Exam (elaborations)
FP512 Module 6 Employee Group Benefits 2024
- Course
- Institution
FP512 Module 6 Employee Group Benefits 2024
[Show more]
Seller
Follow
stuviaexam
Content preview
FP512 Module 6 Employee GroupBenefits
Group Life Insurance - ✅✅ -provides life insurance on a group of people in a
single master contract. Structured as contributory or noncontributory
(employees pay part of the premiums or the employer covers it all)
Tenprarily fills the earnings gap that would result from a workers death.
Pros:
Typically easier and less costly than indivdual insurance
Medical exams typically not required
Con:
coverage typically ends when the emplyee leaves the group
Group Term Life Insurance - ✅✅ -Form of insurance carried by employers for
their employees that provides a lump-sum payment to the employees'
beneficiaries. Low cost and simple.
No medical exam.
Face value can be established through one of many means ;
percentage/multiple of earnings, based on years of service, classes of
employees
Can also have ancillary benefits like conversion to permanent coverage after
termination.
Section 79 - ✅✅ -For an employer to receive favorable tax treatment with a
plan the group policy plan must be these requirements:
-The coverage must provide a general benefit
-Must be provided to a group of employees as part of their compensation for
services rendered to the employer
-Self employed individual, partner, 2% owner of an S Corp are not employees
for this purpose
-Must be provided by the employer as a master policy or a group of individual
policies
-Must be provided to more than 10 employees
, -The amount of insurance provided must be consistent with no individual
selection
If fewer than 10 employees, for favorable tax treatment :
-coverage is provided for all full time employees
-amount of insurance is based on a uniform percentage of compensation
-amount of insurance is based on bracket coverage - with no bracket
exceeding the bracket below by more than 2.5 times - and the insurance
amount of the lowest bracket is at least 10% of the top bracket
- evidence of insurability may be requested via a medical questionnaire; but
may not be based on physical examination
*Cannot discriminate in favor of key employees
Key employees - ✅✅ --annual compensation is greater than the set annual
amount
-has greater than a 5% ownership in the company
-has greater than 1% ownership and has annual compensation great than a
determined amount
✅✅
Eligibility is considered non discriminatory if.... - -Must meet 1 of 4
criteria:
-At least 70% of employees benefit from the plan
-at least 85% of participating employees are not key employees
-the plan benefits a nondiscriminatory employee classification
-the plan is part of a cafeteria plan and coverage complies with the Section
125 non discrimination requirements
Accidental death and dismemberment - ✅✅ -An insurance policy provision
that protects the insured if he or she suffers loss of sight or loss of limb(s) or
death by accident
Typically a percentage of group term life coverage.
2 types: Business travel insurance and voluntary accident insurance
Group Permanent Insurance Coverage - ✅✅-For employer favorable tax
treatment 2 things must be met -
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller stuviaexam. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.37. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
81989 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now