Insurance Lesson 4

Question 1

Social Security from FICA & SECA paid by both employee & employer:
Employee only/self-employed:

Answer 1

6.2% up to wage base of $147,000; 1.45% on all wages

Employee only .9% Medicare surtax on wages & SE income over thresholds ($250MFJ, $200single)

Question 2

Covered by OASDI:

Answer 2

Federal since 1984, self-employed, nonprofit employees, hospital interns, domestics workers, farmer & ag workers

Question 3

Not covered by OASDI:

Answer 3

Federal prior to 1984, railroad, family employment, ministers, religious orders, student nurses, newspaper delivery under 18, persons working for college/club

Question 4

Categories of SS Benefits:

Answer 4

Retirement
Disability
Death
Survivor’s
Medicare

Question 5

Normal/Full Retirement Age

Answer 5

Before 1938: 65
1938-1942: add 2 months per year
1943-1954: 66
1955-1959: add 2 months per year
1960-current: 67

Question 6

If FRA 65, age 62 is __% of benefits
If FRA 66, age 62 is __%
If 67, age 62 is __%
Benefits reduced by __ of 1% for each month for first 3 years early retirement
Then reduced by __ if 1% for each month beyond 3 years

Answer 6

80
75
70
5/9
5/12

Question 7

Retirement Eligibility:

Answer 7

Fully insured
40 quarters
Based on dollar amount of earnings
1 Quarter = $1,510 wages subject to SS

Question 8

Benefit May increase by _% each year for delayed retirement

Answer 8

8%

Question 9

SS Beneficiaries

Answer 9

Disabled under 65
Retired fully insured 62 or older
Spouse of retired/disabled worker 62 OR caring for child under 16/disabled child
Divorced spouse if ex is 62, married for 10 years, not remarried by age 60

Question 10

Benefits Reduced if Earn Too Much

Answer 10

Early retirement: $1 for every $2 above earning threshold ($19,560 annual limit, monthly test)
At Retirement: in year of retirement, $1 for every $3 above threshold ($51,960 annual limit, monthly test) ends at FRA
Taxation: up to 85% can be taxed based on combined income

Question 11

Disability Benefit:

Answer 11

Physical/mental impairment for 5 months expected to prevent substantial work for at least 1 year or result in death
Benefits begin paying month 6
Amount depends on credits earned & age when became disabled

Question 12

Disability Eligibility:

Answer 12

Age 31+, fully insured, earned 20/last 40 quarters
Between 24-30, earned 1/2 quarters available from age 21 to disability
Between 21-24, earned 6 quarters in last 12 quarters

Question 13

Survivorship Eligibility:

Answer 13

Fully insured or currently insured (6 quarters in last 13 quarters)
Child under 18 or 19 in hs, or disabled prior to 22
Spouse caring for under 16
No coverage for spouse of currently insured
Spousal coverage for fully insured starts when age 60

Question 14

Medicare Benefits:

Answer 14

65+
3 parts: A,B,D
Auto enrolled if receiving retirement benefits or any age if receiving SS disability for at least 2 years

Question 15

Medicare Part A: Hospital Insurance (covers places)

Answer 15

Inpatient & home health, semi private room/meals/operating/recovery rooms/lab tests/X-rays, hospice, skilled nursing following covered hospital stay

Question 16

Part A Benefit Periods

Answer 16

Begins 1st day in hospital, ends 60 days after no skilled care
Deductible is $1,556 per period (1st 60 days)
After 60 days, coinsurance:
$389/day (61-90)
$778/day (91-150) lifetime reserve (only 60 total)
$194.50/day skilled nursing (21-100) - first 20 following hospital stay fully covered
Custodial not provided

Question 17

Medicare Part B Covers:

Answer 17

Doctor visits, lab tests, ambulance, outpatient, clinical research, medical equipment, mental health, 2nd opinion, home health care
Covers initial preventative visit & annual wellness visit

Question 18

Medicare Part B Does Not Cover:

Answer 18

Dental care/dentures
Cosmetic surgery
Hearing aids
Eye exams

Question 19

Medicare Part B:

Answer 19

Auto enrolled
Standard premium $170.10/mo (deducted from SS) - higher if income over $91ksingle or $182kMFJ
Deductible: $233/yr
After satisfying deductible, part B covers 80% - no stop loss

Question 20

Medicare Part C: Medicare Advantage

Answer 20

Must have A&B
Regional
Covers vision, dental, hearing

Question 21

Medicare Part D

Answer 21

Drugs

Most require premium, have deductibles, & copays

Question 22

Medicare Supplemental

Answer 22

Private

Offset costs associated with deductibles & coinsurance

Question 23

Must enroll self in Medicare if:

Answer 23

Age 65 & not receiving SS

Question 24

Medicare does not provide in Foreign Countries unless:

Answer 24

In us & foreign closer
Traveling through Canada between Alaska & another state & Canadian hospital closer
Live in us & foreign closer

Question 25

Lesson 4 Review:
Normal retirement age 65. Benefits at 64. How much reduced?

A. 20%
B. 10%
C. 7%
D. 5%

Answer 25

C

Question 26

Lesson 4 Review:
All correct about SS except?

A. Over 62 who receive SS automatically qualify for Medicare
B. For workers entitled to retirement/disability benefits, ex spouse may be eligible for benefits under former spouse’s work record
C. Medicare part a paid for by portion is SS taxes collected, premiums are charged for part b
D. Disability benefits are paid to any age worker who meets definition of disability & has earned enough credits given their age

Answer 26

A

Question 27

Lesson 4 Review:
Earns $50,000 salary. All correct except:

A. Total of $4,000 withheld for SS
B. $725 withheld for Medicare
C. $3,100 withheld for OASDI portion of SS
D. Medicare portion taxed on unlimited salary while OASDI taxed up to wage base

Answer 27

A

Question 28

Lesson 4 Review:
For most workers, how many quarters of coverage needed to be fully insured?

A. 4
B. 20
C. 40
D. 80

Answer 28

C

Question 29

Lesson 4 Review:
All following are correct except:

A. Many private insurance companies sell Medicare supplemental insurance
B. Medicare supplemental policies help pay Medicare’s coinsurance amounts & deductibles as well as other out of pocket expenses for health care
C. If worker applies for retirement/survivors benefits before 65th birthday, must file separate application for Medicare
D. Even if individual continues working after 65, should sign up for part a of Medicare

Answer 29

C

Question 30

Lesson 4 Review:
Works season job 2 months of year. Earns $100k. How many quarters earned?

A. 1
B. 2
C. 3
D. 4

Answer 30

D

Question 31

Lesson 4 Review:
Age 62. Collecting SS. To receive part a benefits must:

A. Do nothing, coverage starts immediately at 65
B. File separate application for Medicare upon 65 birthday
C. Nothing, coverage starts immediately upon receiving retirement benefits regardless of age
D. File separate application for Medicare at 67th birthday

Answer 31

A

Question 32

Lesson 4 Review:
All correct except:

A. Worker who takes early retirement benefits will receive a reduced benefit
B. Workers entitled to retirement benefits can currently take early retirement benefits as early as age 59.5
C. To qualify for retirement benefits, must be fully insured, meaning worker has earned certain number of quarters of coverage under SS system
D. Earning designated amount of money regardless of when earned through year, will credit worker with quarter of coverage for that year

Answer 32

B

Question 33

Lesson 4 Review:
All correct except:

A. Monthly benefits can be paid to disabled insured worker under 65
B. Benefits can be paid to divorces spouse of retire or disabled worker entitled to benefits if age 62+ & married for 10+ years
C. Benefits can be paid to surviving spouse including surviving divorces spouse of deceased insured worker if widow(er) age 60+
D. Benefits can be paid to dependent parents of deceased insured worker at age 59+

Answer 33

D