Exam #1

Question 1

reasons why Employee Benefits came about

Answer 1

industrialization and Great Depression

1940s and 50s federal gov restrictions on wage levels

Question 2

What is OASDI

Answer 2

Old Age Spouse (or Survivor) Disability Income

Question 3

What are the tax rates for OASDI

Answer 3

it is 12.4% and the employee pays 6.2% and employer pays 6.2%

Question 4

What is the purpose of Social Security

Answer 4

to promote Economic Security
increase access to certain services
Raising living standards
add to U.S. Economic Stability

Question 5

Why do employers offer benefits

Answer 5

cost advantage
Recruiting
tax incentives

Question 6

what is the wage limit for social security to be able to tax

Answer 6

$118,500

this means the most an employee and employer can pay in S.S. tax is $7,347

Question 7

Factors influencing Employment Benefits

Answer 7

Industrialization
organized labor
Wage controls
cost advantages
inflation
legislation

Question 8

Most americans prefer employer-provided health coverage?

Answer 8

TRUE

Question 9

The planning cycle

Answer 9

Current Situation: where am i now?
Goals: where do I want to be?
Brainstorm Alternatives: How can I accomplish my goals?
Analyze and select alternatives
Create a plan using the alternatives chosen
Reevaluate Periodically

Question 10

What are the lifetime planning Phases?

Answer 10

Asset Accumulation
Conservation/Protection
Distribution

Question 11

Planners providing investment advice must register with

Answer 11

the Securities and Exchange Commision

Question 12

Planners in the securities industry must register with

Answer 12

Financial Industry Regulatory Authority

Question 13

What is ERISA

Answer 13

Employment Retirement Income Security Act

it regulates medical, Life and Disability Income, Pension Programs

Question 14

Why was ERISA adopted

Answer 14

Car company collapsed and and a lot of worker’s pension plans were affected

Question 15

what does ERISA do?

Answer 15

it created new requirements for private-sector defined pension plans and established Pension Benefit Guaranty Corporation (PBGC)

Question 16

how is PBGC funded?

Answer 16

insurance premiums paid by companies that have pension plans

investment income

Question 17

list in order what was added to social security and time period

Answer 17

Social security adopted
Spouse/survivor added
COLA added
Disability benefits added
Medicare adopted
this all happened between 1935-1965

Question 18

social security covers

Answer 18

Salaries, wages 
paid leaves
Severance pay
Stock compensation
tips if over $20 per month

Question 19

Medicare must be paid by everyone

what is the % of income

Answer 19

both employer and employee must pay 1.45% (total 2.9%)

employee only pays an additional 0.9% on wages over $200,000

Question 20

Average retirement benefit amount

Answer 20

$1304

Question 21

what average age of retirement for the millennial generation?

Answer 21

67

Question 22

the Social Security reserve will last until

Answer 22

2035

Question 23

the disability trust reserve will last

Answer 23

until 2023

Question 24

medicare will last until

Answer 24

2028

Question 25

what are “Defined Benefit” plans

Answer 25

these are traditional pension plans

Question 26

what are “Defined Contribution” plans

Answer 26

Pre-tax savings plans

ex. 401(K)

Question 27

What are the four parts of medicare

Answer 27

A. Hospitalization
B. Other Medical Costs
C. Medicare Advantage
D. Drugs

Question 28

what does part A of medicare cover?

Answer 28

expenses in the hospital,
expenses at a nursing facility
doctor visiting your home
Hospice care

Question 29

There are deductibles and co-payments for medicare.

Answer 29

True

Question 30

Medicare pays roughly how much of the costs

Answer 30

80%

Question 31

How is Part A of medicare funded?

Answer 31

Payroll taxes
taxes coming from social security
interest from medicare reserves
premiums

Question 32

Medicare Part B pays for

Answer 32

other medical expenses

ex. x-rays, Ambulances, Lab Tests

Question 33

how is part B of medicare funded?

Answer 33

premiums deducted by Social Security checks
and
interest from medicare reserve

Question 34

what is the consequence for delaying Part D of medicare

Answer 34

penalty of 1% of the base premium per month delayed after eligibility

Question 35

What is the Doughnut whole in medicare Part D

Answer 35

the patient pays 45-58% until they pay $4850
45% of the cost of name brands
58% of the cost of generic brands

Question 36

Medicare part A and B are called

Answer 36

“fee for service” plans