The Legal Insider

October 2013

Meeting Obamacare’s Individual Mandate

The most important portions of Obamacare are starting to phase in. This month, states will begin opening health insurance exchange markets. These “markets,” as envisioned by the Patient Protection and Affordable Care Act, will help uninsured Americans purchase health insurance.

These markets are important because, beginning in 2014, Americans must have health insurance or pay a tax. Below are the options an individual has for dealing with this individual mandate to carry health insurance:

1.Fall Into an Exemption

There are a number of groups who do not have to purchase healthcare insurance. These groups are exempt due to certain political and/or legal complications:

First, individuals who are members of a federally recognized Native American tribe are exempt. Likewise, individuals who are eligible for healthcare under Indian Health Care Services are also exempt.

Second, prisoners and undocumented immigrants are not covered by the mandate.

Next, individuals who belong to a religion which objects to insurance coverage are exempt. Amish, Mennonite and Hutterite members are exempt. Likewise, members of health care healing ministries are exempt.

Health care healing ministries are faith-based organizations where members agree to cover other member’s healthcare costs, with a few rules and exceptions. Pregnancies outside of marriage, for instance, are not covered by these ministries.

Fourth, the mandate does not apply to individuals if the cost of premiums would exceed 8% of that individual’s household income. Similarly, household incomes which are below minimum thresholds for filing a tax return are exempt.

Finally, individuals who would be covered by the Medicaid expansion but who live in a state which refuses to expand Medicaid are also exempt.

2. Pay the Tax

We’d call it a penalty, but Chief Justice Roberts made Obamacare constitutional by calling the mandate a tax. So how much does this tax cost?

Well, that depends on a few things. First, the year is important. If you plan to pay the tax rather than purchase insurance for 2014, it is $95 per adults and $148 per child, or one percent of household income, whichever is greater. The tax will increase over time until 2016, when it will be $695 per adult and $347 per child, or 2.5% of household income, whichever is greater. This formula does not take into account the costs of healthcare if you become injured, sick or require intense healthcare while.

3.Carry Health Insurance

Obamacare divides the population into three groups: those who are exempt, those who will pay the tax and everyone else. So what options do you have if you want healthcare insurance under Obamacare?

First, individuals who have health insurance through their parents are covered. Insurance companies have a cut off age for children, but Obamacare raises the cut off age to twenty-six. Individuals who are twenty-six or less can stay on their parent’s healthcare plan.

Second, individuals who have health insurance through their employers are covered. Employees are likely to be covered by their employer thanks to the employer mandate. Employers with more than fifty employees must provide healthcare or pay $2000 times the number of full time employers beyond the first thirty. So, assuming a company has exactly fifty full time employers, the tax would be $40,000. Thirty hours of part time employment will be counted as one full time employee.

Employers with less than fifty employees are incentivized to purchase health insurance for their workers through tax credits. If a small employer pays at least half of their employees’ healthcare, the employer can receive up to a thirty-five percent tax credit.

Finally, individuals can purchase health insurance directly from health insurance companies. In order to keep prices down, states are creating exchange markets where insurance companies bid for the right to sell insurance to citizens of that state. The federal government also has an exchange market for states which do not create exchange markets.


5 Important Tips for Starting Your Own Business

Many Americans dream of breaking free from their current employer and starting their own business—where they can be their own boss, pursue a livelong passion, and make their own schedules. However, starting your own business requires a lot of preparation and hard work. Here are five things to know about starting your own business:

  1. Determining the legal structure of your business. Before you start your own business, you need to decide which business structure will be best for you. The business structure that you chose will have legal and tax implications. Common business structures include sole proprietorships, partnerships, limited liability companies (“LLC”), corporations, and S Corporations. If you want to start an LLC or corporation, you must register your business with your state government.
  2. Choosing and registering your business name. An important step in starting your business is choosing and registering your business name. You should pick a name that is unique and reflects your brand identity. Before you chose a name, however, you should make sure that it is not already trademarked. If your business is a sole proprietorship or partnership, you will need to register your business name through a process known as registering your “Doing Business As (DBA)” name.
  3. Financing your business. Before you can start your own business, you need to know how you are going to pay for it. Some common methods of financing your business include getting a loan from the U.S. Small Business Association, attracting an angel investor, getting a bank loan, and raising money from your family and friends.
  4. Understanding your federal, state, and local tax obligations. Businesses are generally liable for federal, state, and local taxes. Your business’ legal structure determines what federal tax forms you will need to file. Local and state tax obligations vary from place to place, but nearly every state levies a business or corporate income tax. Like federal tax, your business’ legal structure determines your state tax requirements.
  5. Hiring employees. Before you can hire your first employee, you will need to familiarize yourself with federal and state hiring requirements. For instance, you will need to know how to obtain an employee identification number (EIN) from the IRS, how to verify an employee’s eligibility to work in the United States, and how to set up records for withholding taxes. You should also learn how to conduct an employee background check. Quality employees are the backbone of a successful business, so you want to make sure that you pick the right ones!

Workers’ Compensation Claims: A Checklist for Employees

It can sometimes be difficult to deal with an on-the-job injury. Some workplace injuries can render a person unable to perform basic functions. Filing for workers’ compensation or a legal claim can be difficult to do if you’re not prepared. While some on the job injuries just can’t be anticipated, handling a workers’ compensation claim can be a lot easier if you have a checklist to guide the process.

Here’s a brief workers’ compensation checklist for employees:

What to do immediately after the injury:

  • Seek first aid or medical treatment (failure to do so can reduce your chances of recovering a settlement award)
  • Notify your supervisor and the company’s human resources department
  • File your workers’ comp claim as soon as you are able to do so
  • If you suspect that you will be unable to attend work, try to establish a contact person to assist you with your claim. Use a power of attorney if needed

What to do within the first few weeks:

  • Follow-up with your company’s claims department to ensure that your workers’ compensation claim is being processed
  • Continue with any prescribed medication or rehabilitation (again, failure to follow medical recovery programs can hinder your chances)
  • Coordinate with company management for initial compensation payments

What to do after a month or two:

  • Inform employers or supervisors of any updates, progress, or delays in your rehabilitation
  • Begin coordinating plans for your return to work (if applicable)
  • Check to see whether the conditions that caused your injury have been corrected or remedied

Also, you will want to collect vital information from several groups of people. This will include names, contact information, licensing numbers, and short summaries of their relation to the injury claim. Be sure to gather as much information as you can from persons such as:

  • Employers
  • Supervisors (especially those who were assigned to you when the injury occurred)
  • Doctors, physicians, surgeons, therapists, and other medical professionals
  • Any witnesses who can provide oral or written statements in support of your claim

In many cases, a workers’ compensation claim can be handled directly through the company’s internal mechanisms. However, it can sometimes happen that a lawsuit becomes necessary to resolve a specific dispute. In case your claim needs to go to court, completing the above checklist can be a big help when it comes to organizing information before trial starts. It’s important that you take immediate action. A delay or a failure to take action can cause problems with filing deadlines, statutes of limitations, and other procedural issues.


Receiving Compensation for a Hit and Run Accident

Hit and run accidents are auto accidents where the offending party flees the scene without leaving contact information. Although most hit and run cases occur at intersections or in parking lots, some cases involve high-speed collisions and cause considerable damage or serious injuries. Hit and run cases can also involve pedestrians and bicyclists, or damage to stationary property (such as a wall, post, or building structure).

As the Victim of a Hit and Run, How Can I Receive Compensation?

The first challenge lies in locating the person responsible for the accident. The police may be able to locate the guilty party through eyewitness accounts or photos from security cameras.

If the guilty party is found, a new challenge arises in collecting the appropriate funds from the driver’s insurance company. Quite often, hit and run drivers do not have the proper insurance or sufficient assets to pay for the damage. You may seek to file a civil lawsuit in order to recover the proper funds from the guilty driver and his or her insurance company.

In the event that you cannot locate the guilty party or are unable to collect the proper funds, you may be able to receive compensation from your own insurance policy. If your policy includes collision coverage or medical coverage, you should be able to receive compensation after filing your claim.

Remember to always call the police first before contacting your insurance company. In filing your claim, your insurance agent will need to review the police report.

You may wish to hire a lawyer if you need assistance in filing a claim for a hit and run incident. Your attorney can represent you in court and help you obtain a damages award or other appropriate legal remedies for your case.


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