ACC 577 - EB Chapter 7

A percentage of annual wages is one of the methods states use to calculate weekly unemployment benefit amounts. True/False

True

An employee's average indexed monthly earnings determines the initial primary insurance amount for OASDI benefits. True/False

True

Analysis suggests that, based on an average life expectancy, taking a lower monthly benefit sooner would lead to earning about the same total benefit over one's lifetime as an individual who put off retirement to claim a higher monthly benefit. True/False

True

Part A coverage automatically qualifies an individual to enroll in Part B coverage for a monthly premium. True/False

True

Self-employed individuals must pay a FICA rate that is twice as much as a factory worker has to pay. True/False

True

Social Security disability benefits are available to disabled workers who are unable to work as a result of a serious medical impairment that lasts at least 12 months. True/False

True

Social Security pays only for total disability. True/False

True

Social Security programs were geared toward promoting the social good, which refers to a booming economy, low levels of unemployment, progressive wages and benefits, and sage and healthful working condition. True/False

True

The Social Security Act was amended in 1965 to create the Medicare program. True/False

True

The Social Security Administration defines disability as an inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment that is expected to result in death, or that has lasted for a continuous 12 months. True/False

True

The Social Security Administration increases retirement benefits by a designated percentage for each month worked beyond full retirement until age 70. True/False

True

The Social Security Administration pays monthly survivor benefits at a level ranging from 71.5% to 100% of the primary insurance amount. True/False

True

The Unemployment Compensation Act of 2008 expanded the EUC benefits to 20 weeks nationwide. True/False

True

The age for collecting full Social Security retirement benefits is gradually increasing from 65 to 67 over a 22-year period ending in 2022. True/False

True

The largest share of the FICA tax funds OASDI programs. True/False

True

The original Medicare plan is a fee-for-service plan managed by the Federal government. True/False

True

The state share of unemployment taxes may be used only for benefit costs. True/False

True

Which of the following is not one of the factors believed to have hastened the deterioration of the OASDI and Medicare trust funds? A. longer life expectancy B. increased insurance claims C. high levels of unemployment D. immigration

increased insurance claims

Explain the concept of the coverage gap within the Medicare prescription drug benefit, or Medicare Part D.

• A participant pays the deductible, $360 in 2016, before Medicare begins to provide coverage • For expenses above $360 through $3,310, the participant pays small copayments for each prescription • For expenses above $3,310 through $4,850, the participant pays o 45% of the cost of brand-name drugs o 58% for generic drugs o This expense range is known as the coverage gap. • For expenses greater than $4,850, the participant pays a small copayment equal to 5% of the cost of the prescription.

Briefly discuss Medicare Part A coverage.

• Compulsory hospitalization insurance covers both inpatient and outpatient hospital care and services o Inpatient hospital care in a semiprivate room, meals, general nursing, and other hospital supplies and services o Home health services limited to reasonable and essential part-time or intermittent skilled nursing care and home health aide services, and physical therapy, occupational therapy, and speech-language pathology ordered by a doctor o Hospice care for people with terminal illness (that is, illness that is expected to lead to death within six months), including pharmaceutical products for symptom control and pain relief, medical and support services from a Medicare-approved hospice provider, and other services not otherwise covered by Medicare (for example, grief counseling) o Skilled nursing facility care, including semiprivate room, meals, skilled nursing and rehabilitative services, and supplies for up to 100 days per year

Describe how OASDI and Medicare programs are financed.

• Funding for OASDI and Medicare programs requires equal employer and employee contributions under the Federal Insurance Contributions Act (FICA). • FICA requires that an employer pay tax based on its payroll; employees contribute tax based on earnings, which is withheld from each paycheck. • The Self-Employment Contributions Act (SECA) requires that self-employed individuals contribute to the OASDI programs, but at a different rate. • The tax rate is subject to an increase each year to sufficiently fund OASDI programs. • FICAS requires employers and employees to contribute 7.65% each; for self-employed individuals, it is generally double that amount, or 15.3%. • This tax is apportioned between OASDI and Medicare programs with the largest share of the FICA tax funding the OASDI program. • The Medicare tax, or hospital insurance tax, supports the Medicare Part A program.

Briefly discuss the eligibility criteria for unemployment insurance benefits?

• Limited voluntary employment and involuntary unemployment o Voluntary termination usually disqualifies workers from receiving benefits, unless they chose to quit for reasonable causes o Reasonable cause refers to the creation of working conditions that cannot be tolerated by any sensible person • Minimum earnings and employment requirements o Must have been employed for a minimum period of time • Called the Base Period • A waiting period o Usually one week following claim o Possible reasons • Need for processing time • To limit costs • Capacity to work and availability for work o Mentally & physically able (ability) o Willing and ready (motivation) • Actively seeking suitable work o Jobs that require skills, knowledge, ability similar to individual's customary work o Job offers employment terms and conditions that don't violate relevant laws

List and define the three parts of the OASDI program.

• OASDI stands for old-age, survivor, and disability insurance. • Old-age benefits provide retirement income for retired workers. • The Survivor portion of the program is where the Social Security Administration pays benefits to eligible family members of deceased workers. • The Disability portion of the program is where the Social Security Administration pays benefits to seriously disabled workers and family members, paying only for total disability.

In general, a worker needs to have accumulated at least 50 credit to qualify family members for survivor benefits. True/False

False

In general, an employee must earn at least 30 credits to be eligible to receive retirement benefits. True/False

False

Medicare Part A only covers outpatient hospital care and services. True/False

False

Medicare Part D was first offered in 2004. True/False

False

Medicare Select plans are Medigap policies that present higher premiums. True/False

False

Most stated impost a waiting period, usually two weeks following submission of a claim, prior to paying unemployment benefits. True/False

False

OASDI is the abbreviation for the term Old-Age, Survivor, Disability Income. True/False

False

Physician's fees and custodial care in a nursing home are covered by Medicare Part A. True/False

False

Social Security retirement funds are expected to remain sustainable in the coming decades. True/False

False

Stepchildren, grandchildren, or adopted children are not considered as eligible for survivor benefits. True/False

False

The Medicare tax is subject to a taxable wage base. True/False

False

The Social Security Administration is the only federal agency overseeing Social Security Programs. True/False

False

The Social Security Administration only issues Social Security numbers to US citizens. True/False

False

The national federal-state unemployment insurance program provides weekly income to individuals who become unemployed for any reason. True/False

False

In 2016, what was the average monthly disability benefit for all disabled workers? A. $540 B. $1,166 C. $2,245 D. $3,450

$1,166

In 2015, what was the annual monthly benefit for all retired workers? A. $855 B. $1,000 C. $1,335 D. $1,754

$1,335

OASDI taxes are subject to a taxable wage base. What was the taxable wage base for everyone in 2016? A. $80,100 B. $118,500 C. $120,100 D. $140,100

$118,500

In 2016, how much did an employee have to make to earn a credit for OASDI? A. $1500 B. $2240 C. $1200 D. $1260

$1260

In 2016, approximately, what was the average monthly survivor benefit for a widowed and two children? A. $1,860 B. $2,120 C. $2,680 D. $3,210

$2,680

What is the amount of contribution employer and employees must make to the Medicare tax which supports Medicare Part A? A. 1.45% B. 50% C. 3% D. 4%

1.45%

At what age are retirees first eligible for Social Security benefits? A. 65 B. 62 C. 70 D. 67

62

Which of the following is not one of three methods states use to calculate weekly unemployment benefit amounts? A. A fraction of the highest wages for a calendar quarter earned during the base period. B. A percentage of annual wages. C. A percentage of the average weekly wage earned during the base period. D. A percentage of the average monthly wages earned during the base period.

A percentage of the average monthly wages earned during the base period.

Employees forfeit Social Security credits when they change jobs or become unemployed. True/False

False

Based on the 2015 report on the status of Medicare, the projected date of the Medicare trust fund exhaustion is 2050. True/False

False

Coverage rules are the same across OASDI, Medicare, and the unemployment insurance programs. True/False

False

Funding for OASDI and Medicare programs requires equal employer and employee contributions under the _________. A. Fair Labor Standards Act of 1938 B. Federal Insurance Contributions Act C. The Social Security Act of 1935 D. Titles III and IX of the Social Security Act

Federal Insurance Contributions Act

Which of the following are not covered by Medicare Part B? A. Outpatient care B. Hospitalization C. Laboratory services D. Health screenings

Hospitalization

Which Medicare program provides beneficiaries the opportunity to receive health care from a variety of options? A. Medicare Advantage B. Medigap C. Medicare Part C D. Medicare Select

Medicare Advantage

Which of the following Medicare coverage would cover physical therapy, occupational therapy, and speech-language therapy ordered by a doctor? A. Medicare Part B B. Medicare Part A C. Medicare Part D D. Medicare Part E

Medicare Part A

This Medicare program offers voluntary supplemental medical insurance. A. Medicare Part B B. Medicare Part A C. Medicare Advantage D. Medicare Part C

Medicare Part B

Which of the following is the state unemployment tax? A. FICA B. FUTA C. SUTA D. COLA

SUTA

Which of the following are eligible for OASDI? A. Self employed individuals B. Federal government workers C. 10 year railroad employees D. Children under 18

Self employed individuals

Automatic cost-of-living adjustments are applies to OASDI benefits to guard against inflation. True/False

True

In 2015, more than 64 million Americans received Social Security benefits. True/False

True

In 2016, 6.2% of employer and employee contributions were ser aside from FICA to fund OASDI programs. True/False

True

Medicare Part B covers the services not included under Medicare Part A. True/False

True

Medicare Part D was established by the Medicare Prescription Drug Improvement and Modernization Act of 2003. True/False

True

Medigap insurance supplements Medicare Parts A & B and is available from private insurance companies. True/False

True

The Social Security Administration defines "gainful" work activity as all of the following, except: A. Work intended for profit, whether or not a profit is realized. B. Work performed for pay or profit. C. Work performed full-time. D. Work of a nature generally performed for pay or profit.

Work performed full-time.

Which of the following statements is true when comparing workers' compensation with Social Security disability and survivors' benefits? A. Worker's compensation pays for medical care for work-related injuries. B. Workers' compensation does not pay for permanent partial or permanent total disability. C. Social Security pays benefits for permanent partial or permanent total disability. D. Social Security payments do not have a waiting

Worker's compensation pays for medical care for work-related injuries.

The state unemployment employer tax rate varies according to ______ system. A. an experience rating B. a duration of work C. an average indexed monthly earnings D. a fully insured

an experience rating

Effective 2016, what was the annual increase in Social Security benefits? A. 1% B. no increase C. 7.2% D. 9%

no increase