What does FICA stand for?

FICA stands for the Federal Insurance Contributions Act. This legislation was enacted to fund Social Security and Medicare programs through a payroll tax imposed on both employees and employers. The contributions collected under FICA are essential for providing benefits such as retirement income and health care coverage for eligible individuals.

The act ensures that workers contribute to the social safety nets, thereby establishing a system of financial support for those who retire, become disabled, or face medical challenges. The other choices do not accurately reflect what FICA stands for; therefore, they cannot be used to describe the legal framework that governs the funding of these vital government programs.