A maximum earner in 2010 has 10 weeks of temporary total disability. What is the reserve amount for indemnity?

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

A maximum earner in 2010 has 10 weeks of temporary total disability. What is the reserve amount for indemnity?

Explanation:
Temporary total disability indemnity reserves are calculated as the number of weeks of indemnity times the weekly indemnity rate. The weekly rate is two-thirds of the employee’s average weekly wage, limited by the maximum weekly benefit allowed in the year. For a maximum earner in 2010, the maximum weekly indemnity is $986.69. Over 10 weeks, the reserve would be 10 × 986.69 = 9,866.90. Therefore, the correct reserve amount is 9,866.90.

Temporary total disability indemnity reserves are calculated as the number of weeks of indemnity times the weekly indemnity rate. The weekly rate is two-thirds of the employee’s average weekly wage, limited by the maximum weekly benefit allowed in the year. For a maximum earner in 2010, the maximum weekly indemnity is $986.69. Over 10 weeks, the reserve would be 10 × 986.69 = 9,866.90. Therefore, the correct reserve amount is 9,866.90.

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