The Badar family has a basic health insurance plan that pays 80% of out-of-hospital expenses up to $3,000 a year after a deductible of $250 per person. If three family members have doctor and prescription drug expenses of $980, $1,840, and $220, respectively. (i) How much will the Badar family and the insurance company each pay?

(ii) How could they benefit from a flexible spending account established through Mr Badars employer? (iii) What are the advantages and disadvantages of establishing such an account?