Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the company's health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.
Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the company's health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 39P
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Transcribed Image Text:Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that
contains information on the company's health insurance options. Aerosystems offers its employees the choice between a private
insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on
which health care program fits his needs. The following is an overview of that information.
a) The monthly premium cost to Ronald for the Blue Cross/Blue Shield plan will be $44.35. For all doctor office visits, prescriptions, and
major medical charges, Ronald will be responsible for 25 percent, and the insurance company will cover 75 percent of covered
charges. The annual deductible is $540.
b) The HMO is provided to employees free of charge. The copayment for doctors' office visits and major medical charges is $15.
Prescription copayments are $5. The HMO pays 100 percent after Ronald's copayment. There is no annual deductible.
c) The POS requires that the employee pay $26.51 per month to supplement the cost of the program with the company's payment. If
Ron uses health care providers within the plan, he pays the copayments as described above for the HMO with no annual
deductible. He can also choose to use a healthcare provider out of the network and pay 25 percent of all charges after he pays a
$540 deductible. The POS will pay for 75 percent of those covered visits.
Ronald decided to review his medical bills from the previous year to see what costs he had incurred and to help him evaluate his
choices. He visited his general physician six times during the year at a cost of $90 for each visit. He also spent $67 and $91 on two
prescriptions during the year.
What total costs will Ronald pay if he enrolls in the HMO plan?
Personal annual cost
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