2016

From the overview:

The nation’s state-run retirement systems had a $934 billion gap in fiscal year 2014 between the pension benefits that governments have promised their workers and the funding available to meet those obligations. That represents a $35 billion decrease from the shortfall reported for fiscal 2013. The reduction in pension debt was driven primarily by strong investment results, with public plans in fiscal 2014 averaging a 17 percent rate of return.

This brief focuses on the most recent comprehensive data from all 50 states and does not reflect the impact of weaker investment performance in fiscal 2015, which averaged 3 percent. Performance has been even weaker in the first three quarters of fiscal 2016, with negative average returns. Preliminary data from fiscal 2015 point to increases in unfunded liabilities for the majority of states. Total pension debt is expected to be over $1 trillion for state plans, an increase of more than 10 percent from fiscal 2014…..
Related:
State by State data

The Impact of Construction Dues in Minnesota: An Organizational and Individual-Level Analysis

Source: Midwest Economic Policy Institute (MEPI), August 16, 2016

From the summary:
In Minnesota, construction workers are productive, high-skilled, and well-paid. Over 30 percent of these workers are members of a union. To maintain and increase membership, trade unions in Minnesota must continually demonstrate how workers benefit from contributing dues.

An analysis by the Midwest Economic Policy Institute (MEPI), The Impact of Construction Dues in Minnesota: An Organizational and Individual-Level Analysis, finds that construction unions in Minnesota offer many positive benefits to members:
– Union membership increases the after-tax income of construction workers by $7,720 annually;
– Unions increase construction worker health insurance coverage by 13.1 percentage points; Minnesota’s construction unions spend 75.5 percent of dues and fees on bargaining and representation;
– Only 1.4 percent of all membership dues and fees collected by construction unions in Minnesota are spent on political activities and lobbying – or $17.47 annually per member;
– and For every $1 paid in dues and fees, an estimated $5.59 is returned to members in the construction industry in after-tax income. ….

The world is getting better at paid maternity leave. The U.S. is not.

Source; Melissa Etehad and Jeremy C.F. Lin, Washington Post, August 13, 2016

….. [I]n the United States bearing a child comes at a high price for many women. Despite having one of the world’s most advanced economies, the United States lags far behind other countries in its policies for expectant mothers. In addition to being the only highly competitive country where mothers are not guaranteed paid leave, it sits in stark contrast to countries such as Cuba and Mongolia that offer expectant mothers one year or more of paid leave……

Paid Maternal Leave Around the World