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Group Health Insurance pp. 126-1272-5SECTIONSECTION
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Section ObjectiveSection ObjectiveCalculate:
• deduction for group insurance
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group insurance (p. 126)
Insurance offered by many businesses to employees, paid in part by the business and in part by deductions from employees’ paychecks.
Key Words to KnowKey Words to Know
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Employee’s = Annual × Employee’s Share Amount Percent
Formula 1Formula 1
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Deductions per Pay Period =
Total Annual Amount Paid by Employees Number of Pay Periods per Year
Formula 2Formula 2
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Describe at least two scenarios when a young, healthy person would need health insurance.
Jack’s Jackpot p. 126Jack’s Jackpot p. 126
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Lawrence Butler has family medical coverage through the group medical plan his employer provides. The annual cost of the plan is $4,500. The company pays 80 percent.
How much does Butler pay annually?
Example 1Example 1
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Find the percent paid by employee.
100% – Percent Company Pays
100% – 80% = 20%
Example 1 Answer: Example 1 Answer: Step 1Step 1
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Find the total amount paid by employee.
Annual Amount × Employee’s Percent
$4,500 × 20% = $900.00
Example 1 Answer: Example 1 Answer: Step 2Step 2
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Nicholette McClure has family medical coverage through the group medical plan her employer provides. The annual cost of the plan is $5,000. The company pays 75 percent.
How much is deducted from her biweekly paycheck for medical insurance?
Example 2Example 2
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Find the percent paid by employee.
100% – Percent Company Pays
100% – 75% = 25%
Example 2 Answer: Example 2 Answer: Step 1Step 1
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Find the total amount paid by employee.
Annual Amount × Employee’s Percent
$5,000 × 25% = $1,250
Example 2 Answer: Example 2 Answer: Step 2Step 2
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Find the deduction per pay period.
Total Annual Amount Paid by Employee Number of Pay Periods per Year
$1,250 ÷ 26 = $48.08
Example 2 Answer: Example 2 Answer: Step 3Step 3
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Annual cost of insurance: $4,160.Employer pays 80 percent.52 pay periods.Find the deduction per pay period.
Practice 1Practice 1
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$16
Practice 1 AnswerPractice 1 Answer
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Ken Fujimoto’s employer pays 90 percent of his medical insurance and 60 percent of his dental insurance. Medical insurance costs $3,400 per year and dental insurance is $1,300.
How much is deducted from Ken’s semimonthly pay for medical insurance? How much for dental insurance?
Practice 2Practice 2
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Medical: $14.17
Dental: $21.67
Practice 2 AnswerPractice 2 Answer
Group Health Insurance2-5END OF SECTIONEND OF SECTION