RMIN Ch. 18

All of the following are reasons for social insurance programs EXCEPT
A) to solve complex social programs.
B) to provide a base of economic security.
C) to provide need-tested benefits to low-income individuals.
D) to provide coverage for perils which are difficult to insure privately.
C) to provide need-tested benefits to low-income individuals.
Which of the following statements about characteristics of social insurance programs is true?
A) Benefits are loosely related to a workers earnings
B) Benefits are paid primarily on the basis of individual equity
C) Participation in social insurance programs is voluntary
D) Social insurance programs must be fully funded at all times to pay required benefits
A) Benefits are loosely related to a workers earnings
All of the following statements about the characteristics of social insurance programs are true EXCEPT
A) They are designed to provide a floor of income with respect to the risks which are covered
B) The method of determining benefits is prescribed by law
C) Participants are required to satisfy a means test to receive benefits
D) With few exceptions, social insurance programs are compulsory
C) Participants are required to satisfy a means test to receive benefits
Which of the following statements about covered occupations under the Social Security program is true?
A) Employees of private firms are exempt from coverage if they are covered by private pension plans
B) Ministers are automatically covered unless they elect out of coverage because of conscience or religions principles
C) Self-employed person are covered only if their net annual earnings are 5,000 or less
D) Federal civilian employees hired after 1983 are covered for medicare only
B) Ministers are automatically covered unless they elect out of coverage because of conscience or religions principles
Which of the following statements about credits (quarters of coverage) under the Social Security program is true?
I: Up to 10 credits can be earned in a single
II: A worker receives one credit for each 10,000 of covered wages in a calendar year, regardless of the worker’s wages
A) I only
B) II only
C) both I and II
D) neither I nor II
D) neither I nor II
As of this year Brad, age 50, has 40 credits under the social security program. These credits were all earned in the last 10 years. What is Brad’s insured status under the program?
A) He is currently and fully insured
B) He is currently insured, but not fully insured
C) He is fully insured, but not currently insured
D) He is neither currently insured nor fully insured
A) He is currently and fully insured
Which of the following statements about the full retirement age under the Social Security program is true?
A) The current retirement age for full benefits is 62
B) Beginning in the year 2022, the retirement age will be gradually increase to 80
C) Early retirement with reduced benefits is allowed as early as age 55
D) Delayed retirement beyond the age for full benefits increases the amount of the monthly benefit
D) Delayed retirement beyond the age for full benefits increases the amount of the monthly benefit
All of the following persons are eligible for a benefit under the retirement portion of the Social Security program EXCEPT
A) a divorced spouse, age 55, who was married to a retired worker for 6 years
B) a retired worker’s 63 year old spouse who is no longer caring for children
C) a retired workers 52 year old spouse who is caring for a 12 year old daughter of the retired worker
D) a retired worker’s unmarried 20 years old son who has been severely disabled since an accident while in elementary school
A) a divorced spouse, age 55, who was married to a retired worker for 6 years
Which of the following statements about a worker’s primary insurance amount is (are) true?
I. It is the monthly amount paid to a worker who elects early retirement at 62
II. It is equal to 50 percent of the worker’s final average pay that was subject to Social Security taxes
A) I only
B) II only
C) both I and II
D) neither I or II
D) neither I or II
Which of the following statements about the Social Security cost of living adjustment is (are) true?
I. The amount of the adjustment is limited to a maximum of 2.5 percent annually
II. Increases are based on changes in the consumer price index
A) I only
B) II only
C) both I and II
D) neither I or II
B) II only
Which of the following statements is (are) true with respect to the Social Security earnings test?
I. The earnings test does not apply to dividends, interest, and rental income
II. The earnings test does not apply to work earnings for those individuals who have reached the full retirement age early under Social Security
A) I only
B) II only
C) both I and II
D) neither I or II
C) both I and II
All of the following persons are eligible for survivor benefits under social security EXCEPT
A) dependent parents 62 or older
B) unmarried children between the ages of 18 and 22 who are attending college
C) a surviving spouse 60 or older
D) a surviving spouse with eligible children younger than age 16
B) unmarried children between the ages of 18 and 22 who are attending college
Which of the following statements about disability benefits under SS is true?
A) There is a 1 year waiting period before benefits are payable
B) Benefits are payable as long as the disabled worker is unable to perform his or her regular occupation
C) Benefits are payable only if the condition causing the disability is expected to result in death prior to age 65
D) In addition to the disable worker receiving the benefits, benefits can also be paid to eligible dependents
D) In addition to the disable worker receiving the benefits, benefits can also be paid to eligible dependents
In addition to most persons over age 65, which of the following persons are eligible for Medicare benefits?
I. Persons under age 65 who have been entitled to SS disability benefits for at least 24 months
II. Persons under 65 who need long-term kidney dialysis treatment or a kidney transplant
A) I only
B) II only
C) both I and II
D) neither I or II
C) both I and II
Which of the following statements about the coverage of health care services under Part A of Medicare is true?
I. Services in the patient’s home are covered if the patient requires skilled care and meets certain conditions
II. Hospice care is only available for beneficiaries with a terminal illness
A) I only
B) II only
C) both I and II
D) neither I or II
C) both I and II
Which of the following statements about hospice benefits under the hospital insurance (Part A) portion of Medicare is true?
I. Hospice benefits are only payable while the beneficiary is hospitalized
II. Hospice benefits are provided to persons who are terminally ill.
A) I only
B) II only
C) both I and II
D) neither I or II
B) II only
Charges for all of the following medical expenses are covered under the medical insurance (Part B) portion of Medicare EXCEPT
A) physician’s services in doctors offices
B) hospital equipment and other durable medical equipment used at home
C) clinical laboratory services
D) prescription drugs outside of the hospital
D) prescription drugs outside of the hospital
Which of the following statements about the medial insurance (Part B) portion of Medicare is true?
I. Participation in Part B of Medicare is voluntary
II. It is provided at no cost to anyone insured under Medicare
A) I only
B) II only
C) both I and II
D) neither I or II
A) I only
Which of the following statements about the role of physicians with respect to Medicare claims is true?
I. Physicians who do not accept an assignment of Medicare claims can charge as much as 200 percent of the Medicare approved fee
II. Physicians who accept assignment agree to accept the Medicare approved amount as payment in full
A) I only
B) II only
C) both I and II
D) neither I or II
B) II only
Which of the following statements about Medigap policies is true?
I. Insurers are required to have an open enrollment period of 6 months from the date an applicant first enrolls in Medicare Part B and is age 65 or older
II. Most policies are of limited value because they largely duplicate benefits already provided by Medicare
A) I only
B) II only
C) both I and II
D) neither I or II
A) I only
Which of the following statements about the financing of the SS programs is true?
I. Although the self-employed pay an OASDI tax rate that is twice the employee rate, they are allowed certain deductions that reduce the effective tax rate
II. The earnings base on which OASDI taxes are paid increases annually based on changes in average wages in the national economy
A) I only
B) II only
C) both I and II
D) neither I or II
C) both I and II
Objectives of unemployment insurance include which of the following
I. To help unemployed workers find jobs
II. To encourage employers to stabilize employment
A) I only
B) II only
C) both I and II
D) neither I or II
C) both I and II
In order to receive unemployment insurance benefits, an unemployed worker must meet all of the following eligibility requirements EXCEPT
A) have qualifying wages and employment
B) be able to work
C) be actively seeking work
D) satisfy a 6 month waiting period
D) satisfy a 6 month waiting period
Which of the following statements about unemployment benefits is true?
A) Benefits are a flat amount regardless of a workers previous wages
B) Because of federal legislation, the maximum benefit is the same in all states
C) Most states pay regular benefits for a maximum duration of 26 weeks
D) Under the extended benefits program, the federal government continues benefit payments for up to 4 years for workers who have exhausted their regular benefits
C) Most states pay regular benefits for a maximum duration of 26 weeks
All of the following statements about the financing of unemployment insurance benefits are true EXCEPT
A) All contributions from a state are deposited in the state’s account in a federal trust fund from which benefits are paid
B) The tax rate for a given employer may be reduced if the employer has a favorable employment record
C) Part of an employer’s contribution is used for administrative expenses, to fund extended benefits, and to maintain a loan fund that can be drawn upon if the states account is depleted
D) Most state programs are financed primarily by payroll taxes paid by employees
D) Most state programs are financed primarily by payroll taxes paid by employees
Which of the following statements about the problems and issues of unemployment insurance programs is true?
I. Many state programs are inadequately financed
II. Only a small portion of the total unemployed receive benefits at any time
A) I only
B) II only
C) both I and II
D) neither I or II
C) both I and II
Prior to the establishment of workers compensation laws, an employer could use all of the following defenses to block an injured workers claim for benefits EXCEPT
A) the contributory negligence doctrine
B) the fellow servant doctrine
C) the employer liability doctrine
D) the assumption of risk doctrine
C) the employer liability doctrine
All of the following statements about workers compensation programs are true EXCEPT
A) They are based on the principle of liability without fault
B)Disabled workers are paid for their injuries based on a schedule of benefits established by law
C) Options available for complying with the law may include one or more of the following: self insurance, private insurance, or insurance through a state insurance fund
D) Most states have elective laws whereby the employer can choose whether or not to provide workers compensation coverage to employees
D) Most states have elective laws whereby the employer can choose whether or not to provide workers compensation coverage to employees
All of the following statements about benefits under workers compensation programs are true EXCEPT
A) Disability income benefits are usually paid retroactively to the date of injury if the worker is still disable after satisfying a waiting period
B) Death benefits and benefits to eligible survivors are payable if a worker is killed on the job
C) Medical benefits are usually subject to substantial deductibles, coinsurance, and numerous exclusions
D) Rehabilitation benefits are available to restore disabled workers to productive employment
C) Medical benefits are usually subject to substantial deductibles, coinsurance, and numerous exclusions
Current problems and issues with workers compensation include all of the following EXCEPT
A) involvement of lawyers in workers compensation claims
B) Insuring catastrophic loss exposures
C) reduced benefits for occupational illness
D) rising medical costs
C) reduced benefits for occupational illness
Which of the following statements about problems and issues in workers compensation insurance is true?
I. The cost of medical care under workers compensation continues to rise
II. Enactment of workers compensation statutes has eliminated litigation with respect to work-related illnesses and injuries
A) I only
B) II only
C) both I and II
D) neither I or II
A) I only
Marion owns substantial financial assets. She was surprised that she qualified for SS retirement benefits when she retired because of her high investment income. What characteristic of social insurance programs is Marion overlooking with respect to her SS retirement benefits?
A) Social insurance programs are financially self-supporting
B) Social insurance program benefits are loosely related to earnings
C) Social insurance benefits are not means tested
D) Full funding of social insurance programs is unnecessary
C) Social insurance benefits are not means tested
Tony is 48 years old. He earned the maximum taxable wage base under SS annually between the time when he was 26 and when he was 40. At age 40, he dropped out of the workforce to care for children as his wife had a high paying job. Which statement is true regarding Tony’s insured status under SS?
A) Tony is fully insured and currently insured
B) Tony is fully insured, but not currently insured
C) Tony is currently insured, but not fully insured
D) Tony is neither fully nor currently insured
B) Tony is fully insured, but not currently insured
Frank is doing some life insurance planning. A financial advisor said, “be sure to consider SS when examining sources of funds available for family support if you die.” The financial advisor was referring to which SS benefit?
A) retirement benefits
B) survivor benefits
C) disability benefits
D) health insurance benefits
B) survivor benefits
All of the following statements about Medicare are true EXCEPT
A) While SS old-age benefits are available at age 62, Medicare Part A benefits are not available, in most cases until age 65
B) Medicare covers disabled persons younger than age 65 who have been entitled to SS disability benefits for at least 24 months
C) An individual who does begin to receive SS old age benefits until age 67 is not eligible for Medicare benefits until age 67
D) Beneficiaries must pay a monthly premium for Medicare Part B coverage
C) An individual who does begin to receive SS old age benefits until age 67 is not eligible for Medicare benefits until age 67
Which of the following statements is true with respect to the Medicare Advantage Plans?
I. These plans replace the original Medicare program, Parts A and B, which are no longer available to new retirees.
II. These plans provide an opportunity for retirees to receive Medicare coverage through private health care plans
A) I only
B) II only
C) both I and II
D) neither I or II
B) II only
Dale, age 65, was dismayed to learn about all of the deductibles, co-pays, limits, and exclusions in the Medicare program. Dale bought a type of health insurance specifically designed to supplement Medicare, and selected his coverage from among 12 standard policies that private insurers offer. What type of health insurance did Dale purchase?
A) long-term care insurance
B) Medigap insurance
C) major medical insurance
D) viatical insurance
B) Medigap insurance
EFG Company suffered reduced demand for its products during a recession. EFG managers were considering laying off some workers when the personnel director said “Lets not lay off workers. If we do, our unemployment insurance premiums will increase. The state considers employment stability when determining our premium.” Considering the firms’ employment record when determining the rate to charge for unemployment insurance is called
A) experience rating
B) class rating
C) schedule rating
D) retrospective rating
A) experience rating
Beth was injured at work and is eligible to receive workers compensation benefits. All of the following benefits are provided under workers compensation EXCEPT
A) disability income
B) retirement benefits
C) rehabilitation
D) medical care
B) retirement benefits
Marco, a risk manager in California, is interviewing for a new position in the state of Washington. When Marco asked about methods of providing workers compensation, the answer surprised him. In Washington, employers can self-insure the risk or obtain coverage through a state fund. Private insurers do not market workers compensation insurance in Washington. Washington uses a
A) competitive state fund
B) guaranty fund
C) reinsurance facility
D) monopoly state fun
D) monopoly state fun
Which of the following statements about the financing of OASDI and Medicare is true?
I. There is a maximum taxable wage base for OASDI
II. There is a maximum taxable wage base for Part A of Medicare
A) I only
B) II only
C) both I and II
D) neither I nor II
A) I only
Which of the following statements about the taxation of SS retirement benefits is true?
I. SS retirement benefits are never considered taxable income
II. Up to 85 percent of SS benefits may be considered taxable income, depending on the amount of other income received by the beneficiary.
A) I only
B) II only
C) both I and II
D) neither I nor II
B) II only
All of the following are options for reducing the long-range OASDI actuarial deficit EXCEPT
A) increasing the payroll tax
B) reducing benefits
C) reducing the taxable wage base
D) using general revenues to fund benefits
C) reducing the taxable wage base
Which of the following statements about the Medicare prescription drug benefit is true?
I. Beneficiaries select a prescription drug plan and pay monthly premiums, with the premium reduced or waived for low income beneficiaries
II. The benefit provides first dollar coverage of prescription drugs up to a max of 10,000 per year, but no coverage after 10,000.
A) I only
B) II only
C) both I and II
D) neither I nor II
A) I only
All of the following statements about the Medicare Prescription Drug Plan are true EXCEPT
A) Medicare prescription drug coverage is available to all Medicare beneficiaries
B) Medicare prescription drug coverage is funded exclusively through Part a payroll tax
C) Private firms administer the program on a regional basis
D) In addition to initial deductible, there is a coverage gap where the beneficiary must pay the entire cost of prescription drugs
B) Medicare prescription drug coverage is funded exclusively through Part a payroll tax
All of the following statements about the Medicare prescription drug benefit are true EXCEPT
A) Beneficiaries are required to pay a monthly premium for the benefit
B) The plan provides protection against catastrophic prescription drug expenditures
C) The plan requires a $20 deductible for each prescription which is filled
D) The plan has a coverage gap before a beneficiary has coverage for catastrophic costs
C) The plan requires a $20 deductible for each prescription which is filled
Under one type of Medicare Advantage Plan, members of the plan can see any doctor or health services provider that accepts medicare patients. if members receive care outside the network of member physicians and care facilities, they must pay higher out of pocket costs. This type of Medicare Advantage Plan is a
A) Medicare HMO
B) Medicare PPO
C) Medicare Special Needs Plan
D) Medicare Private fee for Service plan
B) Medicare PPO
Which of the following statements concerning Medicare Prescription Drug Plans is (are) true?
I. The monthly premium is based on the health status of the beneficiary and the number of prescriptions the beneficiary needs
II. After the beneficiary has paid an initial deductible, Medicare pays the entire cost of all prescription drugs the beneficiary needs.
A) I only
B) II only
C) both I and II
D) neither I nor II
D) neither I nor II
Under Part A of Medicare, how is reimbursement for inpatient hospital care determined?
A) The amount billed to Medicare by the hospital is the amount Medicare pays
B) Eighty percent of the hospital’s regular charge for care is paid
C) The hospitals usual, reasonable, and customary charge is paid
D) Hospital care is classified into diagnosis-related groups (DRGs) and the amount reimbursed depends on the DRG classification of the care delivered
D) Hospital care is classified into diagnosis-related groups (DRGs) and the amount reimbursed depends on the DRG classification of the care delivered
Which of the following statements about the financial status of Medicare Part A is true?
I. Part A has serious financial problems
II. Reforms instituted by Congress have reduced Part A expenditures in recent years
A) I only
B) II only
C) both I and II
D) neither I nor II
A) I only
All of the following changes would reduce long-range defecit for the SS program EXCEPT
A) increase the OASDI taxable wage base
B) delay scheduled increases in full retirement age
C) make all OASDI benefits fully taxable
D) use general revenues of the federal government to help pay benefits
B) delay scheduled increases in full retirement age