Lang, Kevin. <br/><br/>
Worker Sorting, Taxes and Health Insurance Coverage / 
Kevin Lang, Hong Kang. 
 - Cambridge, Mass.  National Bureau of Economic Research  2007. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w13066 .
 - Working Paper Series (National Bureau of Economic Research)  no. w13066. .
<br/><br/> April 2007. 
<br/><br/> We develop a model in which firms hire heterogeneous workers but must offer all workers insurance benefits under similar terms. In equilibrium, some firms offer free health insurance, some require an employee premium payment and some do not offer insurance. Making the employee contribution pre-tax lowers the cost to workers of a given employee premium and encourages more firms to charge. This increases the offer rate, lowers the take-up rate, increases (decreases) coverage among high (low) demand groups, with an indeterminate overall effect. We test the model using the expansion of section 125 plans between 1987 and 1996. The results are generally supportive. 
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