Employee Benefits - Useful Facts

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Who is eligible for benefits?

Eligibility is conditional upon:

Work status. Part-time employees are rarely offered benefits. In Minnesota, about 53 percent of firms offer medical insurance to full-time staff while only 12 percent offer it to part-time staff (see Figure 1 below). As expected, much fewer companies offer dental benefits to part-time workers than to full-time workers.
Amount of time you have worked for the company. Some components of a benefit begin the first day of work, others after 30 days, and others after one year of employment.
Waiting periods. Once you are eligible, you may still not have access to these benefits until a "medical waiting period" has elapsed. The vast majority (73 percent) of Minnesota employers implement waiting periods for full-time workers as a cost containment measure.
Other restrictions. Some plans require you to undergo medical exams/evaluations before enrolling. Some disabilities or pre-existing conditions (such as cancer or heart disease) might be excluded from health care coverage.

Figure 1

MedicalBenefits

Source: 2005 Minnesota Employee Benefits Survey Minnesota Department of Employment and Economic Development

Who pays the costs?

When comparing and evaluating benefit packages, it's important to look at how many benefits are included, and the share of costs you are responsible for covering. Some employers pass the entire cost to their workers, particularly those who are part-time.

Who pays the costs is especially important for the amount of company matching (if any) in pension or retirement plans. There are extreme differences between defined contribution and defined benefits plans (see Figure 2) as well as among defined contribution plans.

Figure 2

RetirementBenefits

Source: 2005 Minnesota Employee Benefits Survey Minnesota Department of Employment and Economic Development

Which companies offer the most generous benefits?

Each company offers its own unique benefits package. Sometimes there are variations because of firm size or industry.

Generally employee benefits offered increase as firm size increases, because it is cheaper for an employer to offer a plan to a larger pool of participants. The high participation rates in big companies also show that employees are satisfied with plans that have lower employee costs.

Benefits offered vary widely across industries. Manufacturing, financial, and education and health services are the generous industry sectors and offer more categories of benefits. By contrast, employers in the leisure and hospitality sector, which includes entertainment, accommodations, and food service businesses, tend to be the least generous.

Page last updated in July 2008.