EMPLOYEE BENEFITS IN MEDIUM AND LARGE FIRMS, 1986

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00530R000400730008-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: August 27, 2012
• Sequence Number: 8
• Publication Date: June 1, 1987
• Content Type: MISC

Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
Employee Benefits in Medium
and Large Firms, 1986
U.S. Department of Labor
William E. Brock, Secretary
Bureau of Labor Statistics
Janet L. Norwood, Commissioner
June 1987
Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
 Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
Chapter 8. Plan Administration
In addition to the data on individual benefit plans, the sur-
vey looked at how various benefits are administered. The
great majority of the insurance and retirement plans were
sponsored by individual employers, and benefits typically
were offered independently, rather than as part of a flexible
benefits program.
Plan sponsor (table 86)
Single employers were the predominant sponsors of health,
life, sickness and accident, and long-term disability insur-
ance, and defined benefit pension plans in medium and large
firms. Nearly all plan participants in life insurance, health
insurance, long-term disability insurance, and defined benefit
pension plans were in single-employer plans. Eighty-seven
percent of sickness and accident insurance participants were
in single-employer plans; most of the remaining participants
were in State temporary disability benefit plans. (State disa-
bility plans are discussed in chapter 4.)
Multiemployer plans result from agreements between em-
ployers within an industry or related industries and one or
more labor unions. These plans allow employees moving
from one employer to another within the industry to receive
the same or similar benefits. Defined benefit pension and
health insurance plans were the most common benefits spon-
sored by multiemployer groups, and production employees
were the most likely recipients of such benefits. The scope
of the survey, which excludes several service industries and
small firms in other industries, such as contract construc-
tion and trucking, accounts for the small representation of
multiemployer plans.
Flexible benefits plans and reimbursement
accounts (table 87)
Traditionally, employers have offered their workers benefit
plans in a number of areas, such as health insurance, life
insurance, and retirement. Employees may have a choice be-
tween one or more plans in a benefit area, for example, be-
tween a commercial health insurance plan and a health
maintenance organization, but benefits in each area are
offered separately. In recent years, however, a new approach
to offering benefits has attracted considerable attention-
flexible benefits. In 1986, the Employee Benefits Survey
looked for the first time at two arrangements for offering
such benefits-flexible benefits plans and reimbursement ac-
counts.
Five percent of employees in medium and large firms were
offered flexible benefits plans, reimbursement accounts, or
both. These plans were more common among white-collar
workers (8 percent) than among blue-collar workers (2
percent).
efits plans, also known as cafeteria plans, al-
low employees to choose between two or more types of
benefits.38 The most common choices offered were health,
life and long-term disability insurance, pretax savings (sal-
ary reduction plans), added vacation days, and the option
of receiving cash instead of benefits. Less common choices
were added sick leave days, sickness and accident insurance,
educational assistance, child care expenses, legal expenses,
and adoption assistance. Pensions are usually fixed benefits
and not part of a flexible benefits program.
A reimbursement account, also called a flexible spending
account, provides employer funds, employee pretax money,
or both, to be used for expenses not included in a benefits
package. Typical expenses that may be reimbursed through
the account include health care coinsurance, deductibles, and
other out-of-pocket health expenses; and insurance premi-
ums, child care costs, and legal assistance. Reimbursement
accounts may be part of a flexible benefits plan or they stand
alone.
A large majority of employees participating in flexible
benefits plans or reimbursement accounts were required to
contribute toward the cost of their benefits, or were allowed
to contribute to obtain additional benefits. Most of these
contributions were in the form of a salary reduction
arrangement. 39
Individual benefit plans offered through a flexible benefits
plan were analyzed and included in the tabulations for specific
benefit areas in this bulletin.
" For this survey, a plan had to allow choices among two or more types
of benefits to be classified as a flexible benefits plan. Thus, plans that per-
mitted a selection in only one benefit (for example, a choice among several
health insurance options or plans) were not classified as flexible benefits
plans.
Regulations covering section 125 of the Internal Revenue Code allow
employees to designate a portion of their salary for full or partial payment
of certain benefit costs. Amounts so designated are known as salary reduc-
tion arrangements and are exempt from Federal income tax.
Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
 Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
Table 87. Flexible benefits plans and reimbursement
accounts:' Percent of full-time employees eligible, medium
and large firms, 1986
Provided flexible benents anu,u- 5
reimbursement accounts .................
Flexible benefits ............................ 2
With reimbursement accounts 2
Reimbursement accounts ............ 5
Freestanding reimbursement 3
accounts ................................
Not provided flexible benefits or
reimbursement accounts .................I 95
9
8
2
4
2
~
3
2
(x)
9
7
~
5
5
1
91
92
98
fle
' Flexible benefits plans, also k,
cafeteria plans, allow employees to choose between two or more benefits
or benefit options, including cash, in determining their individual benefit
packages. Reimbursement (flexible spending) accounts, which are used to
finance benefits or expenses unpaid by insurance or benefit plans, may be
part of a flexible benefits program or stand alone (freestanding accounts).
These accounts may be financed by the employer, employee, reduction or both. The
employee contribution is made through a salary ? Less than 0.5 percent.
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Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
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Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
Declassified and Approved For Release 2012/08/27: CIA-RDP90-0053OR000400730008-5
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