Rachel receives employer provided health insurance.The employer's cost of the health insurance is $6,000 annually.What is her employer's after-tax cost of providing the health insurance,assuming that its marginal tax rate is 35 percent?

Question

Quizplus · Accepted Answer

The employer's after-tax cost is calculated by reducing the cost of the insurance by the tax savings. The tax savings is the cost of the insurance multiplied by the tax rate: $6,000 * 0.35 = $2,100. Therefore, the after-tax cost is $6,000 - $2,100 = $3,900.

Rachel Receives Employer Provided Health Insurance