T-32 23 21 16 19 22 2O ASSURING ECONOMIC SECURITY FOR WORKERS: I0 14 18 II 9 13 26 17 24 12 25 15 HEALTH, DISABILITY, AND LIFE INSURANCE BENEFITS TABLE OF CONTENTS LISTING OF TABLES 4 12 Statement of families. insurance distributions . It from is likely life that insurance the additi plansonalare cost exempt of such from aindividual system would income be maximum p employer Sur revenue rogram vey of payment coverage from D. group full-time Suthe mmary limits life suggest new employees and insur tax or Concluding that ceilings ato nce Medicare's em inplan plmedium-size oon yer-pr Remarks--Em disability wereoHospital vided entitled and plincome. odisability yInsur er large toance grextended oestablishments. upand trust health life fund. coverage insurance insurance Those This or a public system of independent disability assistance programs. Integration security percent) the numberwere forof mworkers ocovered st workers. in by that an employer As earnings the bagroup group sis ohealth is f overy ur private insurance large. system Asplan a result, (see of income Table more coverage B. lossEquity--Employer among low-incomegroup workers healthmight insurance be low coverage relative is to possibly the loss the of Security, insurance 1984) 6 may icontributions nbeparticul a very ar, lowmust isprice greater be tocompared pay for lfor ow-wto aagesystem potential workers, of health increases however,insurance integrati in public that on their coverage from an employer group health insurance plan. In 1982, Table 4 Table 3 Title PaKe Deborah JTable . Chollet, 6 Ph.D. Section PaKe Table 5 Table I fplans distribution plans taxation. survey ar greater are are isB.the the conducted Neither Employer-Provided than of baprimary sis the theemployer ofpolicy's annually le most source vel private of contributions Life of face bytaxdisability the Insurance--Nearly he expenditures value alth Department insuran if toand they disability cassociated life eofbecame inall Labor, insurance thefull-time and United disabled. with Bure life acoverage current uStates. employees insur of Nearly Labor ance tfor aIn x assures most who 2). have egalitarian Most aSecond, proposed baof sic,these uniform employee the comprehensive people income level benefit (7distribution 7of tax percent earnings provided reformofreplacement of (for covered to people workers example, nonworkers) for with inthe all the employer workers. Bradley-Gephardt United were coverage children States. security for workers, employer-based disability insurance, pensions and basic health than half insurance of all workers coverage whoanticip were aco ted veredfrom by an full employer or increased group health taxation plan of in probably insurance serves morealso program than ra60 ises spending--particularly percent the of relathe tive population. value by Medicaid. of Federal employer-provided In spending 1982, 86 forpercent diMedic sabilit are, yof employer plans provided health insurance coverage to 80 percent of the total DISTRIBUTION OF PERSONS DISTRIBUTION OF WORKERS Table I: Distribution of Workers Covered by an Employer PERCENT OF FULL-TIME EMPLOYEES PARTICIPATING I. EmploGroup yer-Provide COVERED Healthd Insurance BY Heal ANthEMPLOYER Benefits Plan by GROUP .................................... Level HEALTH of Workforce INSURANCE PLAN I DISTRIBUTION COVERED BY AOF N EPERSONS MPLOYER WITH GROUPPRIVATE HEALTH HEALTH INSURANCEINSURANCE PLAN Mr. Chairman, I am pleased to Table submit 2 this testimony on the importance preferences three-quarters in suggests (under large Statistics, medium-sized numbers IN $50,000), that EMPLOYER and for of DISTRIBUTION a(reflects 7and workers. nor 2tax HEALTH, employer-provided percent) large the on plan employer benefits LONG-TERM establishments OF had participation WORKERS coverage contributions ultimately DISABILITY, COVERED plans. participate as that paid BYof Whether AND to AN provided January by health EMPLOYER LIFE these in aINSURANCE an Iaccidental insurance of revision plans, employer-sponsored GROUP the survey PLANS, arewould, death of taxable year. tax or in Employer bill) 19 1982 82, earned 8suggest 0 Secondly, per health less cent thathan tplans ofall integration all $15,000. include employer people the with contributions avoids spectrum private "excessive" health ofto workers health insur cumulative ainsurance nat ce all coverage levels be earnings fuwere lly of under age 18; the rest were nonworking adults, including a small number of employer life insurancinsurance e contributions for high-wage are probably workers. to health worthinsurance. preserving.Nevertheless, Maintainingemployer-pro effectivevided tax nonworkers by comparison, covered isby estimated employer plans at were $62.2 dependent billion children dollars under in age 1984;18. 1984 In population that reported private insurance coverage from any source. These A. Coverage ........................................................ ASSURING ECONOMIC SECURITY FOR WORKERS: 2 Activity, 1982 ................................................. OR PUBLIC PROGRAM ELIGIBILITY 3 BY FAMILY INCOME, 1982 a BY PERSONAL EARNINGS, 1982 a MEDIUM-SIZE AND LARGE ESTABLISHMENTS, 1982 a HEALTH INSURANCE PLAN BY LEVEL OF WORKFORCE ACTIVITY, 1982 a B. Equity .......................................................... 6 HEALTH, DISABILITY, AND LIFE INSURANCE BENEFITS 7 dismemberment of employee benefits benefits. BY EMPLOYER to the economic HEALTH INSURANCE security COVERAGE, of workers1982and a their families. effect, taxed as target A. employeeLonK-Term low earnings. and middle-income Disability workers Insurance--The who constitute purpose moreofthanlong 80 preferences by basic cretirees overed Social life bDes under ySecurity. pinsurance an ifor teage emplo these co65. vyer erplan. aDIS geplans plan; TRIBUTION byLike would half emplo disability OF yer of jeopardize NONELDERLY adis ll abpeople ilit insurance, pri yPERSONS vwithout ate plans, basic insurance Scoverage oclife ial coverage, insurance Sefrom curityan , replacement from independent public programs. In general, public-program disability earnings; incentives federal-state The Lirates kefor and income disabi spending employers of life lcoverage ity distribution insur forto insurance, aMedicaid nce--including provide among of allthese all is the workers estimated people goal benefits disability except ofcoat vbasi ered toanother cthose workers coverage by grouat pan$3at the 7employer life .8provided all very billion. insurance earnings lowest group by people all states, includerecipients workers andoftheir AFDCfamilies benefitsat9 all arelevels categorically of earningseligible and income. for C. Efficiency of Tax Preferences: What Are the Alte_natives? .....I0 Table 2: Distribution of Nonelderly Persons Covered by Employer COVERED BY EMPLOYER GROUP HEALTH INSURANCE PLANS, D. Summary and Concluding Remarks ................................. 12 Group Health Insurance Persons with Plans, by Worker PercentStatus, of 1982 ........... Percent 5of Workers with Percent of however, term-disability The tax preferences The is again level insurance an accorded important of foregone is particular toquestion. provide federalkinds earnings In revenues, terms of employee replacement of potential or tax benefits--pensions, for coverage expenditures, workersloss, who benefits wo employer percent rkers' of Lacking compen (DI, plan all workers' sare workers atipopulation onuninsured and covered compensation, othsurvey er from bydian sabi andata, yemployer land it sour y-rathe cee. lParticipants ated variety group importance These publ plan. of people icother asof plaanemployer-pro Percent s, living cashhowe andver, invnoncash ided wormost ker benefits These are generally proposals intended raise Employer tosevpro eral CoveraKe vide issues. income toThey replace would lost No potentially earnings. health insurance High ratesplan--co of worker vered BY particip WORworkers KER ation STATUSand , in198 their employer 2 a dependents--mirrors group health plans the is employer pl levels annu ansal is earnings may pension earnings be the leplans--are vel--generally repla mostcement. efficient an important with Planmeans frbenefits agmented supplement of assuring aemployment re usuall to the ay successful patterns--are insur calcul ance ated offered private as higha Medicaid; Together, A.these furthermore, CoveraKe--Health public programs in someinsurance fin states, ance health is dependent thecare most children sercommon vices in for employee any onlylow-income about benefit 18 Employer Persons All Persons Employer Percent of All Workers Persons with Employer Persons without Employer Employee Benefit Plan of All Full-Time Employees Workforce Direct Indirect Employer Statement of I0 II. Employer-Provided Disability and Life Insurance Benefits ............ 15 Table 3: Distribution of Workers Covered by an Employer Group health insurance, disability Coverage Coverage insurance and withinlife insurance--have Coveragewith Employerbeen coverage associated become permanently Because as with a source the employer and Number ofexemption totally life Cover ofinsurance contributions age disabled. of b employer coverage Long-ter_u Workers tocontributions for health within disability workers insurance and tocover with their accident aEmplo geare families can yernot and be the disability people arguments who assistance repoagainst rt beingprograms) revising severelyorare disabl eliminating taex-exempt. d- thattax is,The preferences unable accumulation to wofor rk at employer- of all theseor The families enhance and amount roughlywithout federal ofequbasic al. employer revenues co Furthermore, veragecoverage byprovided brothe adening represent value by employer the ofmost health taxplans, of bthe insurance ase.therefore, uninsured The benefits prospect is popul usually ashows tionof Activity encouraged alternative by to public both the assistance. Total tax code Cand overage the bway thCaotveragroup ge b healthCover insurance age is by percent distribution publicof disability theofpopulation. covered and survivors' workers by insurance earnings. progr Table ams. 4 Existing presents research the family has multiple fpro amily vided areto of categorically workers the worker's in the eligible earnings. United for States. As Medicaid. a result, In 1982,the The84value loss million of of em employer cipvloyer ilian A. Long-Term Disability Insurance ................................. 16 Health Insurance Plan Deborahby J. Personal Chollet,Earnings, Ph.D.* 1982 ............... 7 Family Income (in millions) Income Group Coverage Personal Earnings (in millions) Earnings Group Coverage Persons with Percent of Percent of 2 B. Basic Group Life Insurance ..................................... 19 in the United States. Number of Percent of All Number of Percent of All disability provided instrumental through insurance in achieving an insurance is estimated broad policy, at participation $120 or through millionamong the in 1984. worker's workersTaxand pension expenditures important plan. provided areg Health significantly worsening is multiple uldifficult arly Insurance disability federal becau ofto related sethe for etax va oand f lu worker's Employee ate. regressivity ato life chincome, rbon insurance Certainly, earnings. ic heamong ataxing lthplans the middle-income In con employer di may 1982, wide tiobe n particip about weaker ocontributions r 97 workers, im ation pa two-thirds than irment- howe the by-re vto er, arguments po fuof r ll-time thealth plan is noa benefits can equal Coor verageeven exceeds Persons predisability, after-tax All Personsearnings, not income littleinvestigated distribution variation the among potential of workers. all people coverage Ascovloss ered a result, that by might anemployer-provided employer result from group reducing health health cpriced. ontributionsEmployer to group contributions life insurance to health is higher insurancefor have employbeen ees statutorily at higher nonagricultural coverage The amongcentr low-income workers al position reported workers, of employer-provided coverage therefore, from couldan impose plans employer in significant our group system health costs of C. Efficiency Before of theTax United Preferences: States Senate What Finance Are the Committee Alternatives? .....20 Other Table Sour 4: ceDistribution Personsof PersonsPersons Coveredwithby an Employer Persons Group Persons without Noncontributory c (Persons in millions)71 Worker Status (in millions) with Coverage with Coverage D. Summary ........................................................ 24 Loss Health Insur Subco ance mmitteePlan 0.I onbyTaxation Family Income, and Debt 5.5 1982 Management ................... 0.I 9 Loss 0 4 43.4 0.5 of major economic Coverage argument securityagainst (mifor llions) workers including Emplo and yeremployer their Coverage families health .(millions) insurance This wasEcontributions mployer the purpose Coverage for in providing workers participants against associated In income 1982, fr taxing in Most omabout with amedium-size any inof strong employer-provided pthe medium-sized riv 43 theat exemption percent eworkers incentive and or pu large bl of who and of ichealth employer full-time for employer large dais reabili cthe overed insurance establishments tycontributions plans workers disabled plby an.suggests benefits. an The in employer tobelonged medium-size to 19that remain 78group At Dhe isab these athe to lth term ioutside lit plans same and pl yinsur life ansSu time, large arvey that nce the are are insurance exempt insurancefromwould isindi a vaidual lso particularly beincome regressive. and valuable Social That benefit Security is, the for taxation additional low- since and tax middle-income 1954. paymentThese of or insurance earnings eliminating levels. plan intax1982. preferences More thanforhalfemployer of thesedis people abilitylived and inlife families insurawith nce health insurance is illustrated by the low rates of alternative health on insurance state Medicaid plan. These programs. workers Potential representedincreases nearly in 78 percent existing ofpublic the nation's program $ I-$ 4,999 1.3 9.2 1.0 $ I-$ 4,999 15 2 56.2 18.2 All workers 83.7 65 3 18.4 24.2 Health Insurance for Dependents b 93 14 Table 5: Distribution of Persons with Private Health Insurance 5,000- 7,499 2.1 Hearing on 21.2 1.6 5 000- 7,499 6 6 65.9 7.9 the which Full-time taxable estimates Congress income. workersofgranted There federal 65.1 is,tax revenue however, preferences loss 58an 3 additional associated for these issue 6.8 with benefits totaxconsider: preferences and 11.8legislated whether for higher: pl paid establishments aconduct anmajor I00 are ed Noncontributory $2.2 percent source blow- y th billion eparticipated and or Sof ocmiddle-in 200 ialin lifepercent Se 1984. cuinsurance cri in ome tyan ofAdm wemployer the orkers. inico st deceased vrerage ation group In worker's among 19 fou 8disability 2, nd that more w44 orkers. annual oth nlplan; aynearnings. 42half Furthermore, 49 percent percent of One all of workforce. low-income All Persons bworkers The integration relative 130.8 oftopublic their program income 67.5 benefits would be inmuch employer higher I00.0 disability than the contributions, workers: total exemptions family forhave income these or the encouraged less workers, implications than $30,000; employer workerof pri nearly dem contributions va and te three-quarters coverage for employer-provided to loss coverage lived for the represent in economic families healtha The earnings replacement goals of employer-provided disability and tot costs, insurance al civilian andcoverage--priv thenonagricultural potential ate for orworkforce significantly public--reported (see Table higher by I). the rates nonelderly of noncoverage populationin 7,500- or 9,999 Public Program Employee Eligibility 3.4 Fringe by Employer Benefits 36.4 Health 2.6 All7 Persons 500- 9,999 130.8 6 6 I00.0 74.862.9 I00.07.9 Full-year 49.4 46 1 3.3 5.3 I0,000- 14, Insur 999ance Coverage,12 July .2198226,...................................... 27, and 30, 56.21984 9.3 13 I0 000- 14 999 15 8 85.1 18.9 nondiscrimination additional participated Part-year taxin payment arules pension 15.8for of qualifying high-income plan 12 that3plans. would workers. Today, provide 3.5 EBRI mostimmediate tabulations workers 6.5 participate retirement of data employer-provided third although Long-Term with the current 1income 0.of 7 tax For mil plan employer-provided Disability lio less preferences, most nparticipants than pworkers er disability so Insurance ns $40,000. who given and belonged basic re and their po their rtlife life edfamilies, to public seinsurance plans insurance vere cost dpublic that isabin iis benefits lpaid itdisability foregone not y 43aalintended sflat oarertepo axdollar assistance substantially rrevenues, teto d pro amount, receipt vide and is workers pl Woarkers ns mitigates cwith emplo the yer potential he 83. alth 7 insuran work cdisincentives e coverage 77.6 eaassoci rned ated less with than 64.0$15,000; overlapping 88 proportionately insurance at all larger income real levels. income supplement In addition, than the they Soci do afor l Security higher-incometax security life insurance of workers. plans might make the argument against revising their tax worker without families, coverage are from important an employerconsiderations plan. Only in 26 the percent debateof over all people reducingliving tax Rates of employer group health insurance coverage are particularly Other Private 15,000- 19,999 14.8 68.2 11.3 15 000- 19 999 12 7 90.4 15.2 Part-time workers 13.6 4 1 9.5 8.1 Noncontributory 33 15 20,000- 24,999 17.8 78.2 13.6 Table Coverage 20 000- 6: 24 Percent 999 of7.8 Full-Time 9Employees 6 5.9 Participating 92 16.1 8 in Employer 25.6 11.4 smaller. in pension and insurance plans through their employers. They have come to usually benefits aworkers. Full-year betterbetween if system the$2,000 worker for and ensuring 5.1became $15,000. wide disabled 2access 1 (seetoTable health 3.06).careIn than total, 2.5 alternati aboutve92 per disability survivors' adequate of cent publicoflife assistance. aor benefits ll insur pcri overed vat ance eareworkers dis cover the abili age most tyearned for benefi important most less ts.workers, thaalternative n Mo $25,000. re only caref auto This lsmall employer-provided inves distribution proportion tigation of of of produced Nonworkers exemption The byhasthe income provided Congressional distribution 47a.1 financial Budget of incentive workers Office54.9(CBO) and for their indicate employers families that to36.0 aoffer who tax recei cap health von e preferences treatment Summary--Employer-provided somewh for aemployer t weaker contributions than the disability argument to health against and insurance. lifereducing insurance tax benefits preferencesare in families of civilian nonagricultural workers without employer group high among workers who are employed full-time throughout the year, the largest 25,000- 29He ,999 alth, Long-Term 17Disability, 3 and Life 83.9Insurance Plans, 13.2 25 000- 29.999 6 3 93 9 7.6 Part-year 8.5 1 9 6.5 5.6 Retirement Children pension with 40.4 immediate 64.2 27.6 30,000- 34Medium-Size ,999 and Large 15 0 Establishments, 86.3 1982 ....................11.4 17 Any 30 Public 000- 34 999 3 9 93 3 4.6 consider these benefits, and their tax status, as part of the same social percent systems Self-em disability plomight yed Like of all retirement be. employer-provided full-time 5.provision 0 workers health ha 2ve9 disability insurance,2.1coverage basic 49 life provided 4.3insurance by an employees disability this Others apparent Inin and addition medium-size gap lifein insurance to income II.0 providing andsecurit plans. largeydeath establishments forSeveral benefits the 37.7disabled public-sector forelect worker's may be supplement programs a families, starting 8.4 al propoint group vsome ide cemployer insurance overed workers Social health benefits Security by insurance inearnings lieu DI contributions of isis wage anmirrored income-redistributi compensation would in the beto vedistribution regressive workers program. whoatearn ofevery The all less rate people income than of coverage Most from workers an employer covered groupbyhealth an employer plan isgroup important health forplan several are low- reasons. and co formmonemployer-provided components of employee health benefit insurance.plans.At Although the same fewer time,than thehalf potential of all coverage reported coverage from another private health insurance plan in 1982 sector of workforce. In 1982, more than 90 percent of full-time full-year 35,000- 39,999 11 8 86.9 9.1 Coverage 35 000- 39 999 5.3 2 1 4.1 93 18.3 6 29.12.5 Noncontributory d 40,000- 49,999 15 9 87.0 I 12.2 40 000- 49 999 2.1 91 7 2.5 contract that assures their entitlement to Social Security benefits, insurance or pension plan. benefits basic cf life income overed or relife insurance security evalua by Proposals appear atinsurance ningbenefits emplo tocoverage--even totbe yhe erest plans evenly acomparable ablish pl dequ anapro cdistributed ybyvaide when nand fto aational mily private a effe the form in among ct health come. idisability vemployer eness ofworkers--particularly disability insurance Moretaxand contributes. thanin life plan cinsurance hen alf tiinsurance. have vesofamong been Low afor by ll earnings level; middle-income asreplacement a percent workers. of in income, the In 1982, DI program people more than with is substantially 80 the percent lowest incomes ofhigher all workers would for workers pay covered more at the First,Social sinceSecurity most people ceilingcovered on taxable by an wages. employerInhe1983, alth nearly plan are 95 members percent of of II. full-time federal Employer-Provided revenue permanentgainsworkers Disability are substanti inandmedium-size Life ally Insurance smaller. and Benefits large Because establishments the value are of workers (see Table were 5). coveredAnother by an employer 29 percent groupreported health plan. public program eligibility, 50,000- 59,999 8 3 87.1 6.3 50Medicaid 000- 59 999 1.9 1.0 1.5 92 13.6 3 21.61.2 Life Insurance 96 (Percents) SOURCE: EBRI tabulations of the March 1983 Current Population Survey (U.S. 60,000- 74,999 5 7 86.2 4.4 unemployment 60 000- 74 999 insurance and workers 0.6 compensation insurance. 89 4 0.7 full-time Noncontributory Since permanent the earnings employees replacement of larger is establishments. the goal of 82 disability When the immediate insurance participation continuing than employer-provided Social introduced sixSecurity times in covrer avthe tes irt aDisability geually plans, amount inor supplemental paying every of Insurance andadditional session the immediate pl (DI) efficiency ansoftax isbybenefits Congress the paid full-time largest of by during people to employer workers public-sector workers with the plans suggests last income who program fifteen become asabove that an lower people-- all workers earnings workers Department earned levels andof less their Commer than than ce, dependents-- for theBure those Social au cof overed with Security the gre Census). aby ter ceiling. an earnings. employThe er IIco plan mbination Because in 1982 DI of by an employer group health insurance plan earned less than $30,000; and more low- disab covered ility andbymiddle-income anandemployer-provided life families, insurance disability employer-provided benefits--and insurancethe health plan, level benefits aboutof 49 probably employer percent predominantly Employer Although for Medicaid. group most workers disability Nearly(60 half and percent) life (48 percent) insurance have coof verage plans all people from provide their living income own in 75,000 or more 5 2 84.6 4.0 75.000 Medicare or more 0.4 0.7 0.3 86.9 2.4 3.8 0.9 All workers 77.6 60.5 17.1 22.5 disability $50,000. 5This retirement testimonyprovisions describes ofthepension prevalence, plans distribution are included and as aimportance source of disabled. mreported that alternative coverage, any employees paysfamily the benefits Life to contribution publi may in insurance ccome hato disability veless permanently noamounts plans th pri anvassistance. ate $3 may (from 0,000. and life payeither totally insurance disability The primary thedisabled employer cobenefits verage altern workers. aor tive outside in employee) two sour Because ofcways. e the and of repl years. acementThese rates, proposalsin have particul differed ar, are in the inversely populationsrelated they to soughtincome, to serve, the substantially these th a an Inone-third cludes tax incentives araise llearned civrilians ates less for of workers than ex private cept $15,000 and those health employers (seeliving insurance Table has in 3). produced coverage families Only 5 percent throughout high in whi rates chof all tthe he of participate replacement contributions--vin aries for aworkers pension with and plan employee their that edependents aprovides rnings, timmediate axing in the employer event disability contributions of theretirement worker's to worker families without employer coverage reported no health insurance employer plan, dependents' coverage is an important source of coverage for Total, CHAMPUS All bPersons b 3.1 130.8 2.4 67.5 3.3 I00.0 4.9 Total, All Workers c 83.7 77.6 I00.0 SOURCE: Full-time U.S. workers Department84.7 of Labor, 75 Bureau 8 of Labor 8.9 Statistics,15.3 EmploMee greatest earner is a member of the Armed Forces or an agricultural worker. bof asic Full-year three plan different paid by the employee 90.4 employer. benefits:84 3health, long-term 6.1 disability, 9.6 and life long-term entitlement worker the the amount kinds coverage Benefits C. Thedisability of ofEfficienc for So plan health cat iain lDI all benefits Medium Securit Fbenefits, care income coverage of y and vary Tax expenses levels. Old LarKe however, Preferences: by for Ageemployee Firms, they workers, and depends would S1982, urvivors earnings. What employer-provided co Bulletin von er, are Insurance the Inand the 2176 1982, worker their Alternatives?-- (August (OASI) two-thirds disability method having is 1983), the of ofa First, integration coveragesome among of plans public workers provide program and a lump-sum tbenefits heir dependen orprob periodic ably ts without also distribution raises emplothe yerofrelative coverage the policy's value was nonelderly workers covered population. by an employer Researchgroup conducted health by insurance the Employee plan in Benefit 1982 earned Research more benefits. Together, disability insurance and pension plans provide long-term coverage total group disabilit disability from y any and or source life death. during insuraAlthough ncthe e pl yeaans r.no isThese population potentiall people--totalling y survey less regressive data 30exist million than to many, particularly for workers who are employed only part-time or during part No coverage, Part-year 70.7 55 0 15.7 29.3 pp. 6 and 16. b Items may not add to totals because of rounding. Summary: 8 Medi Summary: anycaid. source ..... 30.3 48.2 insurance. These benefits, together with employee pension plans, are the insurance full-time Part-time sufficient than $40,000. C.workers employees is work Efficiency probably history with 62.3 also of indisability covered Tax quitePreferences: employment, 18 evenly insurance 8 distributed plans many What43.8workers contributed Areamong theareworkers. Alternati not 3to 7.4 the currently ves?-- plan; As a face m of Proposals fin osatemployer-pro ncing value prominan health toto vided re tworkers vise care. pubdisability or lic- who elimin pLast rogram become ayear, te insurance disabled. tax alte thern preferences at Congress cover iveaSecond, ge to to considered for higher-w some empl employer oyer- plans age legisl provi workers. pay group daed tion thehealth face th life at Institute (EBRI) and others indicates that income is an important determinant disability taxing in 1982--are employer Thecoverage the pricing largest contributions for of employer segment abouit to 92 ofgroup he percent the althuninsured health insurance. of insurance full-time in the InUnited also permanent turn, encourages States. theworkers lossbroad of in document the prevalence and distribution of life and disability insurance of the year. In 1982, 29.4 million part-time or part-year workers were LLooss ss-S -S14,999 14,999 19.44. 1 7 33.468.2 14.53 6 .4 a Full-year Participation is defined 66.7 as coverage 27 9 by a time 38.8 off, insurance,33.3or pension c Includes civilian nonagricultural wage and salary workers and $$15,000- 15,000- 29,999 24,999 49.8 28.6 76.791.9 38.314.2 major Part-year elements of most 60.3 employee 13 benefit 8 packages. 46.5 Unlike pensions 39.7 that result, vEmployer insured employee insurance. alue, plan self-employed orby taxing The contributions to contributions athe multiple In which taxDI employer 1983, exemption workers. program. theofabou to employer for the contributions disability t of In face disability 55emplo 1983, percent contributes. value, yer and only tcoinsurance, of of ontributions life about these the all insurance, Employees policy 62 workers benefits percent howe to for ver, like subject were he(including accidental aof lth are health all insured insur to workers low--usually ainsurance adeath employer nc minimum (either e were are or would insurance provide have bacome sic health from several insurance quarters. for people The Administration who lose employerhas coverage proposed asa of individu In Theal1982, common health two-thirds allegation insurance of all that purchase workers employer among who participated health people insurance without in aaccess employer benefitsto worker medium-size participation and large in employer establishments. plans. InSimilarly, general, the nearly packageallof full-time benefits benefits disability among and life workers, insuran published ce coveradata ge among from low-in a national come workers survey of is potentiall medium-size y covered by employer group health plans. About half (44 percent) of these 30,000- 25,000- 39,999 39,999 26.86.0 86.693.4 20.57.2 SOUR Self-employed CE: service EBRI requirement tabulations53.6before of thetheyMar30.8 care h 1983 eligible Current for 22.8aPopulation benefit are 46.4 Surve counted y (U.S.as 40,000 orDepmore artment of Commer35.1 ce, Bureau of the 86.5 Census). 26.8 40,000 or more 4.4 90.7 5.3 provide for the future economic security of workers, however, health, currentl contributions insured lower. lessparticip than ybybeing aone nts Social to percent reevalu pension evenSecurity if of ated plans) they employee for ashave as adisability earnings. employee potential not met the earnings benefits. sour Private requirement ce of would pension Estimated newprobably atfeder plans thea1983 ltime target are revbenefit enues. of seldom the the dismemberment; contributions, acap permanently result on theof tax or unemployment. are in currently) execases mfavored ption ofof by byAll accidental employer OASI. theoftax these Sur code. contributions vdismemberment, ivors' proposals Unlike benefit fhe ato iled alth disability payments health in insurance, Congress insurance, from is presumed. however, the because both OASI disability insurance plan were guaranteed long-term disability benefits, after coverage that primarily permanent insurers from high-income workers an areemployer; willing (96 workers percent) to if employers underwrite is in not these supported did forestablishments not a by provide small nation employee alhealth participate populcoverage, group ation issurvey inmost less an workers and 6 Bud8et large were ofestablishments the covered U.S. Government, as thesuggest dependents Fiscal that of life Year other and 1985covered ,disability Specialworkers. Anainsurance lysis G. benefits survey. In contributory plans, only employees who elect and contribute to 7 Figure includes estimated total 1984 Medicare HI trust fund disbursements The views expressed in this statement are solely those of the author and adisability, disbursements Includes and all fromlife people the insurance DI trust under fund proage vide were65current $17.9 livingbillion. economic in families security offorcivilian workers low- trust to contributory. raise and fund middle-income revenue in 1982 totaled and workers to ne discour arlwho y a$ge constitute 34 billion. generousmosthealth of theinsurance working population. benefits in In their disability 1982, coverage projected nearly andarelife public counted allinsurance full-time cost as participants. was benefits workers prohibiti are ve. (99 Benefits notpercent) Even fullytoso, tax-exempt. which whomostparticipated the proposals employer Workers for in does payaa The integration, generous low-income data.tax Rarevenues tes (per workers of of premium worker to 50 would betodollar) gained, coverage 60not percent than howe purchase byvthe er, employer ofbenefit mprivate apre-dis y beplaapackage bility small nshealth arecompared available high earnings, insurance. andto stable to the 3subject members potenti Economic at aall lto of employer-provided are aboutAn as important widely basic caveat held group among life is ininsurance workers order, however. plan. as health No insurance. research exists The that data and 75 percent of estimated 1984 SMI trust fund disbursements reported in: Dependents' coverage from employer health plans is also an important should nonagri not cultural be attributed workers in to 1982. the Employee Benefit Research Institute, its SOURCE: EBRI tabulations of the March 1983 Current Population Survey (U.S. SOURCE: EBRI tabulations of the March 1983 Current Population Survey (U.S. not contribute are outside the scope of the survey. Only current SOURCE: EBRI tabulations of the March 1983 Current Population Survey (U.S. U.S. Department of Health and Human Services, Health Care Financing officers, trustees, sponsors, or other staff. Department of Commerce, Bureau of the Census). Department of Commerce, Bureau of the Census). and their families. For most workers, these benefits are their only private Department Unlike Long-term State workers' employer ofdisability Commerce, compensation contributions Bureau insurance programs ofto the health plans Census). are insurance, also usually an important however, integratesource employer Social of no national cemployer osts individual employees of The plans. jhealth eopardizing le income are vel insurance The counted tax ofmost a system on Soci arecent plan--including sthe alparticipants; of vaSe lue cu Advisory pri rity vof ateemployer expenditures insur both Council retirees ance macontributions joron that whoproposals Soci foparticipate protects ral dis Security to ability to dis more apro bility invthan also ide and the levels of earnings above $15,000. Even though workers who earned less than research a larger has plan.consistently By offeringfound healththatbenefits the lack to of all health employees, insurance employers poseswhoa do presented cuments Nearly in(I)thethe all following distribution disability sections insurance ofareempdrawn loyer-provided plans fromintegrate the Level disabilit disability of Benefits y insur income a(LOB) nce Administration, Bureau of Data Management and Strategy, "Summary of the 1983 source of health insurance coverage among nonworkers, and particularly among b The Civilian Health and Medical Plan of the Uniformed Services. benefit program are excluded. Note: Items may not add to totals because of rounding. Annual Reports of the Medicare Board of Trustees, He 13alth Care Financing Review contributions insurance insurance or against totolife the disability insurance economic insur disruption less ance, than $50,000. of pensi illness, ons, Individu and permanent basic al disability income group taxes life or health advocated asurvi disability Security, In vors' cludes insurance aworkers' benefits, insur tax nonaagri to nce cap, cultur the compensation, gisuggesting cover avunemployed- len athe gecivilian share for that orrelyother most of Congress workers on all edisability-related mworkers: ployer workers who earmark hereported alth co currentl vperage art insur yof employer public ance by insured the plans workers' gener program group for aas l 12 130 significant Private million workers pension barrier aplans nd to dependents. health do not care integrate Ecaccess onometricamong Social estimlow- ates Security and of private middle-income benefits health as purchase $15,000 reported insurancesomewh (either at lower primary rates coofverage employeror coverage stop-loss incoverage 1982, however, for a from (including Socialpension Security, coverageworkers' that procompensation vides immediateinsurdisabilit ance, y or retirement) other public or 5:2 (Winter 1983), pp. 3 and 8. Unpublished Medicaid spending estimates were children. In 1982, more than half of all nonworkers under the age of 65 (52 Deborah J. Chollet is a Research Associate of the Employee Benefit Research health insurance coverage at any time during 1982; excludes workers in a Includes civilians who reported employer group health insurance coverage commonly as long-term disability insurance plans. In 1982, only 45 percent of ab Includes The employee civilianor dependents nonagriculturalmay workers, be coveredexcept by athose working livingspouse's in families plan provided by the U.S. Department of Health and Human Services, Health Care death. Institute, a non-profit, non-partisan public policy research organization. afamilies t any time in during which the 1982,greatest except ecairner viliansis alivmember ing inoffamilies the Armed in whi Forcches the or the primary providers of health insurance. insurance are usually calculated on the basis of employee earnings. Since all these compens payments. in instead pri benefits, ation vwhich ateThat of,pension plans theor offers is,greatest inis the addition paanearly rticip plan rough earner ants subtracts to, uni idevaersal. participation in of is the amedium-size the member pHowever, otential amount inofthe ofand these publi the these surveyed clarge Anmed plans cpayments ostestablishments employer Forces th pay at might benefits from or plan. the be an are insur II Social apnce aid, pur however, Security chase among on replacement benefits workers and ractu atestheir allyvarydependents recei inversely ved from suggest with a dis that the ability signifi individuplan, ca alsnt Finan self-insured cing Administration. plan) may find that the incremental cost of providing health disability asssistance programs. Integration of public-program benefits b9asiAid c to lifeFamilies insurance with Dependent among all Children workers, (AFDC) or is (2)a state-based, the importancefederal of Before joining EBRI, she was a Senior Research Fellow at the U.S. an agricultural worker. greatest earner is a member of the Armed forces or an agricultural worker. agricultural worker. covered belonged wages. to plansForthat an integrated average-age ordisabled offset Social person Security with lifetime benefits. coveredIn matching program that provides income assistance for low-income families with 8 Estimates of noncoverage among the civilian nonelderly population I. Employer-Provided Department of Health Health and Benefits Human Services, National Center for Health general, employer white-collar contributions employees vary directly (professional-administrative with earnings, taxation and technical- of these cinsurance only including assocAll iafor tedcoverage work-related benefit disability with an in paidthe retirement, essentially disability. to benefit the disabled at program publi These the c worker. apparent sis time ystem provof The ided of gaps receipt. integration dis at in abilit public no ycost In of and insurance gener to public alife l, the numbers earnings 4 See, of for The atpeople ele the xam vel ple, minimum now of Aclan tovered ax wage, expendit C. by Monhei u1984 a res nt,employer Social Massociated ichaelplan Security M. would with Hagan,the Dis notMarc ability tax purcLhase exemption . Berk, Insurance private and of insurance 32 Employer Deborah is contributions J. low relative Chollet, to to Employer-Provided the health value insurance, of improved Health ascovreported erage Benefits: to in all Co the workers. veraKe, 1977 generally employer-provided range plbetween ans relative 14 and to other 16 perpri cent. vate and Members public ofsourccivilian es of rationalizes dependent children. total disability Eligibilityincome, criteria assuirng are established more uniformbylevels the states of earnings within I By comparison, 56 percent of all workers, and 70 percent of the ERISA Services Research, and served on the faculty of Temple University. b Items may not add to totals because of rounding. b Includes coverage from the worker's own employer group plan or from the Gail employee. R. Wilensky, Supplement "He alalth lifeInsuran insurance ce for plans, the notUnemployed: tabulated here, Is Feder may abe l pa bclerical yments Directworkers) would coverreplace ageare is more 62defined percent than twice as ofcoas predisability verage likelyprovided to have earnings. by an integrated the With worker's lifetime pension own National bro Provisions, ad federal Medical and guidelines. Policy Care Expenditures Issues (Washington, Survey, showed D.C.: noEmployee significantBenefit variation Research by nonagricultural worker families without private health insurance coverage or workforce, participated in an employer pension plan in 1983. Employee Benefit plan of another worker. plan contributions program employer contributory. as are benefits Most contributions blue-collar people is likely in who private to to (production) have be health disability less private regressi insurance workers. health plans ve insurance (estimated than Published has tax two ation recei effects. at data vof e$17.6 do eall mployer not billion First, or indicate part health the in of Legislation Needed?", Health Affairs 3:1 (Spring 1984), pp. I01-III. health Instititute, insuranc1984), e if itp.was94.not Anoffered-- EBRI asimulation nd largelyofpaid privfor--by ate health an emplo insur yer. ance covered workeremployer earnings. earnings plan atGat ailthe any R.average Wilensky time during wage, and 1982; earnings Amy K. indirect Taylor, replacement "Tax coverage Expenditures is 43 is percent. coverage and To replacement maximize aemployee mong workers participation and mitigating in the the plan, workanddisincentives to enhance the associated plan's publi insuran c ceprogram coverage. eligibility Circumstanti accounted al evfor idencmore e suggests than four-fifths that employer-provided of all people Resear I0 Inch 1982, Institute, 20 states "New provided Survey Findings Medicaid on coverage Pension Co for verage all and financially Benefit received as the dependent of another worker in 1982. whether pension plans that provide for immediate disability retirement are With 5 Deborah lifetime J. Chollet, covered Emplo earnings yer-Provided at the HeSocial alth Benefits Security , p.ceiling I00. ($37,800 in Health suggests Insurance: that 56-87 Limiting percent of Employer-Paid all covered Premiums," workers with Public 1979 Health family Reports income without eligible health personsinsuran under ce age coverage 18. Deborah in 1982. J. Chollet, Employer-Provided Health Entitlement," EBRI Issue Brief, No. 33 (Washington, D.C.: Employee Benefit d Published tabulation not available. cintegration Items mayofnotDI aand dd to other totals public because disability of rounding. transfers serves to rationalize 1984), insurance (July/August, earnings contributions. 1982), replacement table A2.is less onlyregressive 24 percent.tax burden, in turn, suggests that more 13 14 BudKet Employer likely Further, oftothe contributions integrate U.S. potential Government, Social torevenues life Security Fiscal insurance from and Yearother the 1985 in ,texcess apublic xSpe ation cialof program of Analysis $50,000 employer benefits. G. are health fully Benefits less cost-efficiency, 15 Congress than , pp. $15,000 of 22-24. employee thewould United not contributions States, have purch Congressional to asedthe private plan are Budget health generally Offi insurance, ce,keptDisabilit low. if yan disability and life insurance plans may be a critical source of income Rese witharcvery h Institute, high earnings Augustreplacement. 1984). Because earnings replacement by Social taxable as current income to the employee. Compensation: Current Issues and Options for Change (June 1982), p. 18. employer had not offered and contributed to their health insurance plan.