Insurance/Social Security

Question 1

What are the categories of social security benefits?

Answer 1

Retirement benefit

Disability benefit

Death benefit

Survivors benefit

Medicare

Question 2

What are the normal or full retirement ages?

Answer 2

If born before 1938
Normal retirement is 65 years

If born between 1938-42
Add 2 months per year

Between 1943-54
Normal retirement is 66

Between 1955-59
Add two months per year

Born in 1960 or later
Normal retirement is 67 years old

Question 3

What are the reduced benefits for early retirement at age 62?

Answer 3

If FRA is 65 then age 62=80% of FRA benefits
If 66 = 75%
If 67 = 70%

• Benefits are reduced by 5/9 of 1% for each month for the first three years a worker retires early
• Benefits are then reduced by 5/12 of 1% for each month beyond 3 years

Question 4

What is the definition if disability for Social Security?

Answer 4

Severe physical or mental impairment for 5 months that is expected to prevent either from performing substantial work for at least one year or result in death

How much benefit is paid depends on credit earned and the age of the worker when disabled.

Question 5

What are the requirements to be eligible for Social Security retirement benefits?

Answer 5

Worker must be “fully insured” (40 quarters of coverage)

A quarter of coverage is based in a dollar amount if earnings

1 quarter = $1360 in wages subject to SS (2019)

Question 6

How are Social security retirement benefits funded?

Answer 6

OASDI tax of 6.2% on wages subject to SS up to a wage base of $132900 (2019)

Question 7

What does OASDI stand for?

Answer 7

Old Age, Survivor and Disability Insurance

Question 8

How much is the OASDI tax for 2019?

Answer 8

6.2% on wages subject to SS up to wage base of $132900 (2019)

Question 9

What is the total Medicare and OASDI tax?

Answer 9

7.65%

Question 10

How much is the additional Medicare tax?

Answer 10

0.9% on wages, compensation, self-employment income in excess of the following thresholds:

MFJ/$250000
MFS/$125000
Single, HOH, qualifying widower with dependent child: $200000

Question 11

Describe Social Security increase in benefits:

Answer 11

Additional increase in monthly benefits by delaying receipt of SS each month after FRA until age 70.

8% per year
2/3 of 1% per month

Question 12

Describe eligibility for Social Security disability benefits:

Answer 12

A worker is covered for disability if:

• Age 31 or greater; the worker is fully insured (40 quarters) and earned 20 quarters in the last 40 quarters
• Between ages 24-30; if earned 1/2 quarters available since age 21 to disability
• Ages 21-24; earned 6 quarters in the last 12 quarters

Question 13

Describe survivor eligibility for Social security benefits:

Answer 13

*Worker fully insured (40 quarters) OR
Currently insured (6 quarters of coverage in the last 13 quarters)

• Child under 18 if worker currently or fully insured
• Spouse if worker fully insured, NO for currently insured
• Spouse with child under 16 if worker is fully or currently insured

Question 14

What are the important Social Security beneficiaries?

Answer 14

• a disabled worker under age 65
• A retired insured worker age 62 or older

*A spouse of a retired or disabled worker who is at least 62
OR
Is caring for a child under age 16 or disabled child

*A divorced spouse of a retired or disabled worker, if the ex-spouse is age 62 and was married to the worker for at least 10 years and did not remarry by age 60

Question 15

How are Social Security benefits reduced if you earn too much (2019)?

Answer 15

Early retirement: $1 for every $2 above earnings threshold for persons below FRA; $17640 (annual limit, monthly test)

FRA: in the year in which you reach the age of retirement; $1 for every $3 above the threshold; $46,920 (annual limit, monthly test); earnings based reductions end at FRA

Question 16

How are Social Security benefits taxed?

Answer 16

• up to 85% of benefit may be taxed
• Thresholds based on Combined Income, includes; AGI, non-taxable interest, foreign earned income, 1/2 of retirement benefit

MFJ: 32000/44000

Single 25000/34000

Question 17

What does Medicare part A cover?

Answer 17

Hospital insurance (covers places)

• Inpatient hospital care and home health care
• Semi-private room, meals, operating and recovery room, lab tests, x-rays
• Hospice coverage
• Skilled nursing care facility FOLLOWING a covered hospital stay

Question 18

What are the benefit periods for Medicare part A?

Answer 18

• a benefit period begins on the first day the insured is in the hospital and ends after 60 days of no further skilled care
• The deductible is $1364 per benefit period; the first 60 days is just the deductible
• Beyond the 60th day, the following coinsurance amounts apply:
• *$341 for days 61-90, per day
• *$682 for days 91-150 for each lifetime reserve day. There are a total of 60 lifetime reserve days
• *$170.50 per day for skilled nursing care days a 21-100, the first 20 days following a hospital start are covered 100%

Custodial care services are NOT provided; including nursing care facilities that provide assistance with ADLs

Question 19

What is covered under Medicare part B?

Answer 19

Doctor visits, lab tests, ambulance, outpatient therapy, clinical research, durable medical equipment, mental health, getting a second opinion before surgery and home health care

Covers an initial preventative visit and annual wellness visit.

Question 20

What is NOT covered by Medicare is B?

Answer 20

Dental Care, dentures
Cosmetic surgery
Hearing aids
Eye exams

Question 21

Describe Medicare part B:

Answer 21

Insured automatically enrolled unless they opt out

Standard premium:$135.50 per month, deducted from SS, higher premiums for single over $85k and MFJ over $170k

Deductible is $185 per year, then 80% coverage with no stop-loss limit

Question 22

What is Medicare Part C?

Answer 22

Medicare advantage

• Must own and pay for part A and part B
• Coverage similar to HMO, PPO or POS plan
• Coverage is regional. Emergency care will be provided outside coverage area
• Coverage includes vision, dental, hearing

Question 23

What is Medicare Part D?

Answer 23

Provides prescription drug benefits

Wide variation across plans. Most require a premium and have deductibles and copays

Question 24

What is Medicare Supplemental insurance?

Answer 24

Sold by private insurance companies and is designed to offset costs associated with Medicare deductibles and coinsurance

Question 25

Describe Medicare coverage on foreign countries:

Answer 25

In most situations Medicare does not provide coverage outside of the US, three exceptions:

1) you’re in the US when you have a medical emergency and the foreign hospital is closer than the nearest US Hospital
2) you’re traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs and the Canadian hospital is closer than the nearest US Hospital
3) you live in the US and the foreign hospital is closer to your home than the nearest US Hospital, regardless of whether it is an emergency or not