Question

Maggie Travers works in the town's sanitation department. She is on a group health plan provided by the state for municipal employees. The insurance costs $6700 annually. The state pays 40% of the cost. Maggie is paid semi-monthly. How much should she expect to be deducted from her pay each paycheck for health insurance?

Answer 1

$167.50

Explanation:

Since the state pays 40% of the health insurance, Maggie will have to pay 100 - 40 = 60% of the insurance amount annually

60% = 0.6 decimal

So Maggie pays 0.6 x 6700 = $4,020

Maggie is paid semi-monthly ie 2 paychecks a month

In a year, there are 12 months so Maggie receives 24 paychecks annually

The total insurance amount of 4020 is split over 24 paychecks

So each paycheck deduction will be 4020/24 = $167.50