FAQs About Benefits—General Overview

Employment-Based Benefits

The vast majority of Americans who have retirement and health coverage receive it through employment-based benefits from either their own or a family member's job. The employee benefit system in the United States today is a partnership among businesses, individuals, and the government. In general, benefits fall into three categories:

Voluntary Benefits: Most employment-based benefits, particularly retirement plans and health insurance, are provided voluntarily by businesses. The government supports these voluntary employment-based benefits by granting favorable tax treatment both to the employers that sponsor them and to the workers who receive them.

Mandatory Benefits: Certain other benefits, including Social Security, unemployment insurance, workers' compensation, and family and medical leave, are mandatory under federal or state law.

Individual Programs: The government also supports individual financial security programs through individual retirement accounts (IRAs), favorable taxation of life insurance contracts, and tax-free death benefits.

Frequently Asked Questions

How much do benefits cost employers?
In aggregate, how much is spent on benefits in the United States?
What does the private sector spend on benefits?
What do state and local governments spend on benefits?