Answer both questions 400 words with credible references. Text attached. Question A Many organizations are concerned about the rising cost of employee benefits and question their value to the organiza

OASDI has become nearly universal for work performed in the United States, covering approximately 96 percent of the American workforce. W orkers excluded from coverage include railroad workers and civil service employees covered by their own systems as well as farmers, domestic workers, and the self-employed whose earnings do not meet certain minimum requirements. The Social Security program is supported by means of a tax levied against an employee’s earnings that must be matched by the employer in each pay period. In 2014, the tax was 6.2 percent. This percentage can vary , though. For example, to stimulate the economy during the last recession, the rate employees paid during 201 1 was temporarily reduced to 4.2 percent. (The amount self-employed individuals paid was reduced from 12.4 to 10.4 percent.) The tax revenues are used to pay three major types of benefits: retirement benefits, disability benefits, and survivors’ benefits. Because of the continual changes that result from legislation and administrative rulings, as well as the complexities of making determinations of an individual’s rights under Social Security, we will describe these benefits only in general terms. Highlights in HRM 1 A Personalized Statement of Benefits Costs 5/12/2020 Print Preview https://ng.cengage.com/static/nb/ui/evo/index.html?eISBN=9781285872643&id=30222991&snapshotId=116383&dockAppUid=101&nbId=116383& 2/5 A Personalized Statement of Benefits Costs Retirement Benefits To qualify for retirement benefits, a person must have reached retirement age and be fully insured. A fully insured person has earned 40 credits—a maximum of four credits a year for 10 years, based on annual earnings, a figure adjusted annually . The amount of monthly Social Security retirement benefits is based on earnings, adjusted for inflation, over the years an individual is covered by Social Security. Under Social Security guidelines, an individual’s full retirement age depends on the year of his or her birth. Workers born before 1938 can collect full benefits at age 65. Because of longer life expectancies, for those born after that date, the age to collect full benefits has been gradually raised to age 67. 5/12/2020 Print Preview https://ng.cengage.com/static/nb/ui/evo/index.html?eISBN=9781285872643&id=30222991&snapshotId=116383&dockAppUid=101&nbId=116383& 3/5 Currently individuals can receive Social Security benefits as early as age 62, but the amount they receive each month will be less than monthly benefits received at full retirement age. In addition, many people who are younger than full retirement age but are 62 or over work part-time as well as collect Social Security . However, they can only earn so much money before the government begins reducing their monthly Social Security checks. (In 2013 the earnings limit was $15,120). However , once workers reach their full retirement ages there is no limit on the amount they can earn; their Social Security checks will not be reduced.

Human resources managers need to keep this in mind when they develop programs to retain and attract older workers.

Disability Benefits under Social Security Social Security pays benefits to people who cannot work because they have a medical condition that is expected to last at least one year or result in death. Although some government programs provide money to people with partial disabilities or short-term disabilities, Social Security does not. In addition to disability payments to the worker , certain members of an employee’s family, such as spouses over 62 and dependent children, may qualify for benefits based on the person’ s work history. The Social Security Administration uses a five-step process to decide if a worker is disabled and eligible to collect benefits. Highlights in HRM 2 outlines this process. Survivor’s Benefits Survivors’ benefits represent a form of life insurance paid to members of a deceased person’ s family who meet the eligibility requirements. Survivors’ benefits can be paid only if the deceased worker had credit for a certain amount of time spent in work covered by Social Security . The exact amount of work credit needed depends on the worker ’s age at death. As with other benefits discussed earlier , the amount of benefit survivors receive is based on the worker’s lifetime earnings doing work covered by Social Security .

Medicare The Social Security Administration also administers the Medicare program, which is funded by a separate payroll tax. Retired people age 65 or older are eligible for Medicare, which includes both medical and hospital insurance and prescription drug coverage. The program helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care. A portion of the payroll taxes is paid by workers and matched by their employers. In 2011, workers and their employers each paid 1.45 percent on every dollar of salary or wages paid. Medicare is also financed in part by monthly medical premiums deducted from Social Security recipient’ s checks. Highlights in HRM 2 Who Is Eligible to Collect Disability Payments under the Social Security Act? 5/12/2020 Print Preview https://ng.cengage.com/static/nb/ui/evo/index.html?eISBN=9781285872643&id=30222991&snapshotId=116383&dockAppUid=101&nbId=116383& 4/5 If you experience a disability , the Social Security Administration in conjunction with a state agency will use the following five-step process to determine if you are eligible to collect benefits. 1. Are you working? If you are working and your earnings average more than a certain amount each month, you will generally not be considered disabled.

The amount changes each year . If you are not working, or your monthly earnings average this amount or less, a state agency will then look at your medical condition. 2. Is your medical condition “severe”? For the state agency to decide that you are disabled, your medical condition must significantly limit your ability to do basic work activities—such as walking, sitting, and remembering—for at least one year. If your medical condition is not that severe, the state agency will not consider you disabled. If your condition is that severe, the state agency goes on to step three. 3. Is your medical condition on the List of Impairments? The state agency has a list of impairments that describes medical conditions that are considered so severe that they automatically mean that you are disabled as defined by law. If your condition (or combination of medical conditions) is not on this list, the state agency looks to see if your condition is as severe as a condition that is on the list. If the severity of your medical condition meets or equals that of a listed impairment, the state agency will decide that you are disabled. If it does not, the state agency goes on to step four . 4. Can you do the work you did before? At this step, the state agency decides if your medical condition prevents you from being able to do the work you did before. If it does not, the state agency will decide that you are not disabled. If it does, the state agency goes on to step five. 5. Can you do any other type of work? If you cannot do the work you did in the past, the state agency looks to see if you would be able to do other work.

It evaluates your medical condition, your age, education, past work experience, and any skills you may have that could be used to do other work.

If you cannot do other work, the state agency will decide that you are disabled. If you can do other work, the state agency will decide that you are not disabled. Source: Disability Benefits, SSA Publication No. 05-10029 (Washington, DC: U.S. Social Security Administration, 2010), www .ssa.gov/diplan/dqualify5.htm. 5/12/2020 Print Preview https://ng.cengage.com/static/nb/ui/evo/index.html?eISBN=9781285872643&id=30222991&snapshotId=116383&dockAppUid=101&nbId=116383& 5/5 One of the concerns employers have about Medicare relates to the eligibility age. As we explained, it is currently 65, but legislators are considering increasing the age to 67 as they have done with Social Security . If this happens, employees aged 65 and older might continue to use their company-provided health care coverage rather than Medicare. This could more than double the cost employers pay for health care coverage for this group of employees and retirees whose union contracts require their former companies cover them until Medicare does. According to one survey , the cost of employer-sponsored health care spent on Medicare-eligible retirees averaged just $4,654 per person compared to an average of $10,872 for pre-Medicare eligible retirees. Chapter 11: Employee Benefits: 1 1.2a Social Security Insurance Book Title: Managing Human Resources Printed By: Cedric T urner ([email protected]) © 2016 Cengage Learning, Cengage Learning © 2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder .