Benefits Your company provides traditional benefits program. The specifics are as follows: a. Health insurance: the organization
Question:
Benefits Your company provides traditional benefits program. The specifics are as follows: a. Health insurance: the organization contributes $300 per employee per month, which covers the cost for the employee; the employee pays an additional $50 per month per covered dependent. b. Dental insurance: the organization contributes $50 per month, which covers the cost for the employee; the employee pays an additional $10 per month per covered dependent. c. Life insurance: the organization contributes $20 per month for $40,000 in term life insurance; the employee can buy additional units of coverage as a function of annual salary. d. Retirement: $150 per month. e. Gym membership: $50 per month. f. Vacation: everyone gets two weeks per year. g. Holidays: everyone get ten paid holidays per year. h. Sick time: everyone gets ten sick days per year.
a) What is the annual cost of each benefit (a-e) above and the total benefit cost (a-e) per year?
b) The company need to reduce its benefits costs and wants to adopt a flexible benefits plan. It plans to provide benefits to each employee of up to $5500 per year. If an employee needs additional benefits, the employee will be required to pay the additional amount. One of the employees (a single parent with one dependent), selected health insurance, dental insurance, life insurance, and retirement benefits. If the employee is paid every two weeks, what is the employee’s co-pay, and how much will be deducted from the employee’s gross pay for each pay period?
Personal Finance An Integrated Planning Approach
ISBN: 978-0136063032
8th edition
Authors: Ralph R Frasca