Health Benefits Costs 7% of Total Private Employer Comp Costs

June 10, 2009 ( - Employer costs for employee compensation averaged $29.39 per hour worked in March 2009, the U.S. Department of Labor's Bureau of Labor Statistics reported.

Wages and salaries, which averaged $20.49, accounted for 69.7% of these costs, while benefits, which averaged $8.90, accounted for the remaining 30.3%, according to a BLS news release. Costs for legally required benefits, including Social Security, Medicare, unemployment insurance, and workers’ compensation, averaged $2.28 per hour (7.8% of total compensation).

Employer costs for life, health, and disability insurance benefits averaged $2.52 (8.6%); paid leave benefits (vacations, holidays, sick leave, and personal leave) averaged $2.08 (7.1%); and retirement and savings benefits averaged $1.31 (4.5%) per hour worked, the news release said.

In March 2009, private industry employer compensation costs averaged $27.46 per hour worked.

Wages and salaries averaged $19.45 per hour (70.8%), while benefits averaged $8.02 (29.2%). Costs for paid leave averaged $1.86 per hour worked (6.8%), supplemental pay averaged 78 cents (2.8%), insurance benefits averaged $2.14 (7.8%), retirement and savings averaged 96 cents (3.5%), and legally required benefits $2.27 (8.3%) per hour worked.

The average private industry employer cost for health insurance benefits was $2.00 per hour worked (7.3% of total compensation) in March 2009, according to BLS data.

Among occupational groups, employer costs for health insurance benefits ranged from 91 cents per hour and 6.7% of total compensation for service workers, to $2.91 and 6% of total compensation for management, professional, and related occupations. Among other occupational categories, employer costs for health benefits averaged $1.77 (8.3%) for sales and office occupations, $2.44 (7.9%) for natural resources, construction, and maintenance occupations, and $2.25 (9.7%) for production, transportation, and material moving occupations.

Employer costs for health insurance benefits were significantly higher for union workers, averaging $4.15 per hour (11.4%), than for nonunion workers, averaging $1.75 (6.6%).

Among the four regions, the proportion of total compensation represented by health benefits ranged from 6.9% in the West to 8.1% in the Midwest.

Health insurance benefit costs increased, both in average hourly dollar amount and as a proportion of total compensation, with establishment size. Establishments with fewer than 50 workers averaged $1.30 (6%), those with 50-99 workers averaged $1.76 (7.1%), those with 100-499 employees averaged $2.22 (7.9%), and those with 500 or more employees averaged $3.19 (8.2%).