Patrick and Susie just welcomed a set of twins to their family and have to decide how to purchase health insurance for the babies. Patrick’s employer pays for 100% of his monthly health insurance premium of $378, but will not pay for any of the $280 for each additional beneficiary. Susie’s employer, who pays 63% of her $403 monthly premium, offers to pay 32% of the $310 monthly premium for each additional beneficiary. Which would be the most economical way to purchase health insurance for the family?Patrick's EmployerBeneficiaryMonthly PremiumEmployer ContributionPatrick$378 100%Additional (each)$280 0% Susie's EmployerBeneficiaryMonthly PremiumEmployer ContributionSusie$403 63%Additional (each)$310 32%
Answer
A
Insure the entire family (Patrick, Susie, and the twins) with Patrick’s employer.
B
Insure the entire family (Patrick, Susie, and the twins) with Susie’s employer.
C
Insure Patrick with his employer and Susie and the twins with her employer.
D
Insure Susie with her employer and Patrick and the twins with his insurer.
Explanation
With Patrick’s employer, Patrick’s premium costs the family $0, while each additional beneficiary costs $280. With Susie’s employer, Susie’s share is 37% of $403, or $149.11, and each additional beneficiary costs 68% of $310, or $210.80. Option C costs $149.11 + 2($210.80) = $570.71 per month, less than the other arrangements.
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