FIN 381 test 3 (final) ch.18

A serious current concern with the Social Security program is the depletion of the Disability Income Trust Fund. Each of the following contributed to the depletion of the fund EXCEPT

changing to a less stringent definition of disability

Beth was injured at work and is eligible to receive workers compensation benefits. All of the following benefits are provided under workers compensation EXCEPT

retirement benefits for dependents.

Frank is doing some life insurance planning. A financial advisor said, "be sure to consider Social Security when examining sources of funds available for family support if you die." The financial advisor was referring to which Social Security benefit?

survivor benefits

Which of the following is a reason that social insurance programs exist?

to provide a base of economic security

Which of the following statements about benefits provided by workers compensation programs is true?

Death benefits and benefits to eligible survivors are payable if a worker is killed on the job.

Which of the following statements about the full retirement age under the Social Security program is true?

Delayed retirement beyond the age for full benefits increases the amount of the monthly benefit.

Which of the following statements regarding the Emergency Unemployment Compensation (EUC) program is true?

EUC benefits are funded entirely by the federal government.

As of this year, Brad, age 50, has 40 credits under the Social Security program. These credits were all earned in the last 10 years. What is Brad's insured status under the program?

He is currently and fully insured.

Which of the following statements about participation in the Social Security program is (are) true? 1.Most private sector employees are covered under the Social Security program. 2.Each employee has the right to "opt out" of the Social Security program if the employee does not wish to participate in the program.

I only

Which of the following statements about the financial status of Medicare Part A is (are) true? 1.Part A has serious financial problems. 2.Reforms instituted by Congress have reduced total Part A expenditures in recent years.

I only

Which of the following statements about the financing of OASDI and Medicare is (are) true? 1.There is a maximum taxable wage base for OASDI. 2.There is a maximum taxable wage base for Part A of Medicare.

I only

Which of the following statements about hospice benefits under the hospital insurance (Part A) portion of Medicare is (are) true?

II only

Which of the following statements about the impact of the implementation of the Affordable Care Act (ACA) on workers compensation is true?

Implementation of the ACA will create higher healthcare provider prices.

One type of Medicare Advantage Plans provides focused care for a specific group of people, such as diabetics and nursing home residents. This type of Medicare Advantage Plan is a

Special Needs plan.

All of the following persons are eligible for survivor benefits under Social Security EXCEPT

a surviving brother or sister, age 60 or older.

Which of the following statements about the financing of the Social Security program is (are) true? 1.Although the self-employed pay an OASDI tax rate that is twice the employee rate, they are allowed certain deductions that reduce the effective tax rate. 2.The earnings base on which OASDI taxes are paid increases annually based on changes in average wages in the national economy.

both I and II

Which of the following statements about the characteristics of social insurance programs is true?

Benefits are loosely related to a worker's earnings.

All of the following statements about the Medicare prescription drug benefit are true EXCEPT

Coverage is limited to when a beneficiary is hospitalized or a resident of rest home.

Under Part A of Medicare, how is reimbursement for inpatient hospital care determined?

Hospital care is classified into diagnosis-related groups (DRGs) and the amount reimbursed depends on the DRG classification of the care delivered.

Which of the following statements about Medigap policies is (are) true? 1.Insurers are required to have an open enrollment period of 6 months from the date an applicant first enrolls in Medicare Part B and is age 65 or older. 2.Most policies are of limited value because they largely duplicate benefits already provided by Medicare.

I only

Which of the following statements about problems and issues in workers compensation insurance is (are) true? 1.Uncertainties created by the increasing use of medical marijuana is a growing problem for employers. 2.Enactment of the Affordable Care Act led many employers to stop offering medical benefits as part of the workers compensation coverage on their employees.

I only

Which of the following statements about the Medicare prescription drug benefit is (are) true? 1.Beneficiaries select a prescription drug plan and pay monthly premiums, with the premium reduced or waived for low-income beneficiaries. 2.The benefit provides first-dollar coverage of prescription drugs up to a maximum of $10,000 per year, but no coverage after $10,000.

I only

Which of the following statements about the medical insurance (Part B) portion of Medicare is (are) true? 1.Participation in Part B of Medicare is voluntary. 2.It is provided at no cost to anyone who is fully insured under Medicare.

I only

Which of the following statements about taxation of Social Security retirement benefits under federal law is (are) true? 1.Social Security retirement benefits are never considered taxable income. 2.Up to 85 percent of Social Security retirement benefits may be considered taxable income, depending on the amount of other income received by the beneficiary.

II only

Which of the following statements about the Social Security cost-of-living adjustment is (are) true? 1.The amount of the adjustment is limited to a maximum of 2.5 percent annually. 2.Increases are based on changes in the consumer price index.

II only

Which of the following statements about the role of physicians with respect to Medicare claims is (are) true? 1.Physicians who do not accept an assignment of Medicare claims can charge as much as 200 percent of the Medicare-approved fee. 2.Physicians who accept assignment agree to accept the Medicare-approved amount as payment in full.

II only

Which of the following statements is (are) true with respect to the Medicare Advantage Plans? 1.These plans replace the original Medicare program, Parts A and B, which are no longer available to new retirees. 2.These plans provide an opportunity for retirees to receive Medicare coverage through private health care plans.

II only

Which of the following statements about disability benefits under Social Security is true?

In addition to the disabled worker receiving the benefits, benefits can also be paid to eligible dependents.

Dale, age 65, was dismayed to learn about all of the deductibles, co-pays, limits, and exclusions in the Medicare program. Dale bought a type of health insurance specifically designed to supplement Medicare, and selected his coverage from among 10 standard policies that private insurers offer. What type of health insurance did Dale purchase?

Medigap insurance

Which of the following statements about unemployment insurance benefits is true?

Most states pay regular benefits for a maximum duration of 26 weeks.

Which of the following statements about workers compensation programs is true?

Options available for complying with the law may include one or more of the following: self-insurance, private insurance, or insurance through a state fund.

Which of the following statements about the financing of unemployment insurance benefits is true?

Part of an employer's contribution is used for administrative expenses, to fund extended benefits, and to maintain a loan fund that can be drawn upon if the state's account is depleted.

Marion owns substantial financial assets. She was surprised that she qualified for Social Security retirement benefits when she retired because of her high investment income. What characteristic of social insurance programs is Marion overlooking with respect to her Social Security retirement benefits?

Social insurance benefits are not means tested.

All of the following persons are eligible for a benefit under the retirement portion of the Social Security program EXCEPT

a divorced spouse, age 55, who was married to the retired worker for 6 years.

In addition to most persons over age 65, which of the following persons is (are) eligible for Medicare benefits? 1.Persons under age 65 who have been entitled to Social Security disability benefits for at least 24 months 2.Persons under 65 who need long-term kidney dialysis treatment or a kidney transplant

both I and II

Objectives of unemployment insurance include which of the following? 1.To help unemployed workers find jobs. 2.To encourage employers to stabilize employment.

both I and II

Which of the following statements about the coverage of health care services under Part A of Medicare is (are) true? 1.Services in the patient's home are covered if the patient requires skilled care and meets certain conditions. 2.Hospice care is available for beneficiaries with a terminal illness.

both I and II

Which of the following statements about the problems and issues of unemployment insurance programs is (are) true? 1.Many state programs are inadequately financed. 2.Only a small portion of the total unemployed receive benefits at any time.

both I and II

Which of the following statements is (are) true with respect to the Social Security earnings test? 1.The earnings test does not apply to dividends, interest, and rental income. 2.The earnings test does not apply to work earnings for those individuals who have reached the full retirement age under Social Security.

both I and II

One insured status under Social Security requires you to have earned at least six credits during the last 13 calendar quarters ending with the quarter of death, disability, or entitlement to retirement benefits. This insured status is

currently insured.

Marco, a risk manager in California, is interviewing for a new position in the state of Washington. When Marco asked about methods of providing workers compensation, the answer surprised him. In Washington, employers can self-insure the risk or obtain coverage through a state fund. Private insurers do not market workers compensation insurance in Washington. Washington uses a

monopoly state fund.

Which of the following statements about a worker's primary insurance amount is (are) true? 1.It is the monthly amount paid to a worker who elects early retirement at age 62. 2. it is equal to 50 percent of the worker's final average pay that was subject to Social Security taxes.

neither I nor II

hich of the following statements concerning Medicare Prescription Drug Plans is (are) true? 1.The monthly premium is based on the health status of the beneficiary and the number of prescriptions the beneficiary needs. 2.After the beneficiary has paid an initial deductible, Medicare pays the entire cost of all prescription drugs the beneficiary needs.

neither I nor II

An important current issue in state workers compensation programs is the overuse of a certain category of pain-killing drugs. These drugs have been associated with drug overdoses and drug addiction. This category of drugs is called

opiates.

Which of the following is a current problem with workers compensation programs?

overuse of opiate prescription drugs in workers compensation.

In order to receive unemployment insurance benefits, an unemployed worker must meet all of the following eligibility requirements EXCEPT

satisfy a 6-month waiting period.

Which of the following expenses is covered under the medical insurance (Part B) portion of the Medicare program?

the fee charged by a surgeon for an operation

Under the Medicare Prescription Drug Program, a coverage gap (also called a "donut hole") exists after the beneficiary and drug plan pay a certain amount for covered drugs. The coverage gap refers to

the temporary gap in coverage that begins when the beneficiary and drug plan pay a certain amount for covered drugs during the year and ends when the catastrophic limit is reached and coverage resumes.

Which of the following statements about Social Security disability benefits is true?

A strict definition of disability is used in the Social Security program.

As an alternative to the Original Medicare Plan, beneficiaries can elect to enroll in private health insurance plans that cover all services that the Original Medicare Plan covers except hospice care. These private health insurance plans that are an alternative to the Original Medicare Plan are called

Medicare Advantage Plans.

Under one type of Medicare Advantage Plan, members of the plan can see any doctor or health services provider that accepts Medicare patients. If members receive care outside the network of member physicians and care facilities, they must pay higher out-of-pocket costs. This type of Medicare Advantage Plan is a

Medicare PPO.

All of the following statements about the Medicare Prescription Drug Plan are true EXCEPT

Medicare prescription drug coverage is funded exclusively through the Part A payroll tax.

Which of the following statements about the characteristics of social insurance programs is true?

They are designed to provide a floor of income with respect to the risks that are covered.

Tony is 48 years old. He earned the maximum taxable wage base under Social Security annually between the time when he was 26 and when he was 40. At age 40, he dropped out of the workforce to care for children as his wife had a high-paying job. Which statement is true regarding Tony's insured status under Social Security?

Tony is fully insured, but not currently insured.

Which of the following statements is true with regard to the Medicare program?

While Social Security old-age benefits are available at age 62, Medicare Part A benefits are not available, in most cases, until age 65.

All of the following changes would reduce the long-range deficit for the Social Security program EXCEPT

delay scheduled increases in the full retirement age.

Prior to the passage of workers compensation laws, all of the following common law defenses could be used by employers to avoid financial responsibility for work-related injuries EXCEPT

employer liability laws.

EFG Company experienced a reduced demand for its products during a recession. EFG managers were considering laying off some workers when the personnel director said, "Let's not lay off these workers. If we do, our unemployment insurance premiums will increase. The state considers employment stability when determining our premium." Considering the firm's employment record when determining the rate to charge for unemployment insurance is called

experience rating.

Which of the following would help to reduce the long-range OASDI actuarial deficit?

increasing the payroll tax rate