Question

Rachel receives employer-provided health insurance. The employer's cost of the health insurance is $5,600 annually. What is her employer's after-tax cost of providing the health insurance, assuming that the employer's marginal tax rate is 21 percent and the employer is profitable?

Answer 1

Answer:

$4,424

Explanation:

Calculation for her employer's after-tax cost of providing the health insurance

Using this formula

After-tax cost =Annually employer's cost of health insurance -(=Annually employer's cost of health insurance*Marginal tax rate)

Let plug in the formula

After-tax cost =$5,600- ($5,600 × 21%)

After-tax cost =$5,600- $1,176

After-tax cost =$4,424

Therefore her employer's after-tax cost of providing the health insurance is $4,424