With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely tolack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison ofworkers with and without health insurance coverage for small, medium, and large companies. For the purposes ofthis study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees ofsmall companies, 75 employees of medium companies, and 100 employees of large companies.Health InsuranceSize of CompanyYesNoTotalSmall381250Medium611475Large9010100a. Conduct a test of independence to determine whether employee health insurance coverage is independent of thesize of the company. Use a = .05. Use Table 12.4.Compute the value of the X2test statistic (to 2 decimals).The p value is between .05 and .10What is your conclusion?Cannot reject the assumption that health insurance coverage and size of the company are independent Vb. The USA Today article indicated employees of small companies are more likely to lack health insurance coverage.Calculate the percentages of employees without health insurance based on company size (to the nearest wholenumber).Small%Medium%Large%Based on the percentages calculated above, what can you conclude?Small companies have a higher percentage of no coverage than large and medium companies V

a. Null hypothesis: The employee health insurance coverage is independent of the size of the company. Alternative hypothesis: The employee health insurance coverage is not independent of the size of the company.P-value: Using excel formula “=CHISQ.DIST.RT(5.46,2)”, the p-value is obtained as 0.0652. Answer: The p value is between 0.05 and 0.10. Conclusion: Since p-value is greater than 0.05, the null hypothesis is not rejected at 5% level. Thus, there is sufficient evidence to conclude that the employee health insurance coverage is independent of the size of the company. Answer: Cannot reject the assumption that health insurance coverage and size of the company are independent.b. Based on the percentages calculated above, small companies have a higher percentage of no coverage than large and medium companies.