Compensation Chapter 11

3 programs to relieve social problems caused by the Great Depression

1. Unemployment Insurance
2. Old Age, Survivor, & Disability Insurance (OASDI)
3. Medicare

Eligibility Criterial for Unemployment Insurance Benefits:

*not have left job voluntarily
*be able & available for work
*actively seeking work
*has not refused suitable work
*not be unemployed due to labor dispute
*not fired for gross work violations
*must have been employed for a minimum period of time (base period); usually 4 of the last 5 quarters
*must have had a minimum income (sufficient previous earnings) during last 4 quarters [this may omit part-time workers from being able to collect]

States pay into Federal Unemployment Trust Fund administered by Treasury Department

States receive money from federal & state taxes levied on employers (FUTA-Federal Unemployment Trust Fund)

***Companies must be careful in how many employees they lay off that file for unemployment--> affects the Experience Rating System which influences the portions of salaries that can be taxed; higher Experience rating means more people filing for unemployment insurance= tax burden on company is higher

Average Duration of unemployment benefits about 26 weeks; economic recession led to: Emergency Unemployment Insurance Program (EUC)
*approved June 2008; provided 13 additional weeks of federally funded unemployment to those who had exhausted state unemployment benefits

*November 2008 that initial 13 extended to 20 total additional federally funded weeks (13+7additional=20); with possibly another 13 weeks for those in states with high unemployment rates (20 initial + (13+7) +13=59)

Enacted 1935 for retirement; survivors benefits added 1939, disability insurance added 1965

EXEMPTIONS: 4 classes of workers are exempt
1. Civilian employees of federal government
2. Railroad employees with at least 10 years of service
3. State & Local government workers
4. Children: under 21, if working for a parent except children 18 +, working for family business

Requirements to be fully insured:

* Earn 40 quarters of credit (10 years of employment)
* Be age 62 to receive partial benefits
*Be age 65 to receive full benefits--> this is increasing due to longevity of life & by 2022 will have to be age 67 to receive full benefits

Paid to family/relatives of deceased worker

based on eligibility status & relationship (calculated based on insureds’ employment status and survivors relationship to deceased)

*As of June 2013: avg. monthly benefit $1,269

Paid to seriously disabled workers & family members
Varies according to age & disability

Eligibility:
1. worker was fully insured
2. worker meets social security work requirements
3. disability must last 1 year or be terminal

-serves US citizens 65 or older
-5 parts: A, B, Medigap, C, D
Provides insurance coverage for:

1. Hospitalization
2. Convalescent care
3. Major doctor bills
4. Prescription drug costs

Part A-->Hospital Insurance: covers inpatient & outpatient hospital care & services

Part B-->voluntary supplementary Medical Insurance (paid for at a similar rate as to what you would have as an employee; helps pay for doctors’ services, outpatient care, lab services, some preventative health services
*coverage in part A automatically qualifies for enrollment in part B (for a monthly premium)

Part D-->Prescription Drug Benefit: covers 75% costs after deductible of $195 paid, up to total of $2700

1. At $4350 Medicare covers 95% cost of prescriptions
2. Difference between $2700 - $4350: Donut Hole, all costs out of pocket

Funded through contributions from employers and employees:
7.65% comes from employers & employees (6.2 OASDI, 1.45 Medicare)

FICA (federal insurance contributions act) requires employers pay tax based on their payroll

employees contribute tax based on their earnings which is withheld from paychecks

Enacted in 1911
Insurance you receive for injury sustained on the job

Run by State; each state has own guidelines under Federal parameters

*Employer liable regardless of fault

*Covers all employees in US, except domestic workers, some agriculture workers, and small business with less than 12 regular employees

*Participation is compulsory in all states, except Texas where employers are not required to provide it

Provide Income & Medical Benefits

Reduce Litigation

Eliminate Legal Fees & Time spent in Courts

Relieve charities' of financialdrain

Encourage Employer interest in safety & accident studies to prevent injury

Established by National Commission on State Workmen’s Compensation Laws (NCSWCL) to ensure prompt & just remedy for workers injured on job:
Programs must:

Take Initiative in Administration

Review performance of program & adjust as needed

Inform workers of Rights & Insure payment of Benefits

Inform Employers & Insurance carriers (providers) of their rights & obligations

Resolve Disputes

Adjudicate unresolved claims

Provides job protection to employees in cases of family or medical emergency

Applies to companies with 50 or more workers

Guaranteed leave & the right of the employee to return to either the same position or to an equivalent position in terms of seniority, health insurance coverage, retirement benefits, pay

Eligible Worker:
*Employed by private employer or civilian unit of federal government
*Been employed for at least 12 moths by a given employer
*Provided at least 1250 hrs of service during 12 months prior to request for leave

Provides 12 weeks of unpaid leave for:
*Birth/Adoption/Foster Care of child
*Serious family medical/health problems
*Employee’s own serious medical/health problem