Chapter 18 Flashcards
Define Assumption of Risk Doctrine
Defense against a negligence claim that bars recovery for damages if a person understands and recognizes the danger inherent in a particular activity or occupation
Define Average Indexed Monthly Earnings (AIME)
Under the OASDI program, the person’s actual earning are indexed to determine his primary insurance amount.
Define Competitive State Fund
A state fund that provides workers compensation insurance and competes with private insurers.
Define Contributory Negligence Doctrine
Common law defense blocking an insured person from recovering damages if he or she has contributed in any way to the accident.
Define Credit (quarter of coverage)
Needed before you or your family can receive benefits, it is earned when you work for a certain amount of work in covered employment. In 2014 you receive one credit for each $1160 of covered earnings. A maximum of four credits can be earned each year.
Define Currently Insured
Status of a covered person under the OASDI program who has at least six credits out of the last thirteen quarters, ending with the quarter of death, disability, or entitlement to retirement benefits.
Define Delayed Retirement Credit
Available to those that delay receiving retirement benefits beyond the full retirement age, it is the % increase you get from the time you reach full retirment age until you start receiving benefits, or until you reach age 70.
Define Diagnosis-Related Groups (DRGs)
Method for reimbursing hospitals under the Medicare program. Under this system, a flat, uniform amount is paid to each hospital for the same type of medical care or treatment.
Define Disability Insured
Status of an individual who is insured for disability benefits under the OASDI program
Define Earnings Test (Retirement Test)
Test under the OASDI program that reduces monthly cash benefits to those beneficiaries who have annual earned incomes in excess of the maximums allowed.
Define Experience Rating
(1) Method of rating group life and health insurance plans that uses the loss experience of the group to determine the premiums to be charged.
(2) As applied to property and casualty insurance, the class or manual rate is adjusted upward or downward based on past loss experience.
(3) As applied to state unemployment insurance programs, firms with favorable employment records pay lower unemployment compensation tax rates.
Define Extended Benefits Program
Benefits available to workers who exhaust their regular benefits in state with high unemployment. It provides up to 13 weeks of additional benefits.
Define Fellow Servant Doctrine
When the injured worker could not collect if the injury resulted from the negligence of a fellow worker.
Define Full Retirement Age
Age at which unreduced retirement benefits are payable to beneficiaries under the SS program.
Define Fully Funded Program
Means that the accumulated OASDI trust fund asset plus the PV of future contributions will be sufficient to discharge all liabilities over the valuation period.
Define Fully Insured
Insured status of a covered person under the OASDI program. To by fully insured for retirement benefits, 40 credits are required.
Define Hospital Insurance (Medicare Part A)
Part A of Medicare that covers impatient hospital care, skilled nursing facility care, home health-care services, and hospice care for Medicare beneficiaries.
Define Individual Equity
Means that contributors receive benefits directly related to their contributions; the actuarial value of the benefits is closely related to the actuarial value of the contribution.
Define Liability Without Fault
Principle on which workers compensation is based, holding the employer absolutely liable for occupational injuries or disease suffered by workers, regardless of who is at fault.
Define Means Test
Used in public assistance; welfare applicants must show that their income and financial asset are below certain levels as a condition of benefit eligibility.
Define Medical Insurance (Medicare Part B)
Part B of the Medicare program that covers physician’s fees and other related medical services. Most eligible Medicare recipients are automatically included unless they voluntarily refuse this coverage.
Define Medicare Advantage Plans (Part C)
Private health insurance plans that are part of the Medicare program.
Define Medicare Prescription Drug Coverage (Part D)
Plans that provide coverage for prescription drugs under the Medicare program; beneficiaries have a choice of plans.
Define Monopoly State Fund
In some states, covered employers generally must purchase workers compensation from the state fund, or self-insure the risk
Define Primary Insurance Amount (PIA)
Monthly cash benefit paid to a retired worker at full retirement age, or to a disabled worker eligible for benefits under the OASDI program.
Define Short-Term Involuntary Unemployment
Periods during which weekly cash benefits are paid to unemployed workers.
Define Social Adequacy
Means that benefits paid should provide a certain standard of living to all contributors. This means that the benefits paid are heavily weighted in favor of certain groups, such as low-income persons, large families, and the presently retired aged.
Define Social Security
Common name for OASDI, the most important social insurance program in the US.
Define Unemployment Insurance
Federal-state programs that pay weekly cash benefits to workers who are involuntarily unemployed.
Define Workers Compensation
Insurance that covers payment of all workers compensation and other benefits that the employer must legally provide to covered employees who are occupationally disabled because of a job-related accident or disease.
Why are social insurance programs necessary? 3
- To help solve complex social problems
- To provide coverage for perils that are difficult to insurance privately
- To provide a base of economic security to the population.
What characteristics do social programs have that distinguish them from other government insurance programs? 8
- Most programs are compulsory
- Programs are designed to provide a floor of income
- Programs pay benefits based on social adequacy rather than individual equity.
- Benefits are loosely related to earnings
- Programs, benefits, and benefits formulas are prescribed by law.
- A formal means test is not required
- Full funding of benefits is unnecessary
- Programs are designed to be financially self-supporting.
What groups are covered under the SS program? 7
- Employees in private firms
- Federal civilian employees
- State and local government employees
- Employees of nonprofit organizations
- Self-employer persons who earn $00/year or more
- Domestic employees in private homes who earn $1500/year or more
- Miscellaneous other groups, including ministers, US military personnel, and railroad workers.
Left off on page 7 in ch 18.
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