Rachel receives employer-provided health insurance. The employer's cost of the health insurance is $5,700 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 andthe employer is profitable?

Question

Quizplus · Accepted Answer

The employer's after-tax cost would be $4,503 ($5,700 x 0.79) after taking the 21% marginal tax rate into account. This is the amount the employer would effectively have to pay out of pocket for providing the health insurance. Option C is the only choice that matches this calculation.

Rachel Receives Employer-Provided Health Insurance