Cost of Employee Benefits Research

A new report released today by the Office of Advocacy of the U.S. Small Business Administration (SBA) details the cost of employee benefits by firm size. The report specifically looks at the cost of health insurance, pension plans, paid vacation, and sick leave.

The report finds that the offering of benefits and their associated costs can vary dramatically with firm size. For instance, the latest data show that the per-participant administrative costs of defined-contribution pension plans (such as 401(k) plans) are as much as 14 times more for the smallest firms than for their largest counterparts.

The authors also examined the share of all private industry employees eligible to enroll in health insurance plans. They found that about 40 percent of employees in the smallest firms were eligible for health insurance coverage while slightly more than 77 percent of the largest firms’ employees were eligible for health care coverage.

Joel Popkin and Company wrote the study, Cost of Employee Benefits in Small and Large Businesses, with funding from the Office of Advocacy.

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small businesses to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information and a complete copy of the report, visit the Office of Advocacy website at www.sba.gov/advo.