Social Security and Medicare Overview

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Questions and Answers

Which of the following entities contributes to the Social Security system?

Only employers

Only self-employed individuals

Both employees and employers (correct)

Only employees

What is the percentage of FICA tax deducted from an employee's paycheck for Social Security?

10%

6.2% (correct)

12.4%

How many credits are typically needed for most people to qualify for Social Security benefits?

60 credits

50 credits

30 credits

40 credits (correct)

What is the maximum amount of earnings for which Social Security tax can apply in 2024?

$168,600 Signup and view all the answers

How many credits can an individual earn in one year toward Social Security eligibility?

4 credits Signup and view all the answers

What is one eligibility requirement for Medicare?

Must be 65 years old or older Signup and view all the answers

How is Medicare funding primarily collected from employees?

1.45% tax on all wages Signup and view all the answers

Which part of Medicare requires a premium payment?

Part B Signup and view all the answers

What is the role of the Pension Benefit Guaranty Corporation (PBGC)?

To guarantee payment of private pension plan benefits Signup and view all the answers

What is the maximum total contribution percentage for a self-employed individual towards Medicare?

15.3% Signup and view all the answers

Which statement is true regarding Medicaid eligibility?

Generally for low-income individuals below the poverty line Signup and view all the answers

Under the Employee Retirement Income Security Act (ERISA), what is a common rule regarding employer contributions to retirement plans?

Vesting occurs after five years Signup and view all the answers

What is a notable characteristic of Medicare Part C?

Allows services through a provider organization Signup and view all the answers

What is true regarding employers and private retirement plans?

If established, plans must comply with ERISA standards Signup and view all the answers

What constitutes the contribution rate for an employee towards Social Security and Medicare combined?

7.65% Signup and view all the answers

Which of the following statements about the Employee Polygraph Protection Act (EPPA) is true?

The EPPA prohibits lie detector tests for most private employers, except those in limited sectors. Signup and view all the answers

What does the Electronic Communications Privacy Act (ECPA) generally protect?

It prohibits interception and disclosure of communications without employee consent. Signup and view all the answers

Under HIPAA, employers are required to implement which of the following?

Procedures to protect the privacy and security of employees' health information. Signup and view all the answers

Which of the following conditions allows employers to conduct drug testing?

Public employers can only conduct drug testing under federal legal restrictions. Signup and view all the answers

Which factor is NOT a requirement for unemployment insurance eligibility?

Must have been employed for a minimum of five years prior to application. Signup and view all the answers

What does the term 'reasonable expectation of privacy' refer to in an employment context?

There is a balance between the employer's interest in monitoring and the employee's privacy expectations. Signup and view all the answers

How long can employees continue their health care coverage under COBRA after losing their job?

Up to 18 months. Signup and view all the answers

Which of the following is true regarding employee surveillance practices?

A majority of employers admit to conducting some form of employee surveillance. Signup and view all the answers

What is a consequence for an employer under HIPAA for failing to comply?

Fines can be up to $25,000 per year for civil infractions. Signup and view all the answers

What must an employer do before monitoring communications through devices provided for business use?

Inform employees that monitoring will occur. Signup and view all the answers

Which of the following is an exception to the prohibition of lie detector tests under the EPPA?

Security firms. Signup and view all the answers

What is required for employees to claim unemployment benefits after job loss?

Remain willing and able to search for work. Signup and view all the answers

What does COBRA stand for in terms of health care coverage?

Consolidated Omnibus Budget Reconciliation Act. Signup and view all the answers

Under what conditions can employers conduct random drug testing?

It is allowed if justified by state law. Signup and view all the answers

Study Notes

A federal program providing retirement, survivor, and disability benefits.
Eligibility for benefits: Yong and Fickle Corp both contribute to the social security system. Yong must be employed and have contributed by the time they turn 67
Funding: FICA (Federal Insurance Contributions Act) requires mandatory contributions from both employees and employers. Self-employed individuals also contribute.
Employee contribution: 6.2% of paycheck.
Employer contribution: Matches the employee contribution.
Maximum taxable earnings cap: $168,600 (for 2024).
Wage base: The cap above on earnings for one year.

Medicare

A federal health insurance program.
Eligibility: Age 65 or older, or under 65 with certain disabilities.
Funding: Both employees and employers contribute. Self-employed individuals contribute 1.45% and 2.9%.

Funding and Eligibility Details Continued

Self-Employed contribution: 12.4% of earnings up to a wage base, this is split in two parts for administrative reasons.
Credit Requirements: Varies by benefit type and age, but most people need 40 credits to be eligible at 67 years old.
One credit is earned for every $1,730 in earnings (as of 2024).
Maximum credits per year is 4
Medicare eligibility: Need 40 credits and be 65 years old.

Additional Information

No cap on wages taxed for social security; however there is a maximum taxable earnings limit.
High-income earners pay additional tax on earnings over $200,000.
Employers do not pay additional tax for high-income earners.
Medicare is a federal health insurance program with both employer and employee contributions. There are separate wage base caps and contributions for the program.
Employment taxes are regulated by state and federal laws and regulations.

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Description

This quiz covers essential information about Social Security and Medicare, including eligibility, funding mechanisms, and contribution rates for employees and employers. It provides a comprehensive understanding of how these federal programs work and their significance for individuals aged 65 and older or those with disabilities.