With double-digit annual percentage increases in the cost of health insurance, more and more
workers are likely to lack health insurance coverage (USA Today, January 23, 2004).The
following sample data provide a comparison of workers with and without health insurance
coverage for small, medium, and large companies. For the purposes of this study, small
companies are companies that have fewer than 100 employees. Medium companies have 100 to
999 employees, and large companies have 1000 or more employees. Sample data are reported
for 50 employees of small companies, 75 employees of medium companies, and 100 employees
of large companies.
Health insurance
Size of company Yes No Total
Small 36 14 50
Medium 65 10 75
Large 88 12 100
Conduct a test of independence to determine whether employee health insurance coverage
is independent of the size of the company. Use α = 0.05.What is your conclusion?