A company provides medical insurance that pays 50% of the costs with a 180.00 deductible...
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A company provides medical insurance that pays 50% of the costs with a $180.00 deductible (the employee pays the first $180, after which insurance pays 50%). How much will an employee pay in total if their medical bill is $1400.00?
Show answer & explanation
The employee first pays the $180 deductible. The remaining bill is $1400 - $180 = $1220. Since insurance pays 50% of the remaining amount, the employee pays the other 50%: $1220 × 0.50 = $610. Total employee cost: $180 + $610 = $790.
Step-by-step Derivation:
Step 1: Identify the deductible amount the employee must pay upfront: $180.00
Step 2: Calculate the remaining medical bill after deductible: $1400.00 - $180.00 = $1220.00
Step 3: Determine employee's share of remaining bill (50% co-insurance): $1220.00 × 0.50 = $610.00
Step 4: Calculate total employee payment: Deductible + Co-insurance = $180.00 + $610.00 = $790.00