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MBA,PHD, Juris Doctor
Strayer,Devery,Harvard University
Mar-1995 - Mar-2002
Manager Planning
WalMart
Mar-2001 - Feb-2009
Fringe Benefit Assignment
RMI 330
Name_______________
1. AD&D
Accidental Death and Dismemberment coverage
1. Explain a) what this coverage is and when the life insurance coverage from this benefit applies; and
b) calculate both the employer’s share and the employee’s share of the AD&D premium (cost) for an employee earning $42,000 per year in ‘base pay’ (Hints: The employer pays 75% of the cost, and you are given the rate to calculate the employee’s share.) Use the information located at http://cms.bsu.edu/about/administrativeoffices/payrolleb/benefits-for-current-employees/life-and-disability-plansto calculate the premiums for both the employer and the employee. Show your work for full credit. After calculating the proper “benefit amount”, please scroll past the “Life Insurance” section to be sure you’re using information from the “Accidental Death and Disability” section for the rate.
2. Disability Coverage
1. The website claims that long-term disability benefits are subject to state and federal income tax. What does this imply about the tax status of the premiums?
2. An employee with annual ‘base pay’ of $42,000 would qualify for what monthly long-term disability benefit?
Show your work for full credit.
3. An employee with annual ‘base pay’ of $42,000 would pay what premium each month to participate? Show your work for full credit.
4. The website says that after 26 months, the continuing benefit will be dropped to 20% of salary (from 60% x 103%), possibly because Social Security disability benefits would likely apply for a disabled person after this period of time. Explain if you believe this combination of benefits would adequately protect a disabled employee from a decrease in his/her standard of living. Please note that the answer to this question will be graded for writing quality, using the rubric attached to the assignment, as before. Multiple paragraphs (but no more than three) are expected for full credit.
Attachments:
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