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 the employer's marginal tax rate is 21 percent and is profitable?

Question

Quizplus · Accepted Answer

The after-tax cost is the $6,000 outflow less the $1,260 ($6,000 × 21 percent) of income tax benefit.

Rachel Receives Employer Provided Health Insurance