Excerpt: This paper examines employee compensation decisions during a three-year period when health insurance premiums were rising rapidly. The data come from a single large firm with a flexible benefits plan wherein employees explicitly choose how to allocate compensation between cash wages and other benefits. .... You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery [at http://hq.ssrn.com/Pub_Login.cfm?type=detquan; registration required.]