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- 5. Copyright ©2015 Pearson Education, Inc. 207 CHAPTER 10 Employer-Sponsored Retirement Plans and Health Insurance Programs Learning Objectives 1. State the definitions of qualified plans and nonqualified plans and indicate the main difference between them. 2. List nine minimum standards for qualified plans. 3. Explain what defined benefit plans are. 4. Explain what defined contribution plans are. 5. List and summarize two types of defined contribution plans. 6. Identify and summarize three broad classes of health insurance programs. 7. Briefly state the rationale for consumer-driven health care. Outline I. Exploring Retirement Plans A. Overview B. Origins of Employer-Sponsored Retirement Plans C. Trends in Retirement Plan Coverage and Costs II. Qualified Plans A. Overview B. Minimum Standards for Qualified Plans III. Defined Benefit Plans A. Overview B. Minimum Funding Standards C. Benefit Limits and Tax Deductions IV. Defined Contribution Plans A. Overview B. Individual Accounts C. Investments of Contributions D. Employee Participation in Investments E. Accrual Rules F. Minimum Funding Standards G. Contribution Limits and Tax Deductions V. Types of Defined Contribution Plans A. Types B. Section 401(k) Plans C. Profit-Sharing Plans D. Stock Bonus Plans E. Employee Stock Ownership Plans (ESOPs)
- 6. Copyright ©2015 Pearson Education, Inc. 208 VI. Hybrid Plans: Cash Balance Plans A. Overview VII. Defining and Exploring Health Insurance Programs A. Overview B. Origins of Health Insurance Benefits C. Health Insurance Coverage and Costs VIII.Fee-for-Service Plans A. Overview B. Features of Fee-for-Service Plans IX. Managed Care Plans A. Overview B. Health Maintenance Organizations C. Features of Health Maintenance Organizations X. Preferred Provider Organizations A. Overview B. Features of Preferred Provider Organizations C. Deductibles D. Coinsurance XI. Point-of-Service Plans XII. Specialized Insurance Benefits A. Overview B. Prescription Drug Plans C. Mental Health and Substance Abuse D. Features of Mental Health and Substance Abuse Plans XIII.Consumer-Driven Health Care Plans A. Overview B. Flexible Spending Accounts XIV. Discussion Questions and Suggested Answers XV. End of Chapter Case; Instructor Notes, and Questions and Suggested Student Responses XVI. Additional Cases from the MyManagementLab Website; Instructor Notes, and Suggested Student Responses
- 7. Copyright ©2015 Pearson Education, Inc. 209 Lecture Outline I. Exploring Retirement Plans A. Overview 1. Individuals may receive retirement benefits from as many as three sources a. Employer-sponsored retirement plans provide employees with income after they have met a minimum retirement age and have left the company b. The Social Security Old-Age, Survivor, and Disability Insurance (OASDI) program provides government-mandated retirement income to employees who have made sufficient contributions through payroll taxes (more in Chapter 11) c. Individuals may use their initiative to take advantage of tax regulations that have created such retirement programs as individual retirement accounts (IRAs) and Roth IRAs 2. Companies establish retirement or pension plans following one of three design configurations: a. Defined benefit plan b. Defined contribution plan c. Hybrid plan 3. Tax incentives encourage companies to offer pension programs 4. Employee Retirement Income Security Act of 1974 ERISA Title I and Title II provisions set the minimum standards required to “qualify” pension plans for favorable tax treatment 5. Failure to meet any of the minimum standard provisions “disqualifies” pension plans for favorable tax treatment 6. Pension plans that meet these minimum standards are known as qualified plans 7. Nonqualified plans refer to pension plans that do not meet at least one of the minimum standard provisions; typically, highly paid employees benefit from participation in nonqualified plans (more in Chapter 12) B. Origins of Employer-Sponsored Retirement Plans 1. Until World War II, pension plans were adopted primarily in the railroad, banking, and public utility industries 2. Favorable tax treatment of pensions was established through the passage of the Revenue Act of 1921 and government-imposed wage increase controls during World War II in the early 1940s 3. Led companies to adopt discretionary employee benefits plans such as pensions that were excluded from those wage increase restrictions 4. Current tax treatment of qualified plans continues to provide incentives both for employers to establish plans and for employees to participate in them 5. Contribution to a qualified plan is deductible in computing the employer’s or employee’s taxes based on who made the contribution 6. This preferential tax treatment is contingent on the employer’s compliance with the ERISA
- 8. Copyright ©2015 Pearson Education, Inc. 210 C. Trends in Retirement Plan Coverage and Costs 1. According to the U.S. Bureau of Labor Statistics, private sector participation in at least one company-sponsored retirement plans was: a. 55 percent in 1992–1993 b. 32 percent in 1992–1993 in defined contribution plans and slightly less in defined benefit plans c. 48 percent in 2012 in defined contribution plans d. Noticeable decline in defined benefit plans in the last several years 2. Two important explanations for these trends in participation a. Shift in the labor force toward different occupations and industries b. Costs 3. Shift in labor force a. Relative decline in employment among full-time workers, union workers, and workers in goods-producing businesses b. Decline in full-time workers and increase in part-time workers has led to fewer opportunities for participation in company-sponsored retirement plans c. Decline in union affiliation (i.e., union members or just part of the bargaining unit) also contributes to the overall trends i. In 2012, about 66 percent of employees affiliated with unions were eligible to participate in a defined benefit plan whereas only 12 percent of employees not affiliated with unions were eligible. ii. In 2012, about 45 percent of employees affiliated with unions were eligible to participate in a defined contribution plan whereas only 41 percent of employees not affiliated with unions were eligible. d. Expansion of service industries relative to somewhat stable employment in the goods-producing sector helps to explain retirement plan participation e. Fewer service-oriented workers have access to defined benefit plans (17 percent versus 27 percent) f. Percentage of workers with access to defined contribution plans is higher and similar in both industries (approximately 60 percent percent) g. Actual employee participation in defined contribution plans is drastically lower for service employers than for goods-producing companies 4. Costs a. Defined benefit plans are quite costly to employers compared with defined contribution plans b. The Pension Benefit Guaranty Corporation (PBGC) serves as the insurer by taking over pension obligations for companies that terminate their defined benefit plans because of severe financial stress c. Companies with defined benefit plans pay premiums to the PBGC to insure defined benefit plans in the event of severe financial distress d. The Pension Protection Act requires that companies that are at high risk of not meeting their pension obligations pay substantially more to insure defined benefit plans, adding to the substantial cost
- 9. Copyright ©2015 Pearson Education, Inc. 211 II. Qualified Plans A. Overview 1. Entitle employers and employees to substantial tax benefits 2. Employers and employees specifically do not pay tax on their contributions within dollar limits that differ for defined benefit and defined contribution plans 3. Investment earnings of the trust in which plan assets are held are generally exempt from tax 4. Participants or beneficiaries do not pay taxes on the value of retirement benefits until they receive distributions B. Minimum Standards for Qualified Plans 1. Thirteen fundamental characteristics: a. Participation requirements b. Coverage requirements c. Vesting rules d. Accrual rules e. Nondiscrimination rules: testing f. Key employee and top-heavy provisions g. Minimum funding standards h. Social Security integration i. Contribution and benefit limits j. Plan distribution rules k. Qualified survivor annuities l. Qualified domestics relations orders m. Plan termination rules and procedures 2. Participation requirements a. Age requirements - employees must be allowed to participate in pension plans after they have reached age 21 b. Service requirements - employees must be allowed to participate in pension plans after they have completed one year of service (based on 1,000 work hours) 3. Coverage requirements a. Limit the freedom of employers to exclude employees b. Qualified plans do not disproportionately favor highly compensated employees 4. Vesting rules a. Vesting refers to an employee’s non-forfeitable rights to pension benefits b. There are two aspects of vesting: i. First, employees are always vested in their contributions to pension plans ii. Second, companies must grant full vesting rights to employer contributions on one of the following two schedules - cliff vesting or six-year graduated schedule
- 10. Copyright ©2015 Pearson Education, Inc. 212 c. Cliff vesting schedules must grant employees 100 percent vesting after no more than three years of service d. Known as cliff vesting because leaving one’s job prior to becoming vested under this schedule is tantamount to falling off a cliff because an employee loses all of the accrued employer contributions e. The six-year graduated schedule allows workers to become 20 percent vested after two years and to vest at a rate of 20 percent each year thereafter until they are 100 percent vested after six years of service f. Plans may have faster gradual schedules to 100 percent vesting in fewer than six years g. The graduated schedule is preferable to employees who anticipate changing jobs frequently because they will earn the rights to keep part of the employer’s contribution sooner. h. Employees recognize that layoffs are more common in today’s volatile business environment and they stand to benefit by earning partial vesting rights sooner than earning full vesting rights at a later date i. Employers prefer the cliff vesting schedule recognizing that many employees tend to change jobs more frequently than ever before, allowing them to reclaim non-vested contributions for employees who leave before becoming vested j. After six years of participation in the pension plan, an employee has the right to receive all of the contributions plus interest on the contributions made by the employer 5. Accrual rules a. Qualified plans are subject to minimum accrual rules based on the Internal Revenue Code (IRC) and ERISA b. Accrual rules specify the rate at which participants accumulate (or earn) benefits c. Defined benefit and defined contribution plans use different accrual rules 6. Nondiscrimination rules: Testing a. Nondiscrimination rules prohibit employers from discriminating in favor of highly compensated employees in contributions or benefits, availability of benefits, rights, or plan features b. Employers may not amend pension plans so that highly compensated employees are favored 7. Benefit and contribution limits a. Refer to the maximum annual amount an employee may receive from a qualified defined benefit plan during retirement b. Contribution limits apply to defined contribution plans: i. Employers are limited in the amount they may contribute to an employee’s defined contribution plan each year ii. The Economic Growth and Tax Relief Reconciliation Act of 2001 amended IRC Section 415, mandating increases in these limits effective after December 31, 2001, and indexing them each year for inflation to keep retirement savings from falling behind
- 11. Copyright ©2015 Pearson Education, Inc. 213 increases in the cost of goods and services, thereby making retirees less dependent on Social Security retirement benefits (more in Chapter 11) ii. The limits were set to expire after the year 2009, but the Pension Protection Act of 2006 made the limits permanent 8. Allowable tax deductions for employers a. Employers may take tax deductions for contributions to employee retirement plans based on three conditions: i. Retirement plans must be qualified ii. The employer must make contributions before the due date for its federal income tax return for that year iii. Deductible contributions are based on designated amounts set forth by the IRC (as subsequently amended by the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Pension Protection Act of 2006) 9. Plan distribution rules a. Refers to the payment of vested benefits to participants or beneficiaries b. Payable in a variety of ways i. Lump sum distributions are single payments of benefits ii. In defined contribution plans, lump sum distributions equal the vested amount (i.e., the sum of all employee and vested employer contributions, and interest on this sum) iii. In defined benefit plans, lump sum distributions equal the equivalent of the vested accrued benefit iv. Annuities represent a series of payments for the life of the participant and beneficiary v. Annuity contracts are usually purchased from insurance companies, which make payments according to the contract vi. Inherent risk of defined contribution plans has given rise to income annuities vii. Income annuities distribute income to retirees based on retirement savings paid to insurance companies in exchange for guaranteed monthly checks for life 10. Plan termination rules and procedures a. Apply only to defined benefit plans b. Three types of plan terminations: i. Standard termination ii. Distress termination iii. Involuntary termination c. Qualified plans must follow strict guidelines for plan terminations including sufficient notification to plan participants, notification to the PBGC, and distribution of vested benefits to participants and beneficiaries in a reasonable amount of time
- 12. Copyright ©2015 Pearson Education, Inc. 214 III. Defined Benefit Plans A. Overview 1. Guarantee retirement benefits specified in the plan document 2. Usually expressed in terms of a monthly sum equal to a percentage of a participant’s preretirement pay multiplied by the number of years he or she has worked for the employer 3. Benefit is fixed by a formula 4. Level of required employer contributions fluctuates from year to year 5. Level depends on the amount necessary to make certain that benefits promised will be available when participants and beneficiaries are eligible to receive them 6. Annual benefits are usually based on age, years of service, and final average wages or salary 7. Retirement plans based on unit benefit formulas specify annual retirement benefits as a percentage of final average salary Example: Unit Benefit Formulas Let’s assume Mary retires at age 59 with 35 years of service. Let’s also assume her final average salary is $52,500. Mary multiplies $52,500 by the annual percentage of 68.20%. Her annual benefit is $35,805.00 ($52,500 X 68.20%) B. Minimum Funding Standards 1. Employers make an annual contribution that is sufficiently large to ensure that promised benefits will be available to retirees 2. Actuaries periodically review several kinds of information to determine a sufficient funding level a. Life expectancies of employees and their designated beneficiaries b. Projected compensation levels c. Likelihood of employees terminating their employment before they have earned benefits 3. ERISA imposes the reporting of actuarial information to the IRS, which in turn submits these data to the U.S. Department of Labor, which reviews the data to ensure compliance with ERISA regulations C. Benefit Limits and Tax Deductions 1. IRC sets a maximum annual benefit for defined benefit plans that is equal to the lesser of $205,000 in 2013, or 100 percent of the highest average compensation for three consecutive years 2. The limit is indexed for inflation in $5,000 increments each year beginning after 2006 IV. Defined Contribution Plans A. Overview 1. Employers and employees make annual contributions to separate accounts established for each participating employee, based on a formula contained in the plan document
- 13. Copyright ©2015 Pearson Education, Inc. 215 2. Formulas typically call for employers to contribute a given percentage of each participant’s compensation annually 3. Employers invest these funds on behalf of the employee, choosing from a variety of investment vehicles a. Company stocks b. Diversified stock market funds c. Federal government bond funds 4. Participants bear the risk of possible investment gain or loss, and benefit amounts depend upon several factors, including: a. Contribution amounts b. Performance of investments c. Forfeitures transferred to participant accounts B. Individual Accounts 1. Defined contribution plans contain accounts for each employee into which contributions are made, and losses are debited or gains are credited 2. Contributions to each employee’s account come from four possible sources: a. The first, employer contributions, are expressed as a percentage of an employee’s wage or salary b. The second, employee contributions, are usually expressed as a percentage of the employee’s wage or salary c. The third, forfeitures, come from the accounts of employees who terminated their employment prior to earning vesting rights d. The fourth contribution source is return on investments. In the case of negative returns (or loss), the corresponding amount is debited from employees’ accounts C. Investments of Contributions 1. ERISA requires that a named fiduciary manage investments into defined contribution plans 2. Fiduciaries are individuals who manage employee benefit plans and pension funds 3. Possess discretion in managing the assets of the plan, offering investment advice to employee participants, and administering the plan 4. Responsible for minimizing the risk of loss of assets 5. Possess the authority to delegate investment responsibility to an investment manager 6. Investment managers select investments based on a comparison of the risk and return potential of various investment options 7. May invest assets in a variety of investment vehicles, including equities, government bonds, cash, insurance, and real estate 8. Usually invest assets in more than one type of investment vehicle to balance risk and return potential D. Employee Participation in Investments 1. Some companies may allow plan participants to choose the investment of funds in their individual accounts
- 14. Copyright ©2015 Pearson Education, Inc. 216 2. It is not uncommon for large companies to offer investment alternatives through such companies as Fidelity, Vanguard, and T. Rowe Price E. Accrual Rules 1. The accrued benefit equals the balance in an individual’s account 2. Companies must not reduce contribution amounts based on age 3. Companies may also not set maximum age limits for discontinuing contributions F. Minimum Funding Standards 1. The minimum funding standard for defined contribution plans is less complex than it is for defined benefit plans 2. This standard is met when contributions to the individual accounts of plan participants meet the minimum amounts as specified by the plan G. Contribution Limits and Tax Deductions 1. Employer contributions to defined contribution plans represent one factor in annual additions 2. Refers to the annual maximum allowable contribution to a participant’s account in a defined contribution plan 3. The annual addition includes employer contributions, employee contributions, and forfeitures allocated to the participant’s account 4. In 2013, annual additions were limited to the lesser of $51,000 or 100 percent of the participant’s compensation V. Types of Defined Contribution Plans A. Types 1. Section 401(k) plans 2. Profit sharing 3. Stock bonus plans 4. Employee stock ownership plans (ESOPs) B. Section 401(k) Plans 1. Named after the section of the IRC that created them 2. Also known as cash or deferred arrangements (CODAs) 3. Permit employees to defer part of their compensation to the trust of a qualified defined contribution plan 4. Only private sector or tax-exempt employers are eligible to sponsor 401(k) plans 5. Three noteworthy tax benefits: a. Employees do not pay income taxes on their contributions to the plan until they withdraw funds b. Employers deduct their contributions to the plan from taxable income c. Investment gains are not taxed until participants receive payments C. Profit-Sharing Plans 1. Set up to distribute money to employees 2. Establish a profit-sharing pool (i.e., the money earmarked for distribution to employees) 3. May choose to fund profit-sharing plans based on gross sales revenue or some basis other than profits
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- 16. Copyright ©2015 Pearson Education, Inc. 217 4. May take a tax deduction for contributions not to exceed 25 percent of the plan participants’ compensation in 2013 5. Employer contributions a. Three common formulas establish employer contributions: i. Fixed first-dollar-of-profits ii. Graduated first-dollar-of-profits iii. Profitability threshold b. The fixed first-dollar-of-profits formula uses a specific percentage of either pretax or after-tax annual profits (alternatively, gross sales or some other basis) contingent upon the successful attainment of a company goal c. The graduated first-dollar-of-profits formula is not a fixed percentage and varies by profit levels d. Profitability threshold formulas fund profit-sharing pools only if profits exceed a predetermined minimum level, but fall below some established maximum level 6. Allocation formulas a. Companies usually make distributions in one of three ways: i. Equal payments ii. Proportional payments to employees based on their annual salary iii. Proportional payments to employees based on their contribution to profits b. Equal payments to all employees reflect a belief that all employees should share equally in the company’s gains in order to promote cooperation among employees c. For proportional payments to employees based on their annual salary, higher paying jobs presumably indicate the greatest potential to influence a company’s competitive position d. For proportional payments to employees based on their contribution to profits, some companies measure employee contributions to profits based on job performance; however, this approach is not very feasible because it is difficult to isolate each employee’s contributions to profits D. Stock Bonus Plans 1. May be the basis for a company’s 401(k) plan 2. Qualified stock bonus plans and qualified profit-sharing plans are similar because both plans invest in company securities 3. Reward employees with company stock (i.e., equity shares in the company) 4. Benefits are usually paid in shares of company stock 5. Participants of stock bonus plans possess the right to vote as shareholders 6. Voting rights differ based on whether company stock is traded in public stock exchanges E. Employee Stock Ownership Plans (ESOPs) 1. May be the basis for a company’s 401(k) plan
- 17. Copyright ©2015 Pearson Education, Inc. 218 2. Invest in company securities, making them similar to profit-sharing plans and stock bonus plans 3. ESOPs and profit-sharing plans differ because ESOPs usually make distributions in company stock rather than cash 4. ESOPs are essentially stock bonus plans that use borrowed funds to purchase stock 5. Two types: a. Nonleveraged—company contributes stock or cash to buy stock which is then allocated to participants b. Leveraged—plan administrator borrows money from a financial institution to purchase company stock which may then be used for the financing of existing debt, estate planning, or financing an acquisition or divestiture VI. Hybrid Plans: Cash Balance Plans A. Overview 1. Combine features of traditional defined benefit and defined contribution plans 2. Cash balance plans are defined benefit plans that define benefits for each employee by reference to the amount of the employee’s hypothetical account balance 3. Many companies have chosen to convert their defined benefit plans to cash balance plans for two key reasons: a. Cash balance plans are less costly to employers than defined benefit plans b. They pay out benefits in a lump sum instead of a series of payments and increase the portability of pension benefits from company to company Why Cash Balance Plans: • In January 2012, employees had worked for their current employer for a median value of 4.4 years; those aged 45 to 54 had worked for their current employer a median value of 7.8 years. Younger workers aged 25 to 34 had worked a median value of 3.2 years. • These data suggest workers may be accumulating retirement benefits from several jobs; employers have attempted to deal with these changing needs by seeking alternative approaches to providing retirement income. 4. Most common approaches include a fixed percentage of earnings and percentages that vary by age, length of service, or earnings 5. Participants receive credits expressed as a percentage of annual pay, and these credits earn interest at a designated rate
- 18. Copyright ©2015 Pearson Education, Inc. 219 6. Amounts stated in these individual accounts are strictly hypothetical because the employer contributes money to the plan as a whole covering all employees 7. Complex federal rules require that employers have sufficient assets to cover the amounts expressed in every employee’s hypothetical account VII. Defining and Exploring Health Insurance Programs A. Overview 1. Covers the costs of a variety of services that promote sound physical and mental health, including physical examinations, diagnostic testing, surgery, hospitalization, psychotherapy, dental treatments, and corrective prescription lenses for vision deficiencies 2. Employers usually enter into a contractual relationship with one or more insurance companies to provide health-related services for their employees and, if specified, employees’ dependents 3. The insurance policy specifies the amount of money the insurance company will pay for such particular services as physical examinations 4. Employers pay insurance companies a negotiated amount, or premium, to establish and maintain insurance policies; the term insured refers to employees covered by the insurance policy 5. In the United States, companies can choose from three broad classes of health insurance programs: a. Fee-for-service programs b. Managed care plans c. Point-of-service plans 6. An emerging class of health insurance programs is based on consumer- driven health care, where employees: a. play a greater role in decisions on their health care b. have better access to information c. share more in the costs B. Origins of Health Insurance Benefits 1. Great Depression of the 1930s gave rise to employer-sponsored health insurance programs 2. Congress proposed the Social Security Act of 1935 to address many of the social maladies caused by the adverse economic conditions, incorporating health insurance programs 3. President Franklin D. Roosevelt, however, opposed the inclusion of health coverage under the Social Security Act. Health insurance did not become part of the Social Security Act until an amendment to the Act in 1965 established the Medicare program 4. In the 1930s, hospitals controlled nonprofit companies that inspired today’s Blue Cross and Blue Shield plans 5. In the 1940s, local medical associations created nonprofit Blue Shield plans, which were prepayment plans for physician services 6. The federal government also imposed wage freezes during World War II, which did not extend to employee benefit plans
- 19. Copyright ©2015 Pearson Education, Inc. 220 7. Many employers began offering health care benefits to help compete for and retain the best employees, particularly during the labor shortage when U.S. troops were overseas fighting in World War II 8. In the 1960s, the federal government amended the Social Security Act. Titles XVIII and XIX of the Act established the Medicare and Medicaid programs, respectively 9. The Health Maintenance Organization Act of 1973 (HMO Act) promoted the use of health maintenance organizations 10. Since the 1970s there has been substantial emphasis on managing costs, and consideration has been given to providing coverage to the uninsured (e.g., the failed national health care proposal under former President Bill Clinton) C. Health Insurance Coverage and Costs 1. Companies stand to gain from sponsoring these benefits in at least two ways: a. Healthier workforce should experience a lower incidence of sickness absenteeism b. Health insurance offerings should help the recruitment and retention of employees 2. Most recent comprehensive national data indicate that more than half (70 percent) of all private sector employees had access to at least one employer-sponsored health insurance program in 2012 3. Varies by employer size, industry group, and union presence 4. A larger percentage of employees in larger companies, goods-producing companies, and union employees had coverage 5. Employee contributions represent a relatively small percentage of the health insurance premiums as of March 2012 a. Single coverage - 21 percent b. Family coverage - 32 percent 6. Single coverage extends benefits only to the covered employee 7. Family coverage offers benefits to the covered employee and his or her family members as defined by the plan (usually, spouse and children) VIII.Fee-for-Service Plans A. Overview 1. Provide protection against health care expenses in the form of a cash benefit paid to the insured or directly to the health care provider after the employee has received health care services 2. Three types of eligible health expenses: a. Hospital expenses b. Surgical expenses c. Physician charges 3. Policyholders (employees) may generally select any licensed physician, surgeon, or medical facility for treatment, and the insurer reimburses the policyholders after medical services are rendered 4. Two types of fee-for-service plans:
- 20. Copyright ©2015 Pearson Education, Inc. 221 a. Indemnity plans b. Self-funded plans 5. Indemnity plans are based on a contract between the employer and an insurance company which specifies the expenses that are covered and the rate 6. Self-funded plans are those in which companies pay benefits directly from their own assets, either current cash flow or funds set aside in advance for potential future claims 7. Self-funding makes sense when a company’s financial burden of covering employee medical expenses is less than the cost to subscribe to an insurance company for coverage 8. Three types of expenses: a. Hospitalization b. Surgical c. Physician 9. Companies sometimes select major medical plans to provide comprehensive medical coverage instead of limiting coverage to these three specific types of expenses or to supplement these specific benefits B. Features of Fee-for-Service Plans 1. Common fee-for-service stipulations include: a. Deductibles b. Coinsurance c. Out-of-pocket maximums d. Preexisting condition clauses e. Preadmission certification f. Second surgical opinions g. Maximum benefits limits 2. Deductibles a. Employees must pay for services (i.e., meet a deductible) before insurance benefits become active b. The amount is modest, usually a fixed amount ranging anywhere between $100 and $500 depending on the plan c. Amounts may also depend on annual earnings, either expressed as a fixed amount for a range of earnings or as a percentage of income 3. Coinsurance a. Refers to the percentage of covered expenses paid by the insured b. Most indemnity plans stipulate 20 percent coinsurance c. This means the plan will pay 80 percent of covered expenses; the policyholder is responsible for the difference, in this case 20 percent d. Insurance plans most commonly apply no coinsurance for diagnostic testing and 20 percent for other medical services; coinsurance rates for these services tend to be the highest, usually 50 percent. 4. Out-of-pocket maximum a. Protects individuals from catastrophic medical expenses or expenses associated with recurring episodes of the same illness
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- 27. PENN MUTUAL LIFE INSURANCE CO. William Penn, man of vision, courage, action, by N. C. Wyeth. Man in colonial dress standing in foreground with crowd of people behind him. © 10Feb33; G10500. Penn Mutual Life Insurance Co. (PWH); 29Apr60; R256186.
- 28. PLATT & MUNK CO., INC. Children's favorite stories. No. 2525 B. © 21Jun33; K20965. Platt & Munk Co., Inc. (PWH); 29Jun60; R259435. Famous fairy tales. Jacket. © 3Jan33; K18833. Platt & Munk Co., Inc. (PWH); 31Mar60; R254632. Famous rhymes of Mother Goose. Jacket. © 3Jan33; K18834. Platt & Munk Co., Inc. (PWH); 31Mar60; R254633. My story book library. No. 2525 A. © 21Jun33; K20964. Platt & Munk Co., Inc. (PWH); 29Jun60; R259436.
- 29. PROVIDENCE LITHOGRAPH CO. The Boy Jesus. © 6Aug32; K17558. Providence Lithograph Co. (PWH); 27Jun60; R258827. Caring for the Baby Jesus. © 4Nov32; K18176. Providence Lithograph Co. (PWH); 27Jun60; R258835. Children bringing gifts. © 8Apr32; K16593. Providence Lithograph Co. (PWH); 25Feb60; R252688. Evils of intemperance. © 6Apr32; K16590. Providence Lithograph Co. (PWH); 25Feb60; R252686. The first Christmas. © 6Jul32; K17276. Providence Lithograph Co. (PWH); 27Jun60; R258823. Following the star. © 6Jul32; K17277. Providence Lithograph Co. (PWH); 27Jun60; R258824. Gifts for building the tabernacle. © 6Apr32; K16591. Providence Lithograph Co. (PWH); 25Feb60; R252687. He took them in His arms and blessed them. © 22Oct32; K18042. Providence Lithograph Co. (PWH); 27Jun60; R258831. Helpers like Jesus. People laying their money at disciples' feet. © 4Nov32; K18180. Providence Lithograph Co. (PWH); 27Jun60; R258837. Helpers like Jesus. The good Samaritan. © 4Nov32; K18179. Providence Lithograph Co. (PWH); 27Jun60; R258836. Helping at home. © 6Jul32; K17275. Providence Lithograph Co. (PWH); 27Jun60; R258822. Helping to care for a baby. © 1Apr32; K16576. Providence Lithograph Co. (PWH); 25Feb60; R252684.
- 30. Israel journeying toward Canaan. © 6Apr32; K16589. Providence Lithograph Co. (PWH); 25Feb60; R252685. Jesus and His friends. © 24Jan33; K18994. Providence Lithograph Co. (PWH); 27Jun60; R258842. Jesus and His helpers in the upper room. © 14Oct32; K18037. Providence Lithograph Co. (PWH); 27Jun60; R258829. Jesus and the Sabbath. © 24Oct32; K18175. Providence Lithograph Co. (PWH); 27Jun60; R258834. Jesus chooses the twelve. © 24Oct32; K18174. Providence Lithograph Co. (PWH); 27Jun60; R258833. Jesus giving life and health. © 24Oct32; K18173. Providence Lithograph Co. (PWH); 27Jun60; R258832. Jesus ministering to Jews and Gentiles. © 24Jan33; K18995. Providence Lithograph Co. (PWH); 27Jun60; R258843. Jesus teaching the disciples about forgiveness. © 12Jan33; K18912. Providence Lithograph Co. (PWH); 27Jun60; R258838. Jesus, the Helper. © 22Oct32; K18041. Providence Lithograph Co. (PWH); 27Jun60; R258830. A man remembers to thank Jesus. © 27Apr32; K16753. Providence Lithograph Co. (PWH); 25Feb60; R252689. Missionary lesson. © 27Apr32; K16757. Providence Lithograph Co. (PWH); 25Feb60; R252691. Peter denies his Lord. © 12Jan33; K18917. Providence Lithograph Co. (PWH); 27Jun60; R258841. Repentance for a great wrong. © 23Sep32; K17835. Providence Lithograph Co. (PWH); 27Jun60; R258828. Spring has come. © 12Jan33; K18916. Providence Lithograph Co. (PWH); 27Jun60; R258840. Stewardship of life. © 8Jul32; K17331. Providence Lithograph Co. (PWH); 27Jun60; R258825.
- 31. Supper is ready. © 6Jul32; K17274. Providence Lithograph Co. (PWH); 27Jun60; R258821. Telling about Jesus. © 27Apr32; K16756. Providence Lithograph Co. (PWH); 25Feb60; R252690. They knelt down and presented gifts. © 16Jul32; K17333. Providence Lithograph Co. (PWH); 27Jun60; R258826. Thy sins are forgiven thee. © 12Jan33; K18914. Providence Lithograph Co. (PWH); 27Jun60; R258839. Working with God for food. © 1Apr32; K16575. Providence Lithograph Co. (PWH); 25Feb60; R252683.
- 32. RIZZO, ANDREW WILLIAM. Accordion bass chart. SEE Rizzo, Evelyn.
- 33. RIZZO, ANDREW WILLIAM, JR. Accordion bass chart. SEE Rizzo, Evelyn.
- 34. RIZZO, EVELYN. Accordion bass chart; advanced. For 48, 60, 80, 96, 120 & 140. By Andrew W. Rizzo. © 13Feb33; K19230. Evelyn Rizzo (W), Andrew William Rizzo, Jr. (C), Richard M. Rizzo (C), Roma G. Rizzo Komorski (C) & Claudia J. Rizzo Lanzi (C); 4Apr60; R255262.
- 35. RIZZO, RICHARD M. Accordion bass chart. SEE Rizzo, Evelyn.
- 36. ROGERS, FRANK. General Sam Houston. © 22Jun32; J12935. Frank Rogers (A); 15Mar60; R253667.
- 37. SCHULTZ, GEORGE JOHN. Child in India. SEE Cramblet, Wilbur H.
- 38. TOLL, PAULINE B. The Mother Church. SEE Curtis, Russell Wood.
- 39. WENCK, HAROLD EDGAR. Geronimo, War Chief of the Apaches. SEE Wenck, Maude L.
- 40. WENCK, MAUDE L. Geronimo, War Chief of the Apaches, by Harold Edgar Wenck. © 21Jun32; G8979. Maude L. Wenck (W); 21Jun60; R258739.
- 41. WYETH, N. C. William Penn, man of vision, courage, action. SEE Penn Mutual Life Insurance Co.
- 42. JUL-DEC 1960 RENEWALS A list of works of art, scientific and technical drawings, photographic works, and prints and pictorial works for which renewal registrations were made during the period covered by this issue. Arrangement is alphabetical under the name of the claimant of renewal copyright. Information relating to both the original and the renewal registration is included in each entry. References from the names of joint claimants and authors and from variant forms of names are interfiled.
- 43. AMERICAN BANK NOTE CO. Allegorical male head. V-72246, no. 2. © 5Sep33; K20989. American Bank Note Co. (PCB); 8Sep60; R262484. Bridge to Monastery of the Rain of Law on the sacred island of Pu- To. V-72302. © 16Dec33; K21632. American Bank Note Co. (PCB); 19Dec60; R268039. Chinese pagoda. V-72301. © 16Dec33; K21655. American Bank Note Co. (PCB); 19Dec60; R268040. Electricity no. 8. First series no. 85. V-72290. © 3Oct33; K21192. American Bank Note Co. (PCB); 5Oct60; R264124. The harvest no. 2. V-72303. © 16Dec33; K22037. American Bank Note Co. (PCB); 19Dec60; R268041. Mercury, reduction of V-42943. V-72291. © 3Oct33; K21491. American Bank Note Co. (PCB); 5Oct60; R264123. Pagoda with water scene foreground. V-72300. © 17Nov33; K21559. American Bank Note Co. (PCB); 21Nov60; R266316. Radio no. 2. V-72245. © 5Jul33; K20725. American Bank Note Co. (PWH) & Canadian Bank Note Co. (PWH); 26Jul60; R260726. Reduction of V-44149. V-72298 no. 2. © 10Nov33; K21631. American Bank Note Co. (PCB); 14Nov60; R266317. Secret d'amour, no. 2. V-72297. Reduction of V-43527. © 2Nov33; K21490. American Bank Note Co. (PCB); 3Nov60; R265426. Shanghai Power Company. Special V-72240. © 17Nov33; K21492. American Bank Note Co. (PCB); 21Nov60; R266315. Tai Shan Nan Tien Men, Prov. Shantung. V-72299. © 14Nov33; K21489. American Bank Note Co. (PCB); 16Nov60; R266122.
- 44. ATKINSON, —. The first day at school. SEE Providence Lithograph Co.
- 45. BARR, ALMA E. The grand reconciliation, by Earl G. Barr. © 13Apr33; K20123. Alma E. Barr (W); 23Nov60; R266744.
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