Question

The health care Jimmy’s employer offers is a fee-for-service plan in which Jimmy and his family must pay for $12,500 in health related services in a calendar year before the insurance company begins to pay.  Jimmy and his family have several health related issues that demand $685.00 each month.  If one of Jimmy’s children were to become seriously injured at the end of the year, how much more would Jimmy and his family need to pay before the insurance company begins  to assume responsibility?
a.
$984.58
b.
$4,280.00
c.
$11,815.00
d.
$14,417.92

Answer 1

The answer is Letter B - $4,280.00.

Total the amount they could incur because of health issues in a year then deduct it from 12,500.

   = 685 x 12 months
   = 8,220; they incur $8,220 for their health related issues in a year

   = 12,500 - 8,220
   = 4,280; amount they need to pay before the insurance company assumes responsibility.