How Do Households

household demand for employer-based health insurance to investigate the set of plan and household characteristics that influence coverage choices. Overall, we find that households are sensitive to price with respect to their coverage decisions, and that price sensitivity varies by marital status, wealth, and the number of offers of employer coverage available to the household. We also find that lower-income households are less likely to select an option that provides coverage for all household members. Using our model estimates, we simulate the effect of employers offering various levels of ‘‘opt-out’ ’ payments on changes in workers ’ probabilities of not taking up coverage and on expected costs. One of the key institutional features of the employer-based health insurance system is that nearly all employers offering coverage as a fringe benefit offer family coverage. In 2003, approxi-mately 64 % of nonelderly Americans received their health insurance through an employer, ei