Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CFP Course 2 Flashcard Kaplan > Module 6 - Employee Group Benefits > Flashcards

Module 6 - Employee Group Benefits Flashcards

You may prefer our related Brainscape-certified flashcards:
CFP® flashcards
1
Q

Contributory Plan

A

Employee pays some portion of the premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Noncontributory Plan

A

Employer pays entire premium cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Employee Contributions Taxability Life Insurance

A

Employees pay for group life insurance with after-tax dollars, unless the coverage is part of a cafeteria (section 125) plan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Types of Group Life Insurance Coverage

A

Group Term Life
Accidental Death and Dismemberment
Group Ordinary/Group Paid-Up
Group Universal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Group Term Life (7)

A
  • Premiums are deductible as a business expense
  • absence of medical exam requirement
  • tax-free first $50,000 of coverage
  • Coverage must be based on a formula that applies uniformly to all plan participants
  • low-cost and tax advantaged
  • simple administration
  • premium waiver
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Section 79

A

Four requirements to qualify as group term insurance:

  1. Coverage must provide a general benefit.
  2. Coverage must be provided to a group (all employees of an employer) of employees as a part of their compensation for services rendered as an employee
  3. Insurance policy provided must be a master policy or a group of individual policies
  4. The amount of insurance provided to each employee must be consistent with no individual selection
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Section 79 “General Benefit” Definition

A

Accidental death and dismemberment insurance, travel insurance, and health and accident insurance are not considered to provide a general benefit since such policies pay a benefit in only certain circumstances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Section 79 “Group of employees” Definition

A

All the employees of an employer - or fewer if individual selection does not define the group. Can cover a class. A self-employed individual, partner of 2% owner of an S Corp is not an employee for this purpose. Life insurance does not qualify as group term life insurance if provided to fewer than 10 employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Section 79 rules for Group Term Life - if the employer has less than 10 employees

A
  • coverage is provided for all full-time employees
  • the amount of insurance is based on a uniform percentage of compensation
  • the amount of insurance on an employee is based on brackets of coverage - with no brackets exceeding the bracket below by more than 2.5 times - and the insurance amount on an employee in the lowers bracket is at least 10% of that provided in the top bracket; and
  • evidence of insurability may be requrested via a medical questionnaire completed by the employee, but may not be based on a physical examination and additional voluntary information may not serve as a basis for determining premium rates.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

IRC Section 416(i) “Key Employees”

A
  • an officer of the employer with annual compensation from the employer exceeding 185k
  • a greater-than 5% owner of employer
  • a greater-than-1% owner of the employer, having annual compensation from the employer in excess of $150,000
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

IRC Section 416(i) “Nondiscriminatory” for Group Life Insurance toward Key Employees (one of four)

A
  • at least 70% of all employees benefit from the plan (or any group term plan through the employer)
  • at least 85% of participating employees are not key employees (of all group term participants)
  • the plan benefits a non discriminatory employee classification, and
  • the plan is part of a cafeteria plan and coverage complies with the Section 125 nondiscrimination requirements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

IRC Section 416(i) Employees not to be counted in the plan’s compliance of requirements

A
  • less than three years of service
  • part-time and seasonal
  • employees excluded because they are covered by a collective bargaining agreement and group term life was the subject of good-faith bargaining
  • certain nonresident aliens
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Accidental Death and Dismemberment (AD&D Policies) Definition

A

provide a lump-sum benefit for loss of life or body parts due to an accident. May be included in a group life insurance policy or in a group health policy. Often the benefit is a percentage of group term life coverage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Two types of AD&D Policies

A

Business Travel Insurance - provides specified classes of employees only while they are traveling for business purposes
Voluntary Accident Insurance - covers accidents related to any activity, either personal or business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Group Ordinary or Paid Up Policy

A

A policy that includes “permanent benefits” (provides an economic value that extends beyond one policy year). The permanent portion of total coverage grows as the employee approaches retirement. At retirement, the policy can be converted to an individual policy at a more reasonable cost than if it had been a pure term policy converted at the same age.
- Dividends on a permanent group policy may be taxable to the employee depending on how much the employee puts towards buying the insurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Group Ordinary or Paid Up Requirements

A

TERM REQUIREMENTS PLUS:

  • the amount of the death benefit considered part of the group term plan mus be specified in writing by the employer or stated in the policy
  • the amount of the death benefit designated as group term must comply with a formula in the regulations.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Group Paid-Up

A

Employee makes an after-tax contribution that is allocated to purchase whole life insurance. The employer purchases sufficient group term life insurance to provide the scheduled total amount of insurance coverage to the employee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Group Ordinary

A
  • Section 79 plan offers employees the opportunity to participate in ordinary whole life insurance funded by employee and employer contributions. There plans are not common because of earlier abuses, the permanent portion needs to be entirely supported by the employee.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Group Universal

A

GULP, premiums usually employee paid. The only underwriting requirement is that the employee be actively at work. An important advantage of the GULP plan is the portability provided, the insurance is usually transferrable and the employee can continue to pay premiums to the insurance company, although the premium may change.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Supplemental Insurance Coverages

A

Group Survivor Income
Dependents’s Group Life
Supplemental Group Term Life
Group Carve Out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Group Survivor Income

A
  • no lump sum payment option
  • spouse and children beneficiaries only
  • benefits will be paid only if there is an eligible survivor
  • not considered life insurance
  • monthly payment schedule for given number of years
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Dependents’ Group Life

A

Employers can offer group life insurance coverage for the spouse and any children up to age 26.

  • coverage cannot exceed 50% of the insurance for the employee
  • if the coverage ends for any dependent of a covered employee, the dependent has the option to convert to an individual policy without evidence of insurability
  • Coverage amount. limited to $2,000
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Supplemental Group Term Life

A

Such coverage cannot be offered to just a few individuals, but it can be provided to a class of employees, such as salaried employees. But the members can choose to participate to buy more group term life insurance. Often, the insurance company will require evidence of insurability, since there is a greater risk of adverse selection. Paid for after-tax by the employee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Group Carve Out

A
  • discriminatory benefits
    The employer can make enhanced benefits available to a group of executives by providing them with $50k of group term coverage and carve out the executives from the group life term insurance for any amount over $50k. This excess coverage is commonly provided by permanent insurance.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Tax-Free Death Benefits

A

Death Benefits paid to beneficiaries are not subject to income tax, note that a group survivor income policy may not be considered life insurance because of it’s conditions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Tax Consequences of Group Term Insurance

A

An employer can provide up to $50k of group term life insurance coverage on the life of an employee without tax consequences to the employee if the group term coverage meets the requirements of IRA Section 79. The cost of anything in excess of that is taxable to the employee, based on the cost per thousand each month. Dependent coverage in excess of $2k is fully taxable to the employee.
- entire premium is deductible for the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

When is it nontaxable income to the employee above $50k?

A
  • disable or retired, under certain conditions
  • individuals who have designated the employer or a charitable organization as beneficiary.
  • the economic benefits of the full amount of insurance coverage is taxable if the insurance is provided under a qualified plan
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Retired Lives Reserve

A

a plan that prefunds the cost of post-retirement group life insurance coverage.

  • may be either an insurance companies separate account or a trust account providing group term life for retired employees.
  • Non taxable to the preretirement employee, upon retirement the employee is taxed on the cost of coverage
  • employer can deduct contributions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Tax Consequences of Permanent Insurance

A
  • The cost of employer-provided perm life insurance is reportable income
  • Dividends from permanent insurance may be taxable to employee depending on who is contributing to the coverage
  • Deductible to employer if employee is being taxed on it
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Key Employee Taxes on Group Life

A

If the key employee is being discriminated for in the group life policy then he will have the entire premium on his gross income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

ACA Highlights

A
  • Immediate access to insurance for uninsured individuals with pre-existing conditions
  • Eliminating pre-existing condition exclusions
  • Rescissions prohibited
  • Eliminating Annual and Lifetime Limits
  • Preventive Health Care Coverage
  • Increased age for coverage of young adults
  • Discounts in the Part D “donut hole”
  • Increased additional tax for nonqualified medical expenses
  • FSA contribution limit deduction
  • Additional Hospital Insurance for High-Wage Workers
  • Additional tax on net investment income for high-wage workers
  • Mandatory Employer Coverage
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

ACA - “Increased additional tax for nonqualified medical expenses”

A
  • Applying to HSAs and MSAs, the penalty for withdrawals prior to age 65 for nonqualified medical expenses increases to 20%.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

ACA - “Additional Hospital Insurance (HI) for high-wage workers”

A

The HI (medicare tax) will increase by .9% on single earning over $200k and married earning of $250k

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

ACA - “additional tax on net investment income for high-wage workers”

A

A new 3.8% tax will be levied on the net investment income of high-wage workers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

ACA - “Mandatory employer coverage”

A

Employers with 50 or more employees must offer coverage to their employees or be subject to fines.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Group Health Insurance Providers

A
  • an insurance company, HMO or a self-funded plan
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Group Health Insurance Premiums

A
  • employees may be required to contribute some portion of the premium cost for the coverage
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Group Health Insurance Rates

A
  • risk is presented by the characteristics of the group and the plan as a whole. Once the group plan is in force, premiums are based on the experience of the group and can change at each renewal.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Comprehensive Expense Plan Benefits

A

diagnostics, medical, hospital, and surgical services.

  • Deductible then coinsurance
  • MOOP
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Small-Business Health Care Tax Credit Requirements

A
  • No more than 25 full-time employees (2 half-time = 1 full-time)
  • Pay an average wage of less than $50k per year
  • Self-employed ind, 2% shareholders of an S Corporation and 5% owners of the employer are not treated as employees
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Small-Business Health Care Tax Credit

A

A credit of up to 35% of the cost is available against the employers regular tax and its AMT liability.
- Works on a sliding scale with the maximum amount of 35% going to a company with 10 or fewer FT employees

42
Q

Dental Expense Insurance

A
  • Similar to medical expense coverage in the respect that is helps cover clearnings fillings, crowns, root canals and braces.
  • In order to get the highest reimbursement rate of the treatement, the insured must stay within the PPO network.
43
Q

Vision Care Plans

A

Group health insurance does not usually cover routine eye care and vision correction. So you would need to buy a vision care plan.

44
Q

Group LTC

A
  • Coverage is often extended to other family members, such as in-laws or parents.
  • Even after the employee’s termination or retirement, the LTC coverage may be continued on a direct-pay basis by the employee at group rates without employer contributions towards premiums.
  • Premiums are tax deductible to employer and not taxable income to the employee
45
Q

Fully Insured Health Care Plan

A

The employer pays premiums to the insurance company, and the insurance company, in turn, administers the policy and is responsible for claims procedures and payments.

46
Q

“Self-Insured” or Self -Funded Health Insurance Plan

A

An employer may assume the responsibility for funding claims and administering its benefit program.

  • Stop-Loss provisions (paying for insurance above a certain amount, such as $100,000) are typically a part of self-funded plans.
  • ERISA exempts these plans from state regulation and places them under the jurisdiction of the federal Department of Labor.
47
Q

Exempt-Erisa Plans Appeal

A
  • plans do not have to include benefits mandated by specific states
  • Saves on what an insurance carrier charges for the risk it assumes, and it saves on state premium tax
  • The combined savings may approach 5% when comparing the cost of a self-funded plan with a fully insured plan.
48
Q

Types of Stop-Loss Coverage

A
  • Typically companies have both
    1. Specific Stop Loss - pertains to a specific individual participant and limits the plan’s liability for any individual’s health care costs.
    2. Aggregate Stop Loss - pertains to the entire group and normally is not calculated until the end of the plan year.
    3. Minimum Premium Plan - limits an employers potential liability on a monthly basis.
49
Q

Cafeteria Plan

A

Allows employees to participate only in those benefits they find useful.

50
Q

Section 125 requires a cafteria plan to offer

A
  1. a cash benefit that is generally taxable to the employee as compensation, and
  2. one or more qualified benefits that are not taxable to the employee
51
Q

Cafeteria Plan “Two Level Structure”

A

Large companies use this “two level structure” where all employees receive a core of basic benefits and then can choose from a group of additional benefits.

52
Q

Cafeteria Plan Prohibitions

A
  • educational assistance programs
  • LTC insurance
  • Employee Discounts
  • noncash fringe benefits
  • commuter benefits
53
Q

Flexible Spending Arrangements (FSA’s)

A

A cafeteria plan funded only with employee salary redirections. Employee commits to allocating a dollar amount of salary reduction for the coming year to a specific benefit or a specified period (“use it or lose it”). With a grace period of 2.5 months. $500 carryover. Cannot allow both grace period AND carryover privileges.

54
Q

FSA Tax Implications

A

FSA deferrals are not only free of any income taxes but are also free of any payroll FICA taxes. An FSA is a cafeteria plan consisting of various tax-free benefits funded through employee salary reductions.

55
Q

FSA Claims

A

Even if the amount requested for the claim is more than is currently in the FSA but less than what is forecasted to be in the FSA (when taking into account the projected contributions), the employer is on the hook fo the claim.

56
Q

Maximum FSA Plan Benefits

A

Dependent Care - $5000 annually

Unreimbursed medical Expenses - $2750

57
Q

Health Savings Accounts (HSA’s)

A

A tax-exempt trust or custodial account established with a qualified HSA trustee or custodian.

58
Q

HSA Contributions

A

Contributions made by an employer to an HSA, including contributions made through a cafeteria plan, are treated as tax-free employer provided health coverage for medical expenses.
- Employer contributions must be comparable (in the same amount or the same percentage of the deductible) otherwise they are subject to a 35% excise tax on the total amount contributed.

59
Q

HSA Eligibility

A
  • High-deductible health plan
  • not be covered by any other non-HDHP
  • not be covered by medicare
  • not be claimed as a dependent on another person’s tax filing and,
  • not have any other health coverage
60
Q

HSA Taxability

A
  • If the employer contributes to the HSA on behalf of the employee, the contribution is not taxable to the employee.
  • Employee contributions provide an above-the-line deduction
  • If the withdrawals are for an other-than-qualified medical expense, ordinary income tax applies PLUS a 20% additional tax
61
Q

Above-the-line deduction

A

allows the participant to reduce taxable income by the amount contributed to the HSA - the participant need not itemize deductions to achieve this result.

62
Q

Health Reimbursement Arrangements (HRA’s)

A

Entirely funded by the employer. The HRA reimburses employees for their substantiated medical expenses (or those of their dependents) up to the limit of the plan. Any unused amounts are carried forward to the following year.

63
Q

HRA Eligibility

A

not available for self-employed individuals, partners, or 2% shareholders in an S Corporation.
- not offered within a cafeteria plan but may be in addition to the plan.

64
Q

HRA Taxability

A

Reimbursement for medical expenses from the plan to the employee are excludible from the employee’s income and deductible by the employer.

65
Q

Nonprescription Medicines

A

Due to the ACA, they are no longer eligible for reimbursement under health FSAs, HRAs or HSAs unless a physician issues a prescription for over-the-counter medicine or drug

66
Q

Voluntary Employees’ Beneficiary Associations (VEBAs)

A

Employers can prefund a trust for nonretirement benefits and take an immediate tax deduction.
- A VEBA may be sponsored by a single employer or by 10 or more employers. This multiple employer trust is a fund through which employers can prefud employee benefits and receive favorable tax treatment. To qualify for this immediate benefit, the VEBA trust must include at least 10 participating employers.

67
Q

VEBA/Welfare Benefit Trust Taxability

A

Multiple employer trusts/single employer trusts that comply with nondiscrimination are exempt from income tax on earnings, while welfare benefit trusts earnings are fully taxable to the employer.
- Benefits paid to employees from a VEBA are subject to the same tax treatment as benefits paid from the corresponding individual plans. and employees are not taxed when contributions are made to the plan.

68
Q

VEBA Benefits

A

life, sickness, accident, or “other” which could be vacation, child care facilities, legal services, severance pay, education and job training, and supplemental unemployment compensation.
- MAY NOT offer retirement benefits, commuting benefits, or miscellaneous fringe benefits.

69
Q

VEBA Requirements

A

Must meet nondiscrimination, qualified benefit, and administration requirements. Membership is voluntary and the members control the association. Nonemployee (retired) members may not represent more than 10% of the total membership.

70
Q

Group Health ERISA Requirements

A
  • Fiduciary Duty
  • Requires that certain information regarding the plan be made available to the plan participants, their beneficiaries, the DOL, and the IRA.
  • the only way a group plan would be fully exempt from ERISA is if it were a voluntary plan in which individual employees pay the full premium and the employer’s role is limited to administrative functions.
71
Q

ERISA Information Requirements (Group Insurance Plans)

A
  • summary of plan description
  • summary of material modifications that detail changes in any plan description
  • an annual return or report
  • a summary annual report
  • any terminal report
72
Q

HIPPA Pre-Existing Conditions

A

Hippa provided there could not be enforcement of a pre-existing medical condition clause if:

  1. an employee was covered by the prior employers health insurance plan for at least 12 months
  2. fewer than 63 days have elapsed since the loss of coverage under th prior employer’s plan
73
Q

Group Health Care Tax Implications

A

Premiums paid by the employer are deductible as long as the benefits are payable to the employee and the premiums can be considered

74
Q

Sick-Pay Plans

A

continuations of compensation for short periods. Benefit is received as compensation subject to all payroll withholding and tax requirements.

75
Q

Short-Term Disability

A

Provides income replacement beyond the period of time allowed for sick-pay benefits; this coverage is provided through an insurance company plan.

76
Q

STDI Elimination Period

A
  • benefits start after elimination period of one week of being totally disabled due to sickness. If disability is due to an accident, benefits usually begin on the first day. However, if sick pay applies, the disability will not begin until sick pay is exhausted.
77
Q

Long-Term Disability

A

First two years it’s own occupation and after that it’s defined as the inability to perform any occupation for which the disabled worker’s education, training, or experience might have prepared for them. “Modified Own Occupation”.

78
Q

LTDI Elimination Period

A

usually 60-180 days

79
Q

LTDI Benefits

A
  • typically 50-70% of compensation and continue through the period of disability until the worker is 65 and then benefits grade to age 70.
80
Q

Taxation of Group Disability Benefits

A

When employer pays premiums - employer deducts premiums as business expense if the premiums qualify as additional compensation and if the benefits re payable to the employee or their beneficiary. The benefits are includible in the employees taxable income, and if the employee contributed to the plan, the corresponding portion of the benefits is excludible from income.

81
Q

Disability Insurance Discrimination Requirements

A
  • Group plans funded through an insurance company are not required to meet discrimination test
  • Self-Insured or Self-Funded Plans are required to meet eligibility and benefits test to establish a nondiscriminatory status
82
Q

Disability Insurance Discrimination Test

A

All benefits:

  • At least 70% of all employees,
  • 80% of eligible employees, if at least 70% of employees are eligible, or
  • a class of employees that is considered non discriminatory
83
Q

Disability Insurance Benefits Test

A
  • Benefits provided to Highly Compensated Employees must be equally available to other participants and cannot vary with compensation levels, age, or years of service.
84
Q

“Other Employee Benefits”

A
  • Noncash Fringe Benefits
85
Q

Noncash Fringe Benefits taxable to employee

A
  • personal use of a company airplane or car, or company lodging
  • No-additional-cost services and qualified employee discounts to highly paid employees if such discounts are not available to rank-and-file employees
  • Country club dues paid on behalf of an employee
  • Season tickets to a theatrical or sporting event furnished by the employer
86
Q

Noncash Fringe Benefits NOT taxable to employee

A
  1. No-additional-cost services
  2. Qualified employee discounts
  3. De minimis fringe benefits
87
Q

No-additional-cost services

A

free services provided to employees by the employer at little or no cost to the employer. Must meet requirements:

  1. the employer cannot incur substantial cost or suffer losses in providing benefit
  2. Employees receiving the benefits must work in the business the provides the same service to paying customers
  3. Nondiscriminatory
  4. Working Condition Fringe Benefits
  5. Transportation finge benefits with a cash option
  6. Athletic Facilities
  7. Meals and lodging
88
Q

Qualified Employee Discounts

A

Discounts on (1) Goods not in excess of the selling price multiplied by the employers gross profit percentage and (2) services, not to exceed 20%. Not included in income if:

  • the discount is available to all employees
  • if discount does not exceed the employers gross profit percentage for goods sold or 20% of the service price
  • the discounted items are offered to customers of the employer in the ordinary course of busines
89
Q

De minimis fringe benefits

A

benefits that are so small that accounting would be impractical or unreasonable. Excluded and deductible if:
- annual revenue from the facility equals or exceeds the facility’s direct operating cost.
- company owns or leases the facility
- company operates the facility;
the facility is on or near the business premises; and
- the company provides meals during, before or after the employees workday

90
Q

Working condition fringe benefits

A
  • non subject to nondiscrimination requirements. These services must be business related and substantiated.
91
Q

Transportation Fringe Benefits with a cash options

A
  • non subject to nondiscrimination requirements. If cash if chosed, it’s ordinary income, if the noncash transportation benefit is chosen it is excludible from income for tax purposes. no longer deductible
92
Q

Athletic Facilities

A

Discrimination is allowed however no deduction is allowed if facilit is only for officers, owners or HCE’s

93
Q

Meals and Lodging

A

Employer may discriminate

94
Q

Workers Compensation

A
  • Under the rules of workers comp, the employer is deemed liable for injuries suffered by an employee. It does not matter who’s at fault
95
Q

Five General Principles for Workers Compensation

A
  1. Negligence is not a factor in determining liability
  2. Indemnity is partial but final
  3. Periodic payments are usually made
  4. Cost of program is made a cost of production
  5. Insurance is Required
96
Q

Workers Comp Benefits

A
  1. Medical Expenses
  2. Total Temporary Disability
  3. Partial Temporary Disability
  4. Total Permanent Disability
  5. Parital Permanent Disability
  6. Survivors Death benefits
  7. Rehab Benefits
97
Q

Workers Comp Taxation

A

Excluded from the recipients income. Considered medical payments.

98
Q

Unemployment Insurance Eligibility Requirements

A
  1. “Covered Employment” - the worker must have been covered and had unemployment insurance taxes paid on their behalf.
  2. Minimum income earned
  3. Continued Attachment - must be willing to work
  4. Unemployment must be involuntary
99
Q

Unemployment Benefits

A
  • approx. 50% of normal full-time earnings subject to a maximum benefits
  • paid for 26 weeks
  • subject to income taxes
100
Q

Prepaid Legal Services

A

fringe benefits that makes legal services available to employees. Employer pays cost and deducts expenses

101
Q

Miscellaneous Employee Benefits

A
  1. Educational Benefit Trust - employer contributions deductible and are included in employee income when no longer at a SRF
  2. Contractual Death Benefit - taxed as compensation
  3. Voluntary Death Benefit - Taxable if characterized as additional compensation but non taxable if characterized as a gift to the widow.
102
Q

Key Employee Life Insurance

A

Business insurance for a Key Employee to replace that key employee if something were to happen to them.

CFP Course 2 Flashcard Kaplan (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions