Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the company's health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.

The monthly premium cost to Ronald for the Blue Cross/Blue Shield plan will be $58.75. For all doctor office visits, prescriptions, and major medical charges, Ronald will be responsible for 15 percent, and the insurance company will cover 85 percent of covered charges. The annual deductible is $820.