The vast majority of Americans who have retirement and health coverage receive it through employment-based benefits from either their own or a family member's job. The employee benefit system in the United States today is a partnership among businesses, individuals, and the government. In general, benefits fall into three categories:
Voluntary Benefits: Most employment-based benefits, particularly retirement plans and health insurance, are provided voluntarily by businesses. The government supports these voluntary employment-based benefits by granting favorable tax treatment both to the employers that sponsor them and to the workers who receive them.
Mandatory Benefits: Certain other benefits, including Social Security, unemployment insurance, workers' compensation, and family and medical leave, are mandatory under federal or state law.
Individual Programs: The government also supports individual financial security programs through individual retirement accounts (IRAs), favorable taxation of life insurance contracts, and tax-free death benefits.
Frequently Asked Questions