Preference diversity and the breadth of employee health insurance options.
OBJECTIVE
To examine the effect of worker heterogeneity, firm size, and establishment size on the breadth of employer health insurance offerings.


METHODS
The data were drawn from the 1993 Robert Wood Johnson Foundation Employer Health Insurance Survey of 22,000 business establishments selected randomly from ten states.


METHODS
The analysis was cross-sectional, using ordered probit models to relate the breadth of plan offerings to firm characteristics.


RESULTS
Firms with more diverse workforces offered a more diverse set of health insurance options. Firm and establishment size independently influenced the breadth of plan offerings.


CONCLUSIONS
Employers are responsive to worker heterogeneity when determining the breadth of their health insurance offerings. However, diseconomies of scale in the purchase and administration of health insurance appear to limit the extent to which small employers can accommodate diverse worker preferences.
Moran
J R
JR
Syracuse University, NY 13244-1020, USA.
Chernew
M E
ME
Hirth
R A
RA
D003430:Cross-Sectional Studies; D003625:Data Collection; D003659:Decision Making, Organizational; D005582:Foundations; D006264:Health Benefit Plans, Employee / Q000706:statistics & numerical data*; D006302:Health Services Research; D006801:Humans; D019458:Insurance Coverage; D015273:Insurance Selection Bias; D015233:Models, Statistical; D014481:United States