1. Social Insurance Chapter 11

2. Programs Social Security Medicare Unemployment Insurance Workers Compensation

3. Workers Compensation- History Employer liability laws –Need to prove employer’s negligence –Common law defenses Contributory negligence Fellow servant rule Assumption of risk

4. Workers Comp - Principles Absolute liability Partial but final indemnity Periodic payments Part of the cost of operations Mandatory insurance

5. Benefits Medical expenses Disability –Total/Partial –Temporary/permanent Survivor’s death benefits Rehabilitation

6. Features Employee cannot sue Benefits, coverage vary from state to state Benefits are mandated Some states have second injury funds Some states cover disability not related to the job (Compulsory Temporary Disability Laws)

7. Social Security/Medicare Old-Age, Survivors’, Disability, and Health Insurance Pay roll tax (15.3%) Pay as you go system Social security trust funds –Old age and survivors –Disability –Hospital insurance –Supplementary insurance

8. Loss of benefits Dependency status Other income –Exempt income (pension, investment income) Taxation of benefits –Does not go into general revenue

9. Challenges Can the system go broke? Ratio of workers to retirees Political decision making

10. Unemployment insurance State plans Rationale for insurance Market failure argument “Employer paid” taxes Experience rating