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Health Insurance Premiums

SECTION. 11-1. Health Insurance Premiums. pp. 372-374. Compute: health insurance premiums. Section Objective. Key Words to Know. health insurance (p. 372) Protection against the costs of medical expenses. preferred provider organization (PPO) (p. 372)

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Health Insurance Premiums

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  1. SECTION 11-1 Health Insurance Premiums pp. 372-374

  2. Compute: • health insurance premiums Section Objective

  3. Key Words to Know health insurance (p. 372) Protection against the costs of medical expenses. preferred provider organization (PPO) (p. 372) A group of selected health care providers who offer comprehensive services at preset reimbursement levels.

  4. Key Words to Know health maintenance organization (HMO) (p. 372) A group program that provides health care at its own center with its own doctors for a fixed fee per month.

  5. Formula 1 Employee’s Percent = 100% × Employer’s Percent

  6. Formula 2 Employee’s Contribution = Total Premium × Employee’s Percent

  7. Insuring Your Life p. 372 What’s the purpose of an insurance premium?

  8. Example 1 Sean Derricotte has a family membership in a group medical insurance program. The annual premium is $6,180. Derricotte’s employer pays 80 percent of the total cost. His contribution is deducted monthly from his paycheck. What is Derricotte’s annual contribution? What is his monthly deduction?

  9. Example 1 Answer: Step 1 Find the employee’s percent. 100% – 80% = 20%

  10. Example 1 Answer: Step 2 Find the employee’s annual contribution. Total Premium × Employee’s Percent $6,180.00 × 20% = $1,236.00

  11. Example 1 Answer: Step 3 Find the employee’s monthly deduction. Employee’s Contribution ÷ 12 $1,236.00 ÷ 12 = $103.00

  12. Practice 1 Paul Esnerado has a family PPO group medical insurance plan. The total cost is $13,900. His employer pays 85 percent of the total cost. He also has the optional annual dental, which costs $950, and the optional vision care, which costs $315.

  13. Practice 1 (cont.) His employer pays 50 percent of dental and vision costs. How much is deducted each week from his paycheck for medical, dental, and vision insurance combined?

  14. Practice 1 Answer $52.26

  15. Practice 2 Tim Landau is a self-employed custom furniture maker. He pays 100 percent of his family HMO annual premium of $10,200. He also has a dental plan that costs $700, and an annual vision plan that costs $260. The premiums are paid quarterly. How much does he pay quarterly for insurance?

  16. Practice 2 Answer $2,790

  17. END OF SECTION 11-1 Health Insurance Premiums

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