Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable. Currently, both Jim and Stephanie are insured through their own employers. Jim’s employer pays 42% of his $378 monthly premium. His insurance plan will also pay for 23% of the $345 premium for additional beneficiaries. Stephanie’s employer pays 35% of her $298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan. Her employer would then pay 30% of the $349 premium for each additional beneficiary.

Question

Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable.  Currently, both Jim and Stephanie are insured through their own employers.  Jim’s employer pays 42% of his $378 monthly premium.  His insurance plan will also pay for 23% of the $345 premium for additional beneficiaries.  Stephanie’s employer pays 35% of her $298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan.  Her employer would then pay 30% of the $349 premium for each additional beneficiary.

Insurance
 	
Jim's Employer
 
Beneficiary
Monthly Premium
Employer Contribution
Jim
$378
42%
Additional (each)
$345
23%
 	 	 
Stephanie's Employer
Beneficiary
Monthly Premium
Employer Contribution
Stephanie
$298
35% (+10% for each additional beneficiary)
Additional (each)
$349
30%

Which would be the most economical way for the couple to purchase health insurance?
a.
They should both add each other to their plans.
b.
Stephanie should add Jim to her health care plan.
c.
Jim should add Stephanie to his health care plan.
d.
They should each purchase a plan from their own employer.

GPT-4o mini · Answer

To determine the most economical way for Jim and Stephanie to purchase health insurance, we need to calculate the combined costs for each option.

Option A: Both add each other to their plans.

Jim's Plan
- Jim's premium: $378
- Employer contribution: 42% of $378 = 0.42 * 378 = $158.76
- Jim pays: $378 - $158.76 = $219.24
- Additional beneficiary premium: $345
- Employer contribution: 23% of $345 = 0.23 * 345 = $79.35
- Jim pays: $345 - $79.35 = $265.65
- Total cost for Jim if Stephanie is added: $219.24 + $265.65 = $484.89
Stephanie's Plan
- Stephanie's premium: $298
- Employer contribution: 35% of $298 = 0.35 * 298 = $104.30
- Stephanie pays: $298 - $104.30 = $193.70
- Additional beneficiary premium: $349
- Employer contribution: 30% of $349 = 0.30 * 349 = $104.70
- Stephanie pays: $349 - $104.70 = $244.30
- Total cost for Stephanie if Jim is added: $193.70 + $244.30 = $438.00
Total combined cost if they both add each other to their plans: $484.89 (Jim) + $438.00 (Stephanie) = $922.89.

Option B: Stephanie adds Jim to her health plan.

Stephanie's total without adding Jim: $298 - $104.30 = $193.70
Jim's contribution if added: $349 (this will be an additional beneficiary).
- Stephanie's employer pays: 30% of $349 = $104.70
- Stephanie pays: $349 - $104.70 = $244.30
Total cost if Stephanie adds Jim: $193.70 + $244.30 = $438.00.

Option C: Jim adds Stephanie to his health plan.

Jim's total without adding Stephanie: $378 - $158.76 = $219.24
Stephanie's contribution if added: $345 (this will be an additional beneficiary).
- Jim's employer pays: 23% of $345 = $79.35
- Jim pays: $345 - $79.35 = $265.65
Total cost if Jim adds Stephanie: $219.24 + $265.65 = $484.89.

Option D: They each purchase a plan from their own employer.

Jim's cost: $219.24
Stephanie's cost: $193.70
Total combined cost: $219.24 + $193.70 = $412.94.

Comparison of Costs:

Option A: $922.89
Option B: $438.00
Option C: $484.89
Option D: $412.94

The most economical way for Jim and Stephanie to purchase health insurance is Option D: They should each purchase a plan from their own employer with a total cost of $412.94.