an employee extended health plan provides extended health services to the 750 employees of the company....

an employee extended health plan provides extended health services to the 750 employees of the company. The premiums are 60% paid by the employer and 40 % by the employee. Employee use an average of $475 worth of service per employee. The insurance company requires a 25% copayment and the insurance company imposes a 55% loading factor on the insured portion. please determine the copayment, dollar amount of the loading factor, insurance premium and the amount of premium by the employer, annual paid by employee and the total cost of the plan

Expert Solution

Number of employee = 750

Employee uses an avergae of $475 worth of service per employee

Total portion of employees= $475*750= $356250

Copayment= 25% of employee portion = 25%* $356250 = $89,062.5

Copayment per employee= $89,062.5/750= $118.75 per employee

Dollar amount of Loading factor= 55% of employee portion= 55%*$89,062.5 = $489,843.75

Loading factor per employee= $489,843.75/750= $653.125 per employee

Insurance premium= 40% of total premium=Total portion of employees= $475*750= $356250

Insurance premium= $356250/40% = $890,625

Amount of premium by employer= 60% of total premium=60/100*890625 = $534,375

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