Finances of Employee Benefits, 1950-2006

Financing of the U.S. employee benefit system is a joint effort by employers and employees. Both employers and employees make payments to voluntary employee benefit programs that provide health insurance coverage, retirement benefits, and other benefits. In addition, employers and employees make payments to mandatory government social insurance programs - most notably Social Security and Medicare - which provide retirement income and health care coverage, respectively, for elderly and disabled workers and their dependents. Whether voluntary or mandatory, each of these systems is employment-based and financed primarily from earmarked employment-based contributions by the employer and/or the workers. This paper uses the latest data (for 2006) from the Bureau of Economic Analysis' (BEA) National Income and Product Accounts of the United States. A key finding is that retirement benefits are still the top source of benefit expenditures among both public and private employers, but that health benefits are catching up fast and are likely to outstrip retirement as the major benefit expense. The PDF for the above title, published in the January 2008 issue of EBRI Notes, also contains the fulltext of another January 2008 EBRI Notes article abstracted on SSRN: Retirement Annuity and Employment-Based Pension Income, Among Individuals Age 50 and Over: 2006