The 45 year-old The Beans and Salsa Company (BSC) is a VA based producer of humus, dips and chips products. Due to their great success, they operate in 9 locations around the U.S. The BSC employs 31,300 full time employees in the US. It is a publicly traded successful corporation with strong brand name. The fiscal year of the company is July 1 to June 30 (July 1, 2020 June 30, 2021 is fiscal year 2020).

So far, the BSCs employees had 15 babies born in fiscal year 2020. The CFO had open heart surgery and 11 employees had various expensive surgeries. All the babies were healthy except the pre-mature baby who stayed in the hospital for 6 months and had 2 surgeries to save his life. The human resources department asked the employee benefits consultant Zenadu Benefits Consulting to help the company with the health care benefits and potentially by self-insuring them. [This material is explained in chapters 20, 22 and 23].

The Beans and Salsa Company (BSC) uses Kaiser Permanente in CA and Washington D.C. as well as Anthem BCBS for the two choices of health plans offered to the employees and their families:

Overall the 3 plans are as follows: 1. One PPO plan without HSA with the lowest possible deductible, and 2. A second PPO plan with HSA with medium deductible, and 3. An HMO Staff model of Kaiser Permanente.

The employer provides $800 each month to each employee. The rest is paid by the employee using a premium conversion plan (payroll deductions before taxes).

The plans are as follows from Anthem BCBS:

• PPO without HSA with minimal deductible (with co-pays and co-insurance) is available in all locations (Total premiums asked by the insurer for employee only [without spouse and children] is $970 per month)
• PPO with HSA with medium deductible is available in all locations (Total premiums asked by the insurer for employee only [without spouse and children] is $710 per month).
• The Kaiser Permanente HMO staff model is available only in Northern VA and CA (Total premiums asked by the insurer for employee only [without spouse and children] is $820 per month)

Following are the plans:

	Anthem BCBS	Anthem BCBS	Kaiser Permanente Staff model
	PPO without	PPO with	HMO
	HSA with	HSA	Model
	lowest deductible	with Medium	(minimum choice - no out of networks
		deductible
Deductibles	$400	$1,600	0
Co-insurance	20%/80% for surgery and imaging	Co-ins: 20%/80% for surgery and imaging	0
co-pays	$30-PCP/$45 - specialist; hospital - $300 not to exceed 1,200	$30-PCP/$45 - specialist; hospital - $300 not to exceed 1,200	$30-PCP/$45 - specialist; hospital - $300 not to exceed 1,200
Max per year	$3,000.00	$7,000.00	$ 2,000.00

Following is a case of illness:

PCP x 4

specialist x 8

hospital days x 10

surgery and anesthesia $15,000

imaging - $4,000

Drugs are not included in the maximum per year

Question

What is the out of pocket expense for this illness for the PPO with the HSA?

Group of answer choices

A- $7,200

B- $6,300

C- $6,780

D- $7,000

The 45 year-old The Beans and Salsa Company (BSC) is a VA based producer of humus, dips and chips products. Due to their great success, they operate in 9 locations around the U.S. The BSC employs 31,300 full time employees in the US. It is a publicly traded successful corporation with strong brand name. The fiscal year of the company is July 1 to June 30 (July 1, 2020 June 30, 2021 is fiscal year 2020).

So far, the BSCs employees had 15 babies born in fiscal year 2020. The CFO had open heart surgery and 11 employees had various expensive surgeries. All the babies were healthy except the pre-mature baby who stayed in the hospital for 6 months and had 2 surgeries to save his life. The human resources department asked the employee benefits consultant Zenadu Benefits Consulting to help the company with the health care benefits and potentially by self-insuring them. [This material is explained in chapters 20, 22 and 23].

The Beans and Salsa Company (BSC) uses Kaiser Permanente in CA and Washington D.C. as well as Anthem BCBS for the two choices of health plans offered to the employees and their families:

Overall the 3 plans are as follows: 1. One PPO plan without HSA with the lowest possible deductible, and 2. A second PPO plan with HSA with medium deductible, and 3. An HMO Staff model of Kaiser Permanente.

The employer provides $800 each month to each employee. The rest is paid by the employee using a premium conversion plan (payroll deductions before taxes).

The plans are as follows from Anthem BCBS:

• PPO without HSA with minimal deductible (with co-pays and co-insurance) is available in all locations (Total premiums asked by the insurer for employee only [without spouse and children] is $970 per month)
• PPO with HSA with medium deductible is available in all locations (Total premiums asked by the insurer for employee only [without spouse and children] is $710 per month).
• The Kaiser Permanente HMO staff model is available only in Northern VA and CA (Total premiums asked by the insurer for employee only [without spouse and children] is $820 per month)

Following are the plans:

	Anthem BCBS	Anthem BCBS	Kaiser Permanente Staff model
	PPO without	PPO with	HMO
	HSA with	HSA	Model
	lowest deductible	with Medium	(minimum choice - no out of networks
		deductible
Deductibles	$400	$1,600	0
Co-insurance	20%/80% for surgery and imaging	Co-ins: 20%/80% for surgery and imaging	0
co-pays	$30-PCP/$45 - specialist; hospital - $300 not to exceed 1,200	$30-PCP/$45 - specialist; hospital - $300 not to exceed 1,200	$30-PCP/$45 - specialist; hospital - $300 not to exceed 1,200
Max per year	$ 3,000.00	$ 7,000.00	$ 2,000.00

Following is a case of illness:

PCP x 4

specialist x 8

hospital days x 10

surgery and anesthesia $15,000

imaging - $4,000

Drugs are not included in the maximum per year

Question

What is the out of pocket expense for this illness using the HMO?

Group of answer choices

A- $2,000

B- $2,500

C- $1,700

D- $1,200