Private sector employers and their employees are continually challenged to manage health benefits and other non-occupational benefits. These benefits are unevenly distributed within the American workforce. Some have very low participation rates. We should expect better in the world’s richest country.
Compare this with workers’ comp, which is both accessible to almost every worker and is an easier burden on employers by the year. According to the Oregon study, the cost of workers’ comp in the median cost state declined between 2006 and 2016 (the last year reported), by 25%. The frequency of injuries, measured by the National Council on Compensation Insurance, and the Bureau of Labor Statistics, continues a very long run of almost un-interrupted annual declines.
Let’s do a quick survey of the state of these other benefits and how they affect employer and worker. I draw upon the most recent annual survey of the Disability Management Employer Coalition and other published sources.
Health insurance benefits are distributed very unevenly in the private sector. While 69% of private sector workers enjoy access to health insurance through their employer, 92% of the top quarter of workers in compensation are covered, but only 35% of the bottom quarter in compensation are.
This means that less compensated workers either go without insurance, buy it on the individual market, or take advantage of eligibility for Medicaid or other public insurance programs. According to a report published by University of California at Berkeley, 55% of Medicaid and children health insurance (CHIP) annual expenditures — $45.4 billion in 2013 — went to workers and their dependents.
According to Mercer, health benefit costs have been growing about 3% a year since 2012; drug costs, about 7.5% a year. Employees pay 24% of premiums, a rate which has been stable over the years as premiums increased. But employees are hit with ever higher deductibles. High deductible plans increased from 14.8% of employer covered persons in 2007 to 43.4% in 2017, according to the National Center for Health Statistics. A high deductible plan in 2017 was defined at $1,300 for self-only coverage and $2,600 for family coverage.
Overall, employers have upped their skills at managing leaves. For the most part, leave management practices among employers deal only with non-occupational leaves — workers’ comp remains largely in its own silo. The DMEC reports that over three quarters of its survey respondents manage leaves they are subject to by having both policies and procedures in place that are uniform and centrally managed.
Among private sector employees, 82% of full time workers have access to sick leave; 39% of part-timers do. The benefit is granted very unequally: 90% of workers in the top 25% of compensation have sick leave, but only 45% of the bottom quarter in compensation are eligible. And the benefit is more generously offered in some regions, such as the Pacific Coast states, than elsewhere, such as the South.
Employers are also subject to an expanding array of what the DMEC calls regulatory leaves, such as federal Family and Medical Leave Act (FMLA), state family and medical, state military, jury duty, and municipal/county, and other state mandates. Like workers’ compensation, these leaves apply equally to virtually all employees in jurisdictions where the leave is mandated. A third of DEMC’s respondents say they are subject to state, municipal, and/or county paid sick leave laws.
Paid Family Leave
Paid family/parental leave is now mandated by law in five states and the District of Columbia, and upwards of 20 other states have considered enacting a mandate. Per the DMEC, 18% of employers offer employer sponsored (separate from state-mandated) paid family leave or paid parental leave. Expanding parental leave has been gradual, arising from the historic increase in women in the workforce since the 1970s, and the practical necessity of both parents working in today’s economy.
A recent study of this employee benefit by the Paid Leave Project noted that despite growing consensus on the benefits of paid family leave, only 14% of the workforce has access to any type of paid family leave (differing from DMEC’s survey estimate of 18%).
And the benefit is granted unequally — 6% of the lowest quartile of wage earners receive paid family leave, compared to 22% of those in the top sector. The U.S. is virtually alone among advanced economies in not mandating paid family leave.
ADA and Return to Work
After the passage of the Americans with Disabilities Act in 1990 (with amendments in 2008), American employers have been accountable for accommodating for disabilities. The mandate extends to coordinating return to work practices for work-related and non-occupational disabilities.
Approaching 30 years of the original mandate, many employers still find that disability accommodation is a challenge. Per the DMEC, 61% of respondents are confident or very confident in their company’s ADA administration. Those with a formal accommodation and return to work program in place, and those using a vendor to manage leaves, are more confident.
Only 39% of employers have a formal return-to-work (RTW) program, and 18% plan to implement one in the future. Practice varies greatly by size of employer. As one would expect, large employers are more competent. Among employers with 5,000 or more workers, 94% have an RTW program for work injuries; 83%, for short term disability; and 75% for long term disability. The greatest barriers to effective accommodation practices, per the DMEC survey, appear to be manager and supervisor lack of skills and indifference.
Where are Benefits Headed?
Some predict that health insurance will sooner or later turn into a single payer system. That may be the only way to ensure that all are covered by insurance at a cost affordable to the particular household.
Some predict that paid family leave will eventually become close to, or in fact become, a federal mandate, much like unemployment compensation. Should that come to pass, paid sick leave might be included.
Aside from these predictions, it is apparent that covering employees for key non-occupational benefits remains a challenge for much of the private sector community, both in extending coverage and in managing it.
ABOUT THE AUTHOR
Peter Rousmaniere is widely known throughout the workers’ compensation industry, both for his writing and consulting experience. Based in the picture perfect New England town of Woodstock, VT, he is a regular on the conference circuit, and is deeply in tune with trends and developments within the industry. His passion is writing and presenting on issues largely related to immigration, and he maintains a blog on the subject at www.workingimmigrants.com.