Health Insurance Carries Heaviest Price Tag
The Chamber’s Employee Benefits Study found that benefit costs in 2000 were 37.5% over wages or an average of $16,617 per employee.
According to the survey, that figure fluctuated:
- one in ten companies shelled out more than 45.2% for benefits,
- another 10% paid less than 20.4%,
- the top 10% had an average $21,774 per-employee benefit cost, and
- the lower 10% paid an average $5,850 per employee
Larger companies generally offered more employee benefits than smaller companies, the study said. Companies with fewer than 100 workers paid an average of 29.4% of payroll for benefits, compared with 39.1% for companies with 5,000 or more workers.
Health Care Costs Top List
According to the research, of the total benefits menu, health care continues to be the largest benefit cost.
Employers spent an average of 10.5% of their payrolls-about $4,800 per employee-on health care benefits in 2000, the survey said. Approximately $3,000 of that per-employee cost is spent on medical insurance premiums alone.
More than half of the companies proportionally share the cost of health benefits with employees, according to the study.
Other survey results show:
- preferred provider organizations (PPOs) to be the most common type of health plan, with 68% of employers offering them,
- followed by health maintenance organizations (HMOs), offered by 46% of companies, and
- point of service (POS) plans offered by 21%
On average, employers also provided 5.1 paid sick days each year for employees. Paid vacation days ranged from 8.6 days for employees with one year of service to 19.8 days for employees with 20 years of service. The cumulative cost of such “time not worked” accounted for 9.4% of payrolls – about $4,300 per employee, the survey said.
Nearly all of the companies surveyed provided the most common benefits – vacation, health insurance and paid holidays. Of those, 90% provided retirement and life insurance while 78% added sick leave, the survey found.
The chamber’s study covered 456 companies with approximately 787,346 workers.
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