Consider the two health insurance options available to employees of Helga's Consulting Services. The employees can decide between the high-deductible health plan (HDHP) that is combined with a health savings account (HSA), and a preferred-provider managed care plan. Assume that families' only concern is the medical expenses they have to pay out-of-pocket (including premiums). Also assume that the employees' employer contributes $500 to each employee's HSA annually and that both insurance plans have a coinsurance rate of 0% ($0 co-pay)

1. Suppose a family expects to have $3,600 in medical expenses for the year. Based on the out-of-pocket medical expenses this family should expect to incur under each plan for the entire year, this family should choose the ___________ plan because it will save them_$___________.
2. For employees considering these two plans, they could determine that a family will have lower out-of-pocket expenditures (including the premiums) with the HDHP and HSA, compared to the PPO, as long as their annual medical expenses are no greater than __$__________________.

2. What is wage pass-through? Explain and provide a numeric example.

Table 1. PPO High- Family deductible Plan health plan (HDHP) with a Health Savings Account (HSA) Annual: Deductible $700 $3,000 Out-of-pocket $6,000 $10,000 Maximum Coinsurance/Co- $0 SO pay Premiums per month: Employer $1,363 $801 Employee $475 $290 Total $1,838 $1,091