Working Paper Series 

Congressional Budget Office 

Washington, D.C. 

Health Insurance, Pensions, and Paid Leave: Access to Health Insurance at 

Small Firms in a Broader Benefits Context 

Jean Marie Abraham, PhD1

Division of Health Policy and Management 

University of Minnesota 

Thomas DeLeire, PhD 

Department of Economics 

Michigan State University 

and Congressional Budget Office 

Anne Beeson Royalty, PhD 

Department of Economics 

Indiana University-Purdue University Indianapolis 

June 2007 

Working Paper 2007-08 

 

1

 Please address correspondence to Jean Abraham at 420 Delaware Street SE, MMC 510, Minneapolis, MN 55455. 

Email: abrah042@umn.edu, phone: 612-625-4375. Abraham and Royalty acknowledge the support of the 

Commonwealth Fund. Also, we would like to thank Kosali Simon, participants of the 18th Annual Health Economics 

Conference, seminar participants at UC-Irvine, UC-Davis, IUPUI and the University of Minnesota, and numerous 

people at the Congressional Budget Office for helpful suggestions. Working papers in this series are preliminary and 

are circulated to stimulate discussion and critical comment. They are not subject to CBO’s formal review and editing 

processes. The analysis and conclusions expressed in them are those of the authors and should not be interpreted as 

those of the Congressional Budget Office. References in publications should be cleared with the authors. Papers in 

this series can be obtained at www.cbo.gov/publications. 
1

INTRODUCTION

Workers employed at small firms are substantially less likely to be offered health 

insurance than those at larger firms. Policymakers and researchers have long sought ways to 

increase access to employer insurance for workers at small firms but with little success. Most 

policy proposals and reforms—for example, the small group insurance reforms enacted by many 

states in the 1990s—have been directed specifically toward health insurance and based on the 

assumption that the firm-size “offer gap” in health insurance is caused by problems unique to 

such insurance. Yet there may be an even more fundamental issue. At small firms wages are 

lower and workers are less likely than those at large firms to be offered retirement plans, paid 

sick leave, paid vacations, paid holidays, and life insurance. In fact, they are less likely to be 

offered every benefit on the extensive list of benefits on which the National Compensation 

Survey collects data except year-end or holiday bonuses (U.S. Bureau of Labor Statistics, 2006). 

Therefore, it is important to consider health insurance in the broader context of benefits offered 

by small firms. 

In this paper, we provide that context. We show how employer size affects the provision 

of several components of compensation—health insurance, retirement plan, and paid vacation. 

This analysis demonstrates the extent to which health insurance access represents a unique 

challenge for workers at small firms and to what extent it is part of more general compensation 

issues. We compare health insurance with these other two benefits to help identify what drives 

the disparities in health insurance by firm size. 

There are three commonly cited explanations for variations in the provision of benefits 

according to firm size. First, if the per-worker administrative costs of a benefit decrease with 

firm size, larger firms will be more likely to provide that benefit. Second, if benefits are 
2

demanded relatively elastically and if workers in smaller firms tend to receive lower total 

compensation, those workers will prefer a smaller share of that compensation in the form of 

benefits.2 Third, smaller firms might be more susceptible to failures in insurance markets. For 

example, concerns about adverse selection might result in especially costly insurance premiums 

for the group. Small firms might be less likely to provide health insurance for any one of these 

reasons. 

We find evidence that differences in offer rates for the three benefits persist even when 

we control for wages and household income, and that the gap between offer rates at smaller and 

larger firms is at least as large for retirement plans as for health insurance. We also find gaps—

though somewhat smaller—in the offer rates of paid vacations between workers at smaller and 

larger firms. These findings, taken together, suggest that of the three aforementioned reasons, per 

capita administrative costs may be a significant driver of the disparities in offer rates across firm 

size, though it is also possible that workers in smaller firms differ from those in larger firms in 

their preferences for receiving compensation in the form of benefits. We argue that incremental 

reforms targeted at reducing administrative costs should be explored as a potentially effective 

strategy for improving small-firm workers’ access to health insurance. In our conclusion, we 

discuss current policy proposals—such as Association Health Plans or plans that allow small 

private-sector firms to buy in to the Federal Employee Health Benefits Program—and the 

likelihood that such plans could reduce administrative costs. 

 

2

 Similarly, the tax exclusion of employer-sponsored insurance provides a larger benefit to workers that face higher 

marginal tax rates. To the extent that workers in smaller firms have lower total compensation on average, they also 

likely face lower marginal tax rates than workers in larger firms and may be less likely to demand employersponsored insurance. 
3

Previous Research 

It is well documented that workers in small firms are significantly less likely to be 

offered health insurance. For example, data from the 2004 Medical Expenditure Panel Survey 

(MEPS) Insurance Component (IC) show that only 42 percent of establishments with fewer than 

50 workers offer health insurance, in contrast to 96 percent of establishments with 50 or more 

workers (www.meps.ahrq.gov, 2007). Previous work (McLaughlin, 1993; Morrisey et al., 1994; 

Fronstin and Helman, 2000) has suggested that small firms are less likely to offer health 

insurance for a number of reasons including higher premiums, higher per capita administrative 

costs, and lack of demand by small-firm employees. Gabel and Pickreign (2004, p. 5) succinctly 

sum up the issues: “Burdened with inherently higher administrative costs, having fewer lives 

over which to spread the risk of catastrophic costs, and lacking the purchasing power of large 

firms to negotiate with insurers, small employers are doomed under current practices to separate 

but unequal status.” 

Research on the effect of premiums has focused on employers’ price sensitivity, starting 

with the assumption that whatever the particular issues small firms face in the health insurance 

market, these issues show up as higher premiums. While some of these studies have also 

separately controlled for firm size or wage levels, they have emphasized responsiveness to 

premiums as the key question (Gruber and Lettau, 2004; Marquis and Long, 2001; Hadley and 

Reschovsky, 2002; Feldman et al., 1997). However, knowing that employers are responsive to 

premiums in offer decisions, as these studies find, does not tell us all we need to know about the 

underlying reasons for premium differences by firm size or the importance of barriers to 

insurance provision such as administrative costs or low demand by workers. 
4

Another set of relevant studies analyzes the effect of state-level small-group reforms. 

Various reforms have tackled several possible problems that could affect whether a small firm 

offers health insurance if the key underlying issue is specifically one of insuring a small group: 

guaranteed issue, guaranteed renewal, portability, preexisting conditions, and rating restrictions, 

for example. These studies find little evidence that the reforms increased coverage as was 

intended. Two analyses find insignificant effects of the reforms on coverage (Monheit and 

Schone, 2003; Buchmueller and DiNardo, 2002), as does a third focusing specifically on the 

effects of purchasing alliances (Long and Marquis, 2001b). Another study (Simon, 2005) finds 

that small-group reforms could in some cases lead to no increases in coverage or even decreases 

if they also cause premiums to go up. However, another possibility is that the reforms did not 

address the primary causes of the problem for small firms and that there are even larger obstacles 

than the insurance market issues addressed by the reforms. 

A few researchers have examined the relationship between a firm’s provision of 

insurance and worker demand for it (Bundorf, 2002; Levy and DeLeire, 2003; Monheit and 

Vistnes, 1999). Worker demand may be related to several factors, including the affordability of 

the coverage, which may depend not only on the employee’s contribution to the total premium 

and the perceived quality of coverage (e.g., plan type, deductibles, coinsurance, and covered 

benefits) but also on family income. Bundorf and Pauly (2006) use a variety of definitions of 

affordability and estimate that between one- and three-quarters of the uninsured cannot afford 

health insurance. Levy and DeLeire (2003) find that poorer households without health insurance 

tend to spend more on housing than similar households with insurance, suggesting that the high 

cost of necessities such as housing might make health insurance unaffordable. In more recent 

work, Monheit and Vistnes (2006) report that workers are less likely both to be offered and to 
5

enroll in health insurance if they have weak preferences for health insurance (based on their 

answers to questions such as whether health insurance is worth the cost). For the most part, these 

studies do not address differences by firm size, although we do know from Levy (1998) that 

workers in small firms who are offered insurance often face higher premium contributions than 

their counterparts in larger firms and that among small businesses that offered coverage in 2003, 

nearly one-third provided less than a 50% subsidy for the cost of family coverage (KFF/HRET, 

2003). 

In this paper, we focus on offer-rates by workers’ wage, income, or compensation levels. 

Low-wage workers are employed disproportionately by small firms and are at particular risk of 

being uninsured. A number of studies using several different data sources have demonstrated that 

low-wage workers are much less likely to have access to employer-provided health insurance 

than higher-wage workers. Using the 1999 Current Population Survey, Garrett and colleagues 

(2001) document that only 66 percent of workers earning less than $7 per hour worked at firms 

that offered employer insurance as compared to 94 percent of workers earning $15 per hour or 

more. Low-wage workers were also substantially less likely to be eligible for an employer plan, 

further widening the gap in access. Collins and colleagues (2003), using data from the 

Commonwealth Fund 2001 Health Insurance Survey, find that 53 percent of workers earning less 

than $10 per hour were eligible for an employer plan while 87 percent of those earning $15 or 

more per hour were eligible. This gap, along with differences in take-up and access to insurance 

from other sources, translates into a much higher rate of uninsurance for low-wage workers: 27 

percent as compared to 4 percent for those earning $15 per hour or more. Employer data show 

similar patterns (Long and Marquis, 2001a; Glied et al., 2003). 
6

 Thus the lower average wage paid by small firms represents another possible reason for 

the disparity in offer rates between smaller and larger firms. However, studies focusing on the 

relationship between firm size and health insurance offering have tended not to emphasize that 

low levels of compensation might be a large part of the explanation. Yet the existing research 

linking wage and income to lack of access to employer insurance suggests that low wages, not 

firm “smallness” per se, may indeed explain the offer gap between small and large firms, in 

which case a policy emphasis on small-firm problems is misplaced. This view is supported by 

evidence that the offer rate for high-wage small firms is very similar to that of large firms (Lee, 

2002), suggesting that the offer gap may be driven by wages rather than firm size. However, 

several studies of the link between health insurance access and wages leave unanswered some 

questions about small firms and health insurance, suggesting that the explanation for the firmsize offer gap is complex. For example, Glied and colleagues (2003) show that even after 

controlling for levels of average payroll per employee (their measure of wages or income), both 

firm size and establishment size have strong and significant effects on establishment offer rates. 

Establishments with 500-999 employees had over 11 times greater odds than those with fewer 

than 25 workers of offering health insurance, controlling for average payroll, unionization, 

industry, percent of workforce that is temporary, and percent of workforce that is female. 

Similarly, Garrett and colleagues (2001) show independent effects of both wage level and firm 

size. They document strong wage effects on access to employer insurance but also find that, 

holding wage levels constant, workers at larger firms are still more likely to have access to 

insurance. 
7

We next analyze these relationships in greater detail, looking at health insurance 

disparities by firm size in the context of total worker compensation, including not only wages but 

also retirement plans and paid vacation. 

DATA AND MEASURES

 The primary data source we use for this analysis is the Household Component (HC) of 

the 1997-2003 Medical Expenditure Panel Surveys (MEPS), fielded each year since 1996 by the 

Agency for Healthcare Research and Quality. The MEPS-HC sample is drawn from respondents 

to the National Health Interview Survey, which provides a nationally representative sample of 

the noninstitutionalized civilian population of the United States. The MEPS contains individual 

and household-level data on demographic characteristics, income, employment, and health 

insurance coverage. The survey uses an overlapping panel design consisting of five rounds of 

interviews and follows households over a 2.5-year period. 

The MEPS includes several employment and compensation measures, including 

respondents’ wage rate for their current main job. Surveyors top-coded all wage rates above the 

99th percentile and then recoded these to the maximum reported value (99th percentile). Based on 

the empirical wage distribution, we created a categorical variable with break points at the 10th, 

20th, 30th, 40th, and 50th percentiles.3 In addition to wages, the MEPS also asks workers about 

employer-provided benefits. From this information we defined a set of binary indicator variables 

that correspond to whether a worker has (a) an offer of health insurance through his or her 

employer, (b) a retirement plan, and (c) paid vacation as part of total compensation. 

 

3

 The wage category breaks are as follows (rounded to 0.05): 10th percentile—$6.75; 20th percentile—$8.00; 30th

percentile—$9.50; 40th percentile—$11.00; median—$12.85. All wage rates are expressed in 2003 dollars. 
8

 The MEPS contains two variables relating to firm size: number of employees and a 

binary indicator for whether the firm has more than one location. Three binary indicator 

variables for the number of employees measure different sizes of small firms: whether the 

establishment has 10 or fewer workers, 25 or fewer workers, or 50 or fewer workers. Other 

employment characteristics include the worker’s job tenure measured in years, whether the 

worker is a member of a union, and a set of binary indicators for industry category. Finally, as a 

way to capture local labor market conditions, we also include the unemployment rate for the 

county in which the worker resides (www.bls.gov, 2006). 

In addition to the compensation and employment variables, we include a set of measures 

to capture a worker’s demographic and human capital attributes. These measures include age, 

age squared, education, education squared, race, sex, marital status, household income, and 

household income squared. Because there may be variation in the provision of benefits 

geographically and over time, we also include a set of geographic region dummies (Northeast, 

Midwest, South, West [excluded]) and a set of year indicator variables (2003 excluded) to 

control for these effects.4

 

Our study population is restricted to individuals who are between the ages of 18 and 64 

who are employed during round 1 of the MEPS survey, not self-employed, and not full-time 

students. After removing observations with incomplete information on employment and benefits, 

we have 25,920 workers, of which 24,217 are employed full-time, which we define as working 

 

4

 We considered several additional measures in our empirical analyses. These included the number of HMOs 

operating in the worker’s county of residence as a way to control for the supply side of the health insurance market 

(InterStudy, 2006); state-level measures to capture mandates for inpatient mastectomy, infertility treatment, and 

mental health parity coverage (Health Policy Tracking Services, 2004); and a set of indicator variables to measure 

state-level, small-group reforms (e.g., guaranteed issue, premium rating bands, etc.). Since none of these measures 

were large in magnitude and/or significant in our results, we opted to report a more parsimonious model 

specification. The set of results that include these measures is available by request. 
9

25 or more hours per week.5 Table 1 reports descriptive statistics for both the overall and fulltime worker samples. 

METHODS 

I. Establishment Size, Health Insurance, and Other Compensation 

 We first present some descriptive analyses in order to demonstrate the circumstances 

under which workers are offered health insurance. In particular, we use the MEPS-HC to 

document that workers in small establishments are less likely than those at larger establishments 

not only to be offered health insurance but also to be paid high wages, given retirement plans, 

and granted paid vacation benefits. 

Next, we determine the extent to which the difference in health insurance offer rates 

between small and larger establishments can be explained solely by wage differences based on 

establishment size. To do this, we calculate and graph the probability of health insurance offers 

by establishment size conditioning on wage levels. To the extent that this difference exists in the 

wage category, the health insurance offering gap is not merely the result of workers at smaller 

establishments receiving lower wages. 

 Finally, to explore whether firms tend to offer a whole set of benefits or none at all, we 

graph the probability that workers will be offered health insurance conditional on their being 

offered other benefits (e.g., retirement plans, paid vacation). 

 

5

 In the next section, we restrict our estimation sample to full-time workers. As reported in Buchmueller and Lettau 

(1999), health insurance appears to be the only benefit with a truly quasi-fixed cost, implying that the cost per hour 
10

2. Why Small Firms Are Less Likely to Offer Health Insurance 

In the second part of our analysis, we explore possible reasons why the provision of 

health insurance benefits might vary with firm size. We suggest three leading explanations. First, 

workers at small firms have lower wages on average and so are less able to afford health 

insurance. Second, a firm that decides to offer a health insurance plan incurs administrative 

costs, which are likely to be even higher if the firm offers a choice of plans. For example, 

employers are likely to incur costs associated with shopping for a plan, enrolling and 

“disenrolling” employees, and collecting employee contributions toward the premium. If the perworker administrative costs of a benefit decrease with firm size, larger firms will be more likely 

to provide that benefit. Finally, smaller firms might be more susceptible to failures in insurance 

markets, and therefore insurance may be unreasonably costly or even unavailable. Thus, small 

firms might be less likely to provide health insurance because of workers’ lower compensation 

rates, differences in administrative costs, or differing degrees of insurance market failure. 

 Our approach to distinguishing the relative importance of these three explanations is to 

use variation in the provision of different types of benefits across workers at firms of different 

sizes and of different average total compensation levels. In our analysis, we estimate the models 

in a multiple regression framework using linear probability models to estimate the probability 

that a worker is offered a particular benefit. Let 

,

5

1

ij

k

k Bij Xij Smallij k Wageij = β + γ +∑δ +ε =

 (1) 

where Bij is an indicator of whether worker i in establishment j is offered a particular benefit 

(health insurance, retirement benefits, or paid vacation), Xi is a vector of the worker’s 

 worked is greater for part-time employees than for full-time employees. By restricting the analysis to full-time 

workers, we avoid picking up differences in different benefits along this dimension. 
11

demographic and local labor market characteristics, Smallij is a binary indicator variable for 

whether the worker is in a small establishment, and Wageij

k is an indicator for whether the worker 

receives a wage in the k

th decile of the distribution of wages.6

 These models allow us to control 

for demographic and labor market variables when estimating differences (described below) by 

establishment size and when making comparisons between benefits. 

Our first step is to determine whether small firms are less likely to offer benefits because 

they are small (and therefore more likely to be susceptible to insurance market problems or to 

have higher administrative costs) or because small firms tend to provide lower total 

compensation on average. To do this, we estimate separate regressions for each benefit (health 

insurance, retirement, and paid vacation), controlling for demographic and human capital 

variables, region, union, industry, and year indicators, with a dummy variable for small 

establishment. We compare this to similar regressions that also include dummy variables for the 

worker’s wage decile and a polynomial in household income. We expect the five wage decile 

dummies (for the 1st, 2nd, 3rd, 4th, and 5th deciles, relative to the omitted category of “above the 

median”) and household income to account for differences in worker demand for benefits due to 

differences in total compensation levels.7,8

By using the categorical dummy variables based on wage deciles, we avoid picking up 

any compensating differentials for fringe benefits that might offset such effects if we used the 

worker’s wage itself. A comparison of the small-firm effect for health insurance (as well as the 

other benefits) offer rates in the regressions that include and exclude the wage decile variables 

 

6

 The omitted category is “above the median.” In some specifications below, we extend this empirical model to 

include multiple definitions of small establishment. 

7

 We note that some workers have the good fortune to be in “good” jobs that both pay well and offer benefits. 

8

 In a robustness check of our model specification (described below), we use a constructed measure of total 

compensation as an alternative to wage deciles. This measure uses both reported wages and imputed values of fringe 

benefits from the U.S. National Compensation Survey, Employer Costs for Employee Compensation Summary. 
12

indicates both (a) the extent to which commonly used estimates of this effect are actually due to 

lower compensation levels and (b) how large the independent effect of size remains after 

controlling for compensation level. 

Our second step is to determine whether insurance market failure resulting from small 

group size can explain the difference in the likelihood that workers in small and larger firms will 

be offered health insurance. In these analyses, we control for the effects of income and wages, as 

discussed above, to capture workers’ demand for health insurance. Any remaining difference in 

offering by firm size likely results from influences unrelated to total compensation. What might 

explain this difference? One possibility, as Monheit and Schone (2003, p. 238) have noted, is 

that “[s]mall groups may be unable to establish a sufficiently large and stable risk pool to absorb 

the costs of expensive, low probability medical events.” The result of this lack of access to a 

large risk pool may be that small firms either are unable to offer insurance or can offer it only at 

much higher premiums than otherwise comparable larger firms. 

To determine the importance of insurance market failures, we compare the differences in 

the likelihood that workers in small and larger firms will be offered health insurance with the 

differences in their likelihood of receiving a retirement plan. The logic behind this comparison is 

that a retirement plan is a benefit unlikely to be affected by insurance market failures. If 

insurance market failures are important in explaining the difference between the health insurance 

offering rates between small and larger firms, and if fixed administrative costs are similar for 

retirement plans and health insurance, then the firm-size difference in offering rates should be 

larger for health insurance than for retirement plans. 

For exact identification of the effect of insurance market issues in causing the firm-size 

gap in health insurance, we would need to make the overly strong assumption that the decline in 
13

per capita administrative costs as the number of employees increases is exactly the same for 

health insurance and retirement plans.9

 While we do not argue that this strong assumption is 

justified, we argue that any empirical similarities in the propensity of workers to be offered 

health insurance and retirement plans by establishment size is evidence against a primary role for 

market failures specific to insurance markets in explaining the health insurance “offer gap.” 

Certainly, insurance problems represent a class of issues affecting health insurance but not 

retirement plans. If those problems are the major cause of the difference in health insurance 

offers between small and larger firms, we would expect to see larger differences in health 

insurance than for retirement plans by establishment size once we control for income, wages, and 

a variety of demographic and human capital variables (as well as allowing for different overall 

levels of demand and costs of supply for the two benefits through the intercepts). These 

comparisons will provide evidence of the extent to which insurance is a greater problem for 

small firms than other fringe benefits that also carry substantial administrative costs. 

Our final step is to determine whether differences in administrative costs might explain 

the differences in health insurance by establishment size. To do this, we compare the difference 

in the probability that workers in small versus larger firms will receive a benefit (paid vacation) 

that has much lower administrative costs relative to health insurance and retirement plans. This 

comparison is useful in helping to provide bounds on the importance of administrative costs for 

the health insurance offer gap. The identifying assumption in this case is that there are relatively 

low administrative costs associated with administering paid vacation and much more substantial 

costs (but no additional insurance market costs) to offering retirement benefits. 

 

9

 We pursued several avenues for obtaining direct evidence on employer costs associated with administering fringe 

benefits. These efforts included interviews with human resources managers and benefits consultants as well as 

searches for published summary statistics. But despite our efforts, we were unable to obtain detailed information on 
14

Laying out the model more formally: 

[Pr( 1 , ) Pr( 1 , )],

[Pr( 1 , ) Pr( 1 , )]

i i i i

i i i i

Retirement Plan Small Firm X Retirement Plan BigFirm X

HI Small Firm X HI Big Firm X

− = − =

= − = (2)

where i subscripts the individual worker, HIi represents whether the individual is offered health 

insurance by the employer, and Xi is a set of individual worker characteristics such as education, 

age, race, gender, region of residence, wage, and household income. Again, if insurance market 

failures are important in explaining the difference in offering rates by firm size and if fixed 

administrative costs are similar for retirement plans and health insurance, then the offer gap 

between small and large firms should be larger for health insurance than for retirement plans. 

These comparisons will provide evidence on the extent to which insurance is a greater problem 

for small firms than other fringe benefits that also carry substantial administrative costs. 

We estimate a similar equation when determining whether the firm-size offer gap can be 

explained by differences in administrative costs by comparing the difference for paid vacation 

and retirement plans. Thus, by using information on several types of benefits that share particular 

attributes (e.g., high administrative costs or insurance provision) and a difference-in-difference 

econometric approach, we identify the relative importance of administrative costs, worker 

demand, and insurance market failures for explaining the gap in health insurance provision 

between large and small firms, under the strongest version of our assumptions. More cautiously, 

we are able to provide guidance on the relative magnitude of these effects and on the relative 

importance of these explanations of why workers at small establishments are significantly less 

likely to be offered health insurance. 

 

administrative costs for the various benefits, due to either lack of availability or the proprietary nature of the 

information. 
15

RESULTS

I. Establishment Size, Health Insurance, and Other Compensation 

 We begin by documenting patterns of health insurance offers by establishment size and 

across the wage distribution.10 In Figure 1, we illustrate the relationship between establishment 

size and health insurance, based on the MEPS data. There is a steep gradient, with approximately 

50 percent of workers at the smallest establishments (2-10 employees) offered health insurance 

and with that percentage rising to over 90 percent for workers at establishments that employ 100 

or more. 

 However, as Figure 2 illustrates, low-wage workers are also much less likely than higherwage workers to be offered insurance. The increase across the wage distribution in the 

percentage of workers offered employer health insurance is even more pronounced than the 

increase across the establishment size distribution, with only 30% of workers in the lowest wage 

decile being offered insurance through the employer and 90% of workers above the median wage 

having an offer. 

 The patterns depicted in Figures 1 and 2 are, in fact, at least somewhat related since wage 

levels are positively correlated with establishment size: the probability of working at a very small 

establishment is almost 2.5 times as great for a worker in the first wage decile than for a worker 

with a wage above the median; the probability of working at a large establishment (with more 

than 100 workers) is more than three times greater for a worker with a wage above the median 

than for a worker earning a wage in the first decile. Figure 3 shows how workers of different 

wage levels are distributed across establishments of different sizes. 

 

10 All empirical analyses use MEPS sampling weights that are adjusted for the complex sampling design. Data are 

weighted to represent 76 million workers. This number is smaller than what is reported in national estimates, since 

we excluded those workers who had missing information, as well as workers who did not meet the age, education, 
16

 To begin to sort out the separate effects of wage or compensation levels from 

establishment size on employer-offered health insurance, we stratify by wage category (each 

wage decile below the median and for all workers above the median) and graph offer rates by 

establishment size separately by wage category. These results are displayed in Figure 4. There is 

a substantial establishment size gradient in each wage category. For example, workers in the 

lowest decile are 42 points more likely to be offered employer insurance if they work at an 

establishment of 100 workers or more than if they work at an establishment with fewer than 10 

employees. However, the differences between the wage categories are also striking. Workers at 

the smallest establishments who earn above the median wage are more likely to be offered health 

insurance than those who earn wages in the 1st and 2nd deciles at the largest firms. The MEPS 

data show both a strong effect of establishment size given the wage level and a strong effect of 

the wage level given the establishment size. 

 Figure 5 plots the percentage of workers offered paid vacation, health insurance, and 

retirement plans by establishment size. All three benefits are more likely to be offered at larger 

establishments. The probability of receiving each of the three benefits increases with 

establishment size, though the gradient is somewhat lower for paid vacation than for the other 

two benefits. This finding suggests that insurance market issues may not be the driving force 

behind low health insurance offer rates at small firms. 

 Figures 6 through 9 suggest that the gap in health insurance offer rates between workers 

at smaller and larger firms appears to be driven by some factor in common across benefits. This 

pattern can be seen in both the distribution of health insurance offer rates conditional upon being 

 

and self-employment criteria imposed above. In the regression analyses in the next section, the associated full-time 

worker population is 73 million workers. 
17

offered a retirement plan or a paid vacation and in the joint distributions between being offered 

health insurance and being offered only one of the other benefits. 

In Figure 6 we display, by establishment size, the fraction of workers who are offered 

health insurance conditional on being offered retirement benefits. We also plot again the 

unconditional health insurance offer rate for comparison. There is only a small firm-size gradient 

for health insurance among workers who are offered retirement benefits. If problems specifically 

related to insurance were driving the health insurance offer gap for small firms, we would expect 

to see a size effect whether or not retirement benefits were offered. These graphs indicate, 

however, that virtually all of the firm-size effect occurs among workers who are not offered 

retirement benefits. 

In Figure 7, we display the corresponding relationships for health insurance and paid 

vacation benefits. While there continues to be some firm-size gradient for health insurance when 

we condition upon being offered paid vacation, the increase with establishment size in the 

conditional offer rate is less than for the unconditional health insurance offer rate. We suggest 

that it is possible that health insurance offer rates increase with firm size whether or not workers 

are offered paid vacation and that this increase could be due to higher administrative costs for 

health insurance (relative to the administrative costs for paid vacation) that are lower per worker 

as establishment size increases. We test this more formally below. 

 The next two figures plot the joint distributions of health insurance and retirement 

(Figure 8) and of health insurance and paid vacation (Figure 9). Both figures indicate that to a 

large extent provision of health insurance moves in tandem with retirement and with paid 

vacation. The most striking aspect of these graphs is that the main movement across the size 

distribution is from the provision of neither benefit at small establishments to the provision of 
18

both at larger establishments. There is a small upward trend at the smallest establishments in the 

probability of offering health insurance without the other benefit but that movement is dwarfed 

by the increased proportion of workers offered both benefits as establishment size increases. 

These patterns support the proposition that health insurance is not alone in its relationship with 

establishment size and suggests that, as we look for reasons for the disparities in offer rates by 

firm size, we should seek a common explanation for firm-size differences. 

2. Why Small Firms Are Less Likely to Offer Health Insurance 

 Our main results, reported in Table 2, correspond to the empirical model described in 

equation (1). The table reports estimates from three linear probability models for a worker 

offered health insurance, a retirement plan, and paid vacation. In addition to a control for 

whether the establishment has 10 or fewer workers, we include a set of controls indicating the 

worker’s wage decile (1st, 2nd, 3rd, 4th, or 5th, compared with the omitted category of above the 

median wage). Additionally, we include a polynomial in household income and controls for a 

wide array of worker characteristics, industry, the local unemployment rate, and a set of 

geographic region and year dummy variables. 

 The results indicate, first, that not all of the gap in the offering rates of health insurance 

between workers in smaller and larger establishments can be attributed to differences in the 

wages or incomes of workers at these two types of firms. Support for this conclusion comes from 

the fact that, after controlling for wages and income, workers at establishments with 10 or fewer 

workers are still 21 percentage points less likely than those at larger establishments to be offered 

health insurance. Moreover, comparing the relative magnitudes of the effect of being in a small 

firm between the baseline specification in Table 2 and the specification reported in the second 
19

column of Table 2, which is identical to the baseline except for the exclusion of the wage and 

household income measures, we find that while the size effects are smaller in the specification 

with wage decile controls, a significant and substantial size effect remains. Specifically, we find 

that the estimates differ by only .026, a roughly 10% difference. 

 In addition to the significant firm-size effect, we also see substantial effects of the 

worker’s wage level itself on the probability of being offered employer insurance. Workers in the 

1st wage decile are 40 points less likely to be offered insurance than workers with a wage above 

the median; workers in the 2nd decile, 30 points less likely; and workers in the 3rd decile, 20 

points less likely. Although wage levels explain only a small portion of the firm-size effect, the 

very strong independent association between wage levels and health insurance is clearly a central 

aspect of the compensation context in which access to employer health insurance must be 

understood. 

 In summary, the results on the effects of compensation indicate, first, that not all of the 

gap in the offering rates of health insurance between workers in smaller and larger 

establishments can be attributed to differences in the wages or incomes of these two types of 

workers. Thus, the difference in the offering rates of health insurance by employer size is not 

merely a total compensation income issue. Nonetheless, wage and income effects themselves are 

quite large and highlight the extent to which low-wage workers at firms of all sizes lack access to 

employer health insurance. It is possible, however, that even controlling for total compensation, 

workers in smaller firms differ from those in larger firms in their preference for receiving 

compensation in the form of benefits. 

 The demographic and other control variables have the expected signs in each of the 

benefits regressions. Age and education increase the probability of being offered each benefit, as 
20

does job tenure. A higher local unemployment rate is associated with a lower probability of 

being offered each benefit. Race and marital status are insignificant, but offer rates for each 

benefit are approximately 2 points higher for women. Being a union employee increases the 

probability of having both health insurance and retirement but, surprisingly, has a small negative 

effect on the probability of receiving paid vacation. 

 The difference in the rate at which workers are offered a retirement plan remains lower 

for workers at small establishments relative to workers at larger establishments after we control 

for wages, incomes, worker demographics, industry, and year. We find that workers at 

establishments with 10 or fewer workers are 21 percentage points less likely than their 

counterparts at larger establishments to be offered a retirement plan—almost exactly the same 

difference as for health insurance. 

 Because the differences in the rates of offering by establishment size are at least as large 

for retirement plans as for health insurance, it seems unlikely that issues specific to health 

insurance markets (e.g., small pooling, adverse selection) can explain why workers in smaller 

establishments are less likely to be offered health insurance. To reach this conclusion, we 

compare the coefficient on establishment size in the health insurance equation to that in the 

retirement benefit equation, and find that the coefficients on establishment size are almost 

identical for the two benefits.11 Using different definitions of establishment size, we find slightly 

larger firm-size gaps for retirement benefits than for health insurance. In no case do we find a 

larger effect for health insurance as compared to retirement, which is what we would expect to 

find if insurance issues were the critical reason for the health insurance gap between large and 

small firms. 

 

11 In hypothesis tests, we find no significant difference between these coefficients in the baseline regression. 
21

 The difference in the rate at which workers are offered paid vacations is also lower for 

workers at small establishments, controlling for compensation, income, and other factors. 

Workers at establishments with 10 or fewer workers are more than 12 percentage points less 

likely than workers at larger establishments to be offered paid vacation. We argue that since the 

difference in offering rates for this benefit, which has relatively low fixed administrative costs, is 

much smaller (though still positive) than for either health insurance or for retirement plans, the 

fixed administrative costs of setting up and running either a health insurance or retirement plan 

likely are a primary reason why workers at smaller establishments are less likely to be offered 

these benefits. These differences in the effect of establishment size on the paid vacation versus 

retirement or health insurance equations are substantial and significant in all specifications, 

including the sensitivity checks described below. 

 We also performed several robustness checks. First, we evaluated the sensitivity of our 

results with respect to how we define a small firm. The model specification in Table 3 is 

equivalent to the baseline specification with the addition of an interaction term for whether the 

worker is at a small establishment and whether the firm has more than one location This 

modeling choice effectively creates three categories of firm size: firms with 10 or fewer 

employees, those with fewer than 10 employees and multiple locations, and those with more than 

10 employees. Here it is possible to see a large distinction between the availability of health 

insurance offers between single- and multiple-location small firms. Specifically, we find that a 

worker in a multiple-location, small establishment is 7 points less likely to have an offer of 

health insurance relative to a worker in a large establishment, and a worker in a single-location, 

small establishment is 34 percentage points less likely to have an offer of health insurance. In 
22

addition to observing large gaps in health insurance offers, we find similar size effects for 

retirement plans, and smaller differences with respect to the paid vacation benefit. 

 As a second check, we reestimated our baseline specification using two alternative 

definitions of small establishment: whether an establishment has 25 or fewer employees, or 50 or 

fewer employees (see Table 4). For example, we find that when comparing workers in 

establishments with 50 or fewer employees to those in larger establishments, these workers are 

still almost 13 percentage points less likely to have an offer of health insurance, 18 points less 

likely to have a retirement plan, and 8 points less likely to have a paid vacation benefit.12 In these 

specifications, we find a larger size gap for retirement than for health insurance, reinforcing the 

conclusion that strictly insurance-related issues are not the primary driver of the small-firm 

health insurance gap since in no case do we find a larger gap for health insurance than retirement 

benefits. 

 Finally, we performed two checks of our method of controlling for compensation levels. 

Our primary concern was whether the coefficients on our wage decile dummies could be picking 

up not only demand-side compensation effects but also a compensating wage differential for the 

benefit. Although we used wage decile dummies rather than the wage variable itself to avoid this 

problem, it is possible that if there were a full compensating differential for health insurance then 

the provision of insurance would move a worker into a lower decile category. To test whether 

our results were robust to other ways of controlling for compensation we first included only a 

single binary indicator variable for whether a worker’s wage was below the median, rather than 

using a set of wage deciles. We find that the size of the small-firm effect is unchanged by this 

way of accounting for a worker’s wage. Our second strategy was to measure total compensation 
23

by taking into account both wages and the value of fringe benefits offered to a worker. 

Unfortunately, the MEPS does not contain detailed information about the latter, and so we 

imputed average values of health insurance, retirement plans, and paid vacations using data from 

the 1997-2003 National Compensation Survey, Employer Costs of Employee Compensation 

Summary (http://www.bls.gov/ncs/ect/home.htm, 2007). After constructing an estimate of each 

worker’s total compensation, we created a set of deciles and included the 1st, 2nd, 3rd, 4th, and 5th

(values above the median total compensation are the excluded category) in the model 

specification. Our results from these models indicate that the effect of being a worker in a small 

establishment is slightly smaller than that reported in the baseline specification; however, the 

qualitative pattern of results does not change. 

 We acknowledge a number of study limitations. First, we are unable to directly assess 

how the administrative costs associated with health plans compare with those associated with 

retirement plans. Unfortunately, there are no data sources in the public domain that provide such 

information, but we do have some support for the idea that these costs are roughly similar based 

on anecdotal evidence from human resources managers. Second, we do not have any 

comprehensive information about the value of the benefits, and it is possible that patterns in the 

value of offered benefits by firm size may differ from those of the probability of being offered a 

particular benefit. Finally, it is possible that other characteristics of the workplace—such as coworker characteristics and the age of the firm—may affect employees’ access to health insurance 

as well as the other benefits (Carrington et al., 2002). 

 12 We estimated other specification checks which incorporate both the alternative small firm definitions and the 

interaction term. In all cases our results are robust to these specification changes. These results are available upon 
24

POLICY IMPLICATIONS AND CONCLUDING REMARKS

 Policies for increasing access to health insurance for workers at small firms will be more 

successful if they are based on a more complete understanding of how health insurance fits into 

the broader context of compensation at small firms. We cite three potential reasons to explain the 

firm-size gap in health insurance offerings: lack of demand due to relatively low compensation 

or lack of affordability, insurance market failures, and administrative costs. By using 

comparisons among the offering rates for health insurance, retirement plans, and paid vacations, 

our results suggest, indirectly, that the fixed administrative costs of setting up and running a 

health insurance plan may be an important reason why workers at smaller establishments are less 

likely to be offered this benefit, while insurance market failures and compensation likely play a 

smaller role in explaining the small-firm offer gap. The compensation level itself does, however, 

have a very strong independent effect on offer rates and should also be carefully considered in 

policy debates. 

 Public policies seeking to improve access to health insurance for workers and their 

families either have focused on a single failure (e.g., pooling risk) or have been comprehensive 

(e.g., single payer). An incremental reform strategy focusing on a single factor has the potential 

to be effective, but only if it targets the factor that is driving the gap. Our findings suggest that 

reforms focusing on insurance market failures, such as small-group reforms aimed at pooling 

risk, are not likely to be effective with respect to increasing health insurance offer rates at small 

firms. 

 Our results suggest that administrative costs are a potentially significant factor driving the 

gap. What then does this suggest in terms of policy? Association Health Plans (AHPs) or Small 

Business Health Plans have been proposed for small firms in order to both improve risk pooling 

 

request. 
25

and reduce administrative costs but it is not yet clear whether they do, in fact, reduce 

administrative costs. It is possible that this policy might lead to higher administrative costs if 

there are coordination issues both within the firm and between the firm and the association. In 

fact, the Congressional Budget Office (2000) has concluded that AHPs would do little to reduce 

administrative costs and improve health insurance access. Moreover, the recent experience of 

California's health insurance purchasing pool, PacAdvantage, which closed at the end of 2006 

due to the withdrawal of insurers, also suggests that these groups may face other serious 

obstacles and no compelling cost advantage, depending on how they are structured and the 

environment in which they operate. 

 Another strategy that might reduce administrative costs is the proposal to allow small 

firms to buy in to the Federal Employee Health Benefits Plan (FEHBP). While reducing 

administrative costs may not be the driving force behind this proposal, it is possible that 

administrative cost reductions could result; however, again, there is no evidence yet that this is 

the case (and it might increase the administrative costs of the FEHBP). Such a plan may also face 

other hurdles, such as adverse selection, that could offset possible savings in terms of lower 

administrative costs. Whether or not administrative costs would be reduced almost certainly 

depends on the particulars of the structure of such a plan. Our results suggest that lowering 

administrative costs should be considered as a way to increase the rate at which smaller firms 

offer health insurance. However, because it is unclear which, if any, policies might be effective 

at reducing the administrative costs faced by smaller firms in the provision of health and other 

benefits, more research is needed to determine how best to reduce these costs. Proposals such as 

the FEHBP buy-in should be specifically evaluated in terms of the extent to which they would 
26

reduce the administrative costs faced by small firms in offering health insurance plans to their 

employees. 

 Of course, a portion of the higher per-worker administrative costs borne by small firms is 

not reflected in their premiums but rather is the result of increased human resource department 

functions as, for example, the firm shops for the benefit, coordinates the benefit with employees, 

and integrates the benefit with the payroll. These costs might represent a firm’s hiring of a 

human resource specialist or an entrepreneur’s time. It is unclear what, if any, policies might 

reduce the higher per-worker administrative costs for small firms as at least a portion of these 

costs are an inherent feature of being a small firm. 

Also, while our results do not indicate that relatively low levels of compensation for 

workers at small firms explain the difference in offerings between small and large firms, we do 

find that low wage levels are associated with a much lower likelihood of being offered health 

insurance. If the wage effects are due to lower demand by low-wage employees, we can use 

these estimates to assess how large an increase in compensation would be required to 

substantially increase that demand. We find that wage increases would have to very large to 

prompt a significant response. Consider a typical small-firm worker with wages in the first decile 

and a predicted probability of a health insurance offer of 0.20. To increase that probability by 

approximately 30 points to 50%, our estimates imply that the worker would need to move from 

the 1st to the 4th decile of the wage distribution, with a corresponding wage increase of about 

60%.13 To the extent that tax subsidies or credits in the employer-based system mimic this 

increase in compensation, these subsidies would have to be very large relative to workers’ wage 

rates to have a substantial effect, a finding in keeping with previous studies of insurance take-up. 

 

13 The wage decile threshold for the first wage decile is $6.75, and for the 4th decile is $11.00. 
27

This makes these policies unlikely to be an efficient way in which to expand coverage access, 

despite the strong connection between wage levels and offer rates. 
28

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31

Table 1.

Descriptive Statistics

Variable Mean Linearized SE Mean Linearized SE

Offer health insurance 0.768 0.003 0.807 0.004

Retirement plan 0.592 0.005 0.616 0.005

Paid vacation 0.764 0.003 0.813 0.004

Establishment size ≤ 10 0.196 0.003 0.188 0.003

Establishment size ≤ 25 0.341 0.004 0.336 0.005

Establishment size ≤ 50 0.474 0.004 0.467 0.005

Firm has more than 1 location 0.674 0.004 0.691 0.005

Hourly wage rate ($) 17.06 0.138 17.55 0.146

Age (years) 39.02 0.094 39.06 0.109

Education (years) 13.28 0.031 13.14 0.031

White 0.824 0.006 0.835 0.006

Black 0.124 0.006 0.113 0.006

Other race 0.052 0.005 0.052 0.005

Female 0.486 0.002 0.423 0.003

Married 0.571 0.005 0.575 0.006

Household income ($1000s) 62.516 0.555 63.088 0.609

Northeast 0.188 0.012 0.179 0.012

Midwest 0.237 0.014 0.24 0.014

South 0.353 0.019 0.358 0.019

West 0.222 0.019 0.223 0.02

Union employee 0.143 0.004 0.141 0.004

Job tenure (years) 7.068 0.083 7.425 0.094

Agriculture 0.004 0.0005 0.004 0.0005

Mining 0.005 0.001 0.006 0.001

Construction 0.073 0.002 0.073 0.002

Manufacturing 0.201 0.005 0.211 0.005

Transportation and communications 0.092 0.002 0.093 0.002

Sales 0.201 0.003 0.197 0.004

Finance and insurance 0.081 0.003 0.085 0.003

Repair services 0.06 0.002 0.057 0.002

Personal services 0.035 0.002 0.033 0.002

Entertainment and recreation 0.038 0.002 0.035 0.002

Professional services 0.13 0.003 0.126 0.004

Unknown industry 0.002 0.0004 0.0008 0.0002

County-level unemployment rate 4.948 0.071 4.939 0.072

Source: Authors' calculations from the MEPS-HC, 1997 - 2003.

All workers Full-time workers
Table 2.The Relationship Between Establishment Size and Benefit Offering: Baseline Models

Parameter 

Estimate

Standard 

Error

Parameter 

Estimate

Standard 

Error

Parameter 

Estimate

Standard 

Error

Para

Esti

Establishment size ≤10 -0.2361*** 0.0083 -0.2101*** 0.0081 -0.2081*** 0.0095 -0.12

1st Wage decile -- -- -0.3988*** 0.0168 -0.3496*** 0.0151 -0.39

2nd Wage decile -- -- -0.3046*** 0.0151 -0.3050*** 0.0152 -0.25

3rd Wage decile -- -- -0.1992*** 0.0132 -0.2424*** 0.0150 -0.17

4th Wage decile -- -- -0.0859*** 0.0117 -0.1967*** 0.0121 -0.07

5th Wage decile -- -- -0.0411*** 0.0101 -0.1016*** 0.0132 -0.02R2

Source: Authors' calculations from the MEPS-IC.Note: Models also controlled for age, age squared, years of education, years of education squared, household income, hourace, sex, marital status, union status, job tenure, job tenure squared, county unemployment rate, and sets of industry, regivariables. *** p<.01, ** p<.05, * p<.10

0.3206 0.3534 

Offer of Health Insurance

0.257

Offer of Health Insurance Retirement Plan
Table 3.The Relationship Between Establishment Size and Benefit Offering: Controlling for Firms' Having More than 1 

Parameter 

Estimate

Standard Error Parameter 

Estimate

Standard Error Parameter 

Estimate

Establishment size ≤ 10 -0.3448*** 0.0130 -0.3237*** 0.0107 -0.1962*** 

Estab. size ≤ 10 * > 1 location 0.2766*** 0.0157 0.2374*** 0.0147  0.1513*** 

1st Wage decile -0.3842*** 0.0169 -0.3371*** 0.0148 -0.3866*** 

2nd Wage decile -0.3029*** 0.0146 -0.3036*** 0.0148 -0.2523*** 

3rd Wage decile -0.1937*** 0.0134 -0.2377*** 0.0151 -0.1724*** 

4th Wage decile -0.0824*** 0.0113 -0.1937*** 0.0119 -0.0733*** 

5th Wage decile -0.0365*** 0.0098 -0.0977*** 0.0132 -0.0183* R2

Source: Authors' calculations from the MEPS-IC.

Offer of Health Insurance Retirement Plan Paid 

Note: Models also controlled for age, age squared, years of education, years of education squared, household incincome squared, race, sex, marital status, union status, job tenure, job tenure squared, county unemployment rateindustry, region, and year indicator variables. *** p<.01, ** p<.05, * p<.10

0.3429 0.3642 0
Table 4.The Relationship Between Establishment Size and Benefit Offering: Alternative Definitions of "Small Establish

Parameter 

Estimate

Standard Error Parameter 

Estimate

Standard Error Parameter 

Estimate

Establishment size ≤25 -0.1608*** 0.0065 -0.1948*** 0.0083 -0.0869*** 

Establishment size ≤50 -0.1274*** 0.0059 -0.1759*** 0.0076 -0.0816*** 

Source: Authors' calculations from the MEPS-IC.

Offer of Health Insurance Retirement Plan Paid 

Note: Models also controlled for indicators for wage decile, age, age squared, years of education, years of educahousehold income, household income squared, race, sex, marital status, union status, job tenure, job tenure squaunemployment rate, and sets of industry, region, and year indicator variables. *** p<.01, ** p<.05, * p<.10
35

Figure 1. 

Relationship Between Establishment Size and Health Insurance Offering 

0

10

20

30

40

50

60

70

80

90

100

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered
36

Figure 2. 

Relationship Between Deciles of Workers’ Wages and Health Insurance Offering

0

10

20

30

40

50

60

70

80

90

100

1st decile 2nd decile 3rd decile 4th decile 5th decile above median

Position in Wage Distribution

Percent Offered
37

Figure 3. 

Relationship Between Deciles of Workers’ Wages and Firm Size 

0

10

20

30

40

50

60

1st decile 2nd decile 3rd decile 4th decile 5th decile above median

Position in Wage Distribution

Percent

2-10

11-25

26-50

51-100

> 100
38

Figure 4. 

Relationship Between Establishment Size and Health Insurance Offering by Wage Level 

0

10

20

30

40

50

60

70

80

90

100

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered

1st wage decile

2nd decile

3rd decile

4th decile

5th decile

Above median wage
39

Figure 5. 

Relationship Between Establishment Size and Paid Vacation, Health Insurance, and 

Retirement or Pension Benefits and 

0

10

20

30

40

50

60

70

80

90

100

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered

Retirement Plan

Health Insurance

Paid Vacation
40

Figure 6.

Offer of Health Insurance, Conditional on Retirement Plan by Establishment Size 

0

20

40

60

80

100

120

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered

Offered Health Insurance Conditional on Being Offered Retirement Plan

Offered Health Insurance Conditional on Not Being Offered Retirement 

Plan

Offered Health Insurance
41

Figure 7. 

Offer of Health Insurance, Conditional on Paid Vacation by Establishment Size 

0

20

40

60

80

100

120

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered

Offered Health Insurance Conditional on Being Offered Paid Vacation

Offered Health Insurance Conditional on Not Being Offered Paid 

Vacation

Offered Health Insurance
42

Figure 8.

Joint Distribution of Health Insurance and Retirement 

0

10

20

30

40

50

60

70

80

90

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered

Offered Neither Benefit

Offered Both Benefits

Offered Health Insurance Only

Offered Retirement Plan Only
43

Figure 9.

Joint Distribution of Health Insurance and Paid Vacation 

0

10

20

30

40

50

60

70

80

90

100

2-10 11-25 26-50 51-100 > 100

Establishment Size (number of workers)

Percentage of Workers Offered

Offered Neither Benefit

Offered Both Benefits

Offered Health Insurance Only Offered Paid Vacation Only