Question: Assignment: Open Response 3 (50 Points) Answer each of the following. If you are typing, be sure to save this in Rich Text Format, .rtf.
Assignment: Open Response 3 (50 Points)
Answer each of the following. If you are typing, be sure to save this in Rich Text Format, .rtf.
- Health Insurance. (This section is worth a total of 25 points)
The company you work for offers a choice of three different policies. Here are the details.
Coinsurance is the percentage of bills you pay after the deductible.
Your employer will be paying 70% of the premium.
Insurance
Company
Deductible
Coinsurance
Office Visit
Annual Premium
AAA+
$2500
20%
$25
$1883
Health Today
$500
20%
$25
$2343.36
Best Insurance
$5000
20%
20% after deductible
$821.80
- Compare the Companies. Answer each of the following.
- Which company has the lowest deductible (money you must pay on bills before the insurance will pay)?
Health Today
- Which company has the best Office Visit quote?
Best Insurance
- Which company has the lowest annual premium?
Best Insurance
- Now, let's try "what if". What if you had medical bills for $10,000 for a minor surgery? What would each of the insurance policies pay if you had not yet paid any deductible? Remember that 20% is your part (coinsurance) so the insurer's percent is 80% for the first formula. Show how you are getting the answer.
It wouldn't be 80% of the remainder. It would be the entire remainder after the deductible.
Formulas:
Insurer's part of Medical Bill = (Bill - deductible) (80%)
Your part of medical bill = Total bill - Insurers part
- AAA+
Insurer's Part of bill =
Your part of bill =
- Health Today
Insurer's Part of bill =
Your part of bill =
- Best Insurance
Insurer's Part of bill =
Your part of bill =
- Now let's do another "what if". What if the normal cost of an office visit to your regular doctor is $80, without insurance? With AAA+ and Health Today you would pay only $25 for the office visit, as it is not part of the deductible. With Best Insurance, if you have not met the deductible yet, you would pay the whole cost of $80. You may have a lot of office visits before you pay the deductible on this insurance. Let's assume that you have met the deductible and see what the office visit would cost. You will pay 20% of it.
- AAA+
Office Visit = $25
- Health Today
Office Visit = $25
- Best Insurance
Office Visit = 20% of 80 =
- Now let's look at the annual premium. Let's find the annual premium that would be deducted from your paycheck. You are paying 30% of your premium.
- AAA+
Annual Deduction = 30% of premium =
Weekly Deduction = your annual/52 =
- Health Today
Annual Deduction =
Weekly Deduction =
- Best Insurance
Annual Deduction =
Weekly Deduction =
- Decision Time! Look at the costs and the benefits and decide on which company you would choose. There is no right or wrong choice, just personal preference.
- Name of Company:
- Reason you chose this one.
- Paycheck (This section is worth a total of 25 points)
- Federal Tax
You are single, your AGI is $60,000 as you get no extra income, and you have one exemption of $8200. Find your taxable income and your tax due from the table.
- Taxable income =
- Tax due =
- Fill in the table below. Use your answer from 1d to fill in the health insurance deduction.
Annual Amount
Weekly Amount
Gross Income
$60,000.00
Health Insurance Deduction
Federal income tax
FICA (7.65%)
State (3%)
- Find your net pay per week.
Net Pay = Gross Pay - Total Deductions
- Find your Take-Home percent of gross pay.
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