Cafeteria Plan Statistics
For Companies with more than 100 employees
| Type | Total # of employees | Professional, technical, and related employees | Clerical & Sales Employees | Blue Collar and service employees |
| 1997 - Section 125 Cafeteria Benefits | 19,915,360 | 7,493,138 | 5,728,28 2 | 6,693,940 |
| 1995 - Section 125 Cafeteria Benefits | 18,421,559 | 7,178,193 | 5,370,399 | 5,873,968 |
| 1997 - Flexible Benefit Plans | 4,855,772 | 2,120,532 | 1,385,956 | 1,349,283 |
| 1995 - Flexible Benefit Plans | 4,086,002 | 1,842,611 | 1,202,510 | 1,040,682 |
| 1997 - Reimbursement Plans | 12,185,500 | 4,835,339 | 3,355,405 | 3,994,757 |
| 1995 - Reimbursement Plans | 12,686,085 | 4,975,847 | 3,738,134 | 3,972,104 |
Small Companies - Less than 100 employees
| Type | Total # of employees | Professional, technical, and related employees | Clerical & Sales Employees | Blue Collar and service employees |
| 1996 - Section 125 Cafeteria Benefits | 9,144,521 | 2,485,893 | 3,548,225 | 3,110,403 |
| 1994 - Section 125 Cafeteria Benefits | N/A | N/A | N/A | N/A |
| 1996 - Flexible Benefit Plans | 1,712,179 | 475,129 | 793,717 | 443,333 |
| 1994 - Flexible Benefit Plans | 952,485 | 128,975 | 526,602 | 296,907 |
| 1996 - Reimbursement Plans | 4,738,878 | 1,445,228 | 1,916,377 | 1,377,273 |
| 1994 - Reimbursement Plans | 6,684,174 | 1,814,055 | 2,620,126 | 2,229,990 |
BACKGROUND: FLEXIBLE BENEFITS
- Flexible benefits give a diverse workforce choice and control over their employer-provided health and dental plans, retirement savings, dependent care, group life and accident insurance and allow additional vacation.
- Under the Internal Revenue Code Section 125 establishing cafeteria plans, benefits offered under the umbrella of 125 may be offered on a pretax basis, so that the employee and employer do not pay federal or state taxes on the benefits. (Passed 1978, IRS regs 1984)
- Flexible benefits are offered by nearly 90 percent of employers with over 1,000 employees. (Hewitt, 1994) Approximately one-third of state and local governments offered flex plans, with more growing annually. (Bureau of Labor Statistics, 1992) Small employers are increasingly using flex - growing from just eight percent in 1991 (BLS).
- Approximately eight out of ten employers with flex plans offer health and/or dependent care accounts in their flex plans (Foster Higgins, 1996). Over half, 54 percent offer health care flexible spending accounts. Dependent care accounts are used by three to seven percent of employees offered flex. The average annual employee contribution for all size employers ranges from $2,500 - $3,000.
- Flexible benefit plans offering pretax benefits must pass strict discrimination tests and a "concentration" test so that the plans don't favor highly paid employees. (Complex rules)
- Health spending accounts allow medical expenses, not reimbursed by insurance) to be reimbursed to the employee on a pretax basis. A steady 20-24 percent of employees using flex take advantage of a health account. Average annual contribution for all size employers ranges from $400-800. It is usually used for deductibles and expenses not covered by insurance.
Sources
- Employee Benefit Research Institute Issue Brief, 1993
- Employers Council on Flexible Compensation, Washington, DC
- Foster Higgins, 1996 Survey of Employer-Sponsored Health Plans
- Hewitt Associates, 1994 Survey Edition
- U.S. Dept. of Labor, Bureau of Labor Statistics, Employee Benefits in Medium & Large Firms; Small Private Establishments; State & Local Governments