1. SECTION
11-1
Health Insurance Premiums pp

2. 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.

3. 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.

4. Formula 1
Employee’s Percent = 100% - Employer’s Percent

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

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

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

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

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

10. 373:1-21