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Have you ever heard someone out of high school say they want to get a job that has “medical?”

Warm up Problem Jim is self-employed and he needs your help calculating his FICA deductions. His gross earnings were $30,000. What amount should he pay for Social Security and Medicare? (remember self-employment payroll taxes) (use 6.2 for SS).

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Have you ever heard someone out of high school say they want to get a job that has “medical?”

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  1. Warm up ProblemJim is self-employed and he needs your help calculating his FICA deductions. His gross earnings were $30,000. What amount should he pay for Social Security and Medicare? (remember self-employment payroll taxes) (use 6.2 for SS)

  2. Have you ever heard someone out of high school say they want to get a job that has “medical?” What does that mean? NOT THE SAME AS MEDICARE

  3. Question (not on notes) If you have medical insurance through your parents medical insurance group coverage, at what age are you dropped from the plan? You are covered through the last day of the month of your 26th birthday. ( unless you are employed with your own plan) New Health care reform bill: 2010

  4. What happens if you are dropped from your parents’ medical plan? You pay out of pocket for doctor and dentist visits You can get short term “major medical” insurance for about $150 each month, for up to three years.

  5. What if you lie to your insurance company about being a full time college student? How would they know? • Depending on the company, your parents may have to provide a copy of your schedule, or just sign a legal form. • Your parents would owe the cost of any medical care you had during that period. • Your parents could be prosecuted criminally for insurance fraud.

  6. Lesson Objective Calculate the deduction for group insurance. Content Vocabulary • Group health insurance (Medical benefits and/or Dental, Optical, etc.) group health insurance Health insurance offered by many businesses to employees, paid in part by the business and in part by the employee.

  7. Medical • This person is not offered medical or dental benefits and therefore has $0 deducted

  8. Why do you think an employer would be willing to pay for part of your health insurance?Can an employer dictate the way/choices you make in life?Smoking, exercising, etc.

  9. Employee’s Annual Cost = Business’ Annual Cost x Employee’s Percent Paid The amount owed by the employee is usually deducted each pay period. You just found the annual (yearly cost) for the employee. That must be divided into pay periods so it can be deducted from each paycheck equally. Deduction per Pay Period = Employee’s Annual Cost ÷ # of Pay Periods per Year Deductions for health care are often called PREMIUMS

  10. Lawrence has family medical coverage through his employer. The annual cost of his family membership is $9,800. The company pays 75% of the cost. How much does Lawrence have deducted from his biweekly paycheck? • Find the percent paid by the employee: 100% - 75% = 25% (company pays) (employee pays) • Find the employee’s annual cost: $9,800 x 25% = $2,450 (annual) • (annual amt) (employee’s %) • How much is deducted biweekly? $2,450 ÷ 26(biweekly)= $94.23

  11. Carole is a veterinary assistant. Her employer pays 50% of her medical insurance and 40% of her dental insurance. Medical insurance costs $6,900 per year and dental insurance costs $650. How much is her monthly medical premium? How much is her monthly dental premium? • 100% - 50% = 50% • medical insurance costs paid by Carole • $6,900 x 50% = $3,450 Amount Carole will pay for medical insurance this year. • Next slide

  12. How much is Carole’s monthly medical premium? • $3450 ÷ 12 = $287.50 Dental premiums: • 100% - 40% = 60% • paid by Carole for dental insurance this year • $650 x 60% = $390 • How much is her monthly dental premium? • $390 ÷ 12 = $32.50

  13. Closure • What is currently happening to the cost of health insurance? • How are employers going to stay competitive if costs keep rising? Complete problem 1 page 139

  14. Answer: 100 percent – 70 percent = 30 percent .30 x 6,570 = $1,971 $1,971 / 12 = $164.25 Homework: Section 2.5, pp. 140-141 Problems: 7,8,10, 12, challenge problem 13

  15. Section 2.5, pp. 140-141 (7, 8, 10) 7. $5,480 x .35 (% you pay) = $1,918 (yearly) $1,918 ÷ 12 = $159.83 (monthly) 8. $4,650.00 x .30 (% you pay) = $1,395 (yearly) $1,395 ÷ 52 = $26.83 (weekly, rounded) 10. $10,019.40 x .34 (% you pay) = $3,406.60 $3,406.60 ÷ 52 = $65.51 (weekly)

  16. Section 2.5, pp. 140-141 (11, 12) 11. .35a = $94.50 multiply each side by 24 24 .35a = $2,268 divide each side by .35 a = $6,480 annual premium 12. Medical: $6,478.16 x .40 = $2,591.26 (annual) Dental: $598.00 x .45 = $269.10 (annual) Vision: $254.24 x .50 = $127.12 (annual) ($2,591.26 + $269.10 + $127.12) ÷ 52 = 57.45

  17. Problem 13 • X = vision • 3X = Dental • 3(3X +X) = Health Insurance • Linda’s Employer pays 40%, she pays 60% • 9360 x .60 = 5616 (her total cost per year) • X + 3X + 3(3X + X) = 5616 • 16X = 5616 • X = 351 • 3X = 1053 • 3(3X + X) = 4212 • Divide by 26 (bi-weekly) • 351/ 26 = 13.50 • 1053/ 26 = 40.50 • 4212/ 26 = 162.00

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