U.S. Department of Labor and IRS Extend COBRA Deadlines

U.S. Department of Labor and IRS Extend COBRA Deadlines

Amid the COVID-19 pandemic, Wisconsinites, along with the rest of the nation, have endured sudden and severe job loss.  As of May 14, 2020, the University of Wisconsin Center for Research on the Wisconsin Economy estimated the Wisconsin unemployment rate to be 21.9%.  In addition to the significant financial losses that attend such massive changes in employment status, job loss often results in the loss of health coverage.  Recent data indicates that roughly 57% of Wisconsin’s non-elderly population (i.e., non-Medicare) obtain their health insurance through an employer.

As many are familiar, one of the health insurance options available to those who lose their employment and employer provided health insurance is to apply for COBRA, which allows an employee and his or her dependents to maintain coverage at their own expense by paying the full cost of the premium.  Of course, there are certain deadlines that apply to seeking COBRA coverage.  Normally, a person has 60 days from the date of receipt of the COBRA notice to elect COBRA (election period), and then 45 days after the date of COBRA election to make the initial premium payment (premium payment period).

However, with the sudden and massive job losses due to the COVID-19 pandemic, on May 4, 2020, the U.S. Department of Labor and the IRS extended these standard COBRA deadlines.  Under the new rule, many COBRA deadlines are extended beyond the “Outbreak Period,” which is defined as March 1, 2020, to 60 days after the end of the National Emergency declaration.  The relief specifically directs all group health plans subject to ERISA or the IRS Code to disregard the period from March 1, 2020, through 60 days after the announced end of the national emergency when determining certain periods and dates, including the election period for COBRA continuation coverage and the date for making COBRA initial premium payments.

These changes are a welcome acknowledgment by these entities that the huge societal upheaval caused by the pandemic has made meeting standard deadlines increasingly difficult.  Feel free to contact one of our employment attorneys with any questions or concerns.  Be well and stay safe.

 

Take it Easy on the Beers While Riding a Lawn Mower

Take it Easy on the Beers While Riding a Lawn Mower

If you are like me, after mowing the lawn and job well cut, you may enjoy a cold refreshing adult beverage.  With that frosty refreshment in mind, I stumbled upon a recent, and unique, Wisconsin Court of Appeals decision that held that a riding lawn mower is a “motor vehicle” for purposes of Wisconsin’s Operating While Intoxicated (OWI) statute.  Since we are in the doldrums of winter, I figured the case was worth a share as a humorous public service announcement during these dark and cold days.

In the recent State v. Shoeder case, following his departure from a local tavern, the defendant was arrested for an OWI while he was operating a riding lawn mower on the shoulder of a public roadway.  The defendant moved to dismiss the charge, arguing that a riding lawn mower is not a “motor vehicle” within the meaning of the OWI statute, and instead it was more akin to Wisconsin’s definition of an “all-terrain vehicle” (OWI while on an ATV had different penalties).  The trial court and Court of Appeals disagreed with the defendant’s position.

In reaching its decision, the Court of Appeals looked at the definitions of “motor vehicle” and “vehicle.”  Under Wisconsin law, a “motor vehicle” is any vehicle that “is self-propelled, except a vehicle operated exclusively on rail.”  Crucial to the decision was the broadly defined “vehicle,” which includes “every device in, upon, or by which any person or property is or may be transported or drawn upon a highway, except railroad trains.”  Wis. Stat. § 340.01(74).

Applying these definitions to the defendant’s chosen conveyance, the court determined that the riding lawn mower was a “motor vehicle” and “vehicle;” it is self-propelled and a device on which a person may be transported on a highway.  The court further rejected the defendant’s argument that the riding lawn mower should be considered an “all-terrain vehicle,” as it did not meet the ATV definition requirement of being “equipped with a seat designed to be straddled by the operator.”  Wis. Stat. § 340.01(2g).

It is important to highlight a very important fact that led to this defendant’s predicament:  He was using the riding lawn mower on the shoulder of a public roadway.  As with any OWI in Wisconsin, the operation must have taken place on a public roadway or highway; a homeowner’s lawn is not going to be considered a public roadway for purposes of the OWI statute should someone make the mistake to over imbibe.   That all said, the safest route is to limit your beer consumption to when you are done cutting the lawn and are sitting back enjoying the fruits of your labor.

 

Which Insurance Companies Do I Have to Talk to After an Auto Accident?

Which Insurance Companies Do I Have to Talk to After an Auto Accident?

Following an auto accident, victims are often bombarded with calls from claims personnel connected with various insurance companies asking how the accident happened and what injuries were sustained. Usually, there are three different insurance companies trying to get information: (1) the liability insurer for the at-fault driver, (2) your own auto insurance company and (3) your health insurance company.

The insurance company you have no obligation to speak to and who we recommend you do not speak to is the liability insurer for the at-fault driver. Almost without fail, soon after an accident, injured drivers will receive a call from a claims person from the responsible party’s insurance company. This claims person will likely be recording the conversation and will ask questions about how the accident occurred and what injuries were sustained; rarely is this to your benefit. Being only a few days out from the collision, the injured victim will not have the police crash report and investigation findings, will have only been discharged from urgent care or the ER and not had an opportunity to see their doctor or a specialist for their injuries. In other words, the injured victim usually does not know the full extent of their injuries or the details of the accident.

In spite of this information deficit, the at-fault insurance company will use this opportunity to lock you into how the collision occurred and what your injuries are all without the benefit and protection of counsel. This is a statement that may be used against you at future depositions and trial. Worse still, there are some insurance companies who use this early opportunity to pressure you into a accepting a settlement offer.

On the other hand, you do have a duty to communicate and cooperate with your own auto insurance and your health insurance company. Your insurance policies have specific terms and conditions that you must abide by, one of which is that the insured has a duty to cooperate and inform the insurance company about the loss (i.e. the collision and your injuries). If you choose to ignore your own insurance companies, you risk them not paying for medical treatment related to the collision and possibly risk your uninsured and underinsured motorist coverages should you need them. We are often told by our clients that one of the services they appreciate most is our office’s ability to force all insurance companies to run their questions, forms and requests through our office which we handle. This allows our clients to focus on the most important thing after an accident: getting better.

 

Using a Special Needs Trust to Ensure Your Settlement Does Not Affect Public Benefits

Using a Special Needs Trust to Ensure Your Settlement Does Not Affect Public Benefits

In Wisconsin, Medicaid (sometimes also called Medical Assistance) covers 1 in 9 adults and 1 in 3 children; in fact, 16% of the Wisconsin population gets its health care coverage through Medicaid.  Unlike the similar sounding Medicare, Medicaid is a means tested, needs-based health care coverage program, which means there are various income and asset limits that determine a person’s, or his/her family’s, eligibility.

By virtue of being a means tested program, Medicaid eligibility can be affected by receipt of funds, such as a personal injury settlement, if proper steps are not taken.  For example, to qualify for Medicaid, a single person can have no more than $2,000 in total countable assets.  If that Medicaid recipient receives a personal injury settlement of $25,000, he or she is going to be above the asset limit and at risk to lose Medicaid coverage.  Considering the exorbitant cost of medical procedures and medications, the loss of Medicaid coverage, or any needs-based benefits, can be devastating.

No injury victim should face the choice of being fully and fairly compensated for his or her injuries versus keeping his or her health care coverage.  Such a harsh outcome can be avoided by transferring the settlement funds to a properly drafted “special needs trust.”  Under normal rules, if a Medicaid recipient gives away or transfers assets to someone else, or to a trust, this results in disqualification from Medicaid (a penalty period).  A special needs trust is a type of trust that is specifically allowed under the Medicaid rules as an exception to the asset transfer rule.  A Medicaid recipient can transfer assets to a special needs trust without disqualification, and the recipient will no longer be over the asset limit.  Although the injury victim no longer has access to the funds, the trustee of the special needs trust can make distributions for his or her benefit, and there will be no loss of public benefits.

For example, our hypothetical accident victim, Courtney, receives a $25,000 settlement but is on Medicaid and Social Security Income (SSI), which are public benefits with asset limits.  Courtney wants to save this money for a car (a non-countable asset) or other items but is not sure what she would like to purchase.  If she is going to stay on public benefits, she only has ten days to report that she has received the money, and then will receive a notice that her benefits will be terminated.  Instead, Courtney’s attorney creates a special needs trust for Courtney, naming her mother as the trustee.  Courtney transfers the $25,000 to the trust without any disqualification for public benefits.  Later, Courtney decides she wants to buy a car with the settlement proceeds.  The car is bought and paid for by the special needs trust; the funds to buy the car come directly from the special needs trust, not Courtney.  Courtney gets her car and continues to receive Medicaid and SSI.

It is important to remember that Medicaid and SSI are just a couple examples of means tested/needs-based public benefits that could be affected by receipt of personal injury settlement funds.  This all serves to highlight the risk of going it alone following an accident or injury, as well as the need to hire a skilled attorney.  To be sure, when the insurance adjuster is pressuring you to settle your claim, the insurance company is not going to care whether the settlement will cause you to lose your public benefits.

 

Children Moving Out?  Make Sure They are Still Insured

Children Moving Out? Make Sure They are Still Insured

Often families with teenage drivers living at home do not have those teenage drivers listed as named insureds on the auto insurance policy.  Frequently, Mom and Dad are the named insureds on the insurance policy and all the vehicles are listed, and the teenagers qualify for coverage by virtue of being related to Mom and Dad and living in their home.  This type of familial relationship coverage for the teenage drivers usually has a special term of art in the insurance policy, such as “resident relative,” “member of same household” or “resident of your household.”

While each insurance company defines their terms differently, generally speaking, this type of familial coverage means that drivers who are living with their parents qualify for insurance coverage even though they are not the “named insureds” on the auto insurance policy.  This type of coverage is usually defined as a person related by blood (or adoption) to the named insured and living with the named insured; some insurers may limit this category to minor children only, but others may include adult children as well.

The reason this topic is being raised, is that sole reliance on resident relative coverage can create potential problems when that child moves away from home (goes to college or armed forces) or splits time between two homes (divorced parents).  Hopefully, a hypothetical will illustrate.

Billy is a hypothetical 18-year-old high school senior living with Mom and Dad.  The family has a hypothetical auto insurance policy that lists Mom and Dad as the named insureds and covers both of the family vehicles.  While Billy is not a named insured on the policy, by virtue of being related by blood to Mom and Dad and living in the same household with them, he qualifies as a resident relative insured, even as an 18-year-old.

Billy graduates from high school and goes off to college in another city; he is no longer living with Mom and Dad, nor is he listed as a named insured under any other auto insurance policy.  While at college, Billy gets injured in a terrible auto wreck while riding in a friend’s car.  Unfortunately, the at‑fault driver does not have sufficient insurance (or worse, no insurance at all) to cover Billy’s extensive injuries and damages.  However, Billy and his parents think that Billy should have underinsured motorist coverage available to him under Mom and Dad’s auto policy.

The problem is, Billy may no longer qualify as an insured under Mom and Dad’s auto policy.  Billy was never a named insured, the crash did not involve Mom and Dad’s cars, and Billy may no longer qualify as a resident relative.  Because Billy was not living with Mom and Dad at the time of the car crash, he may not qualify as a resident relative anymore.  Whether Billy qualifies for coverage under Mom and Dad’s policy will depend on the policy’s definition of resident relative and Billy’s precise living situation at the time of the wreck.  Had Billy completely moved out or did he leave his furniture and personal belongings at home?  Where was he getting his mail, or what was his voting address?  Regardless of the facts, by virtue of no longer living under the same roof with Mom and Dad at the time of the wreck, the insurance company will likely argue that Billy does not qualify as an insured.

You and your family, can avoid being left in this limbo by making sure your children who are leaving and not getting their own auto insurance are specifically listed as named insureds on your auto policies.  That way, if they are injured in a car wreck, they can have the benefits and protection of the uninsured and underinsured (if underinsured was purchased, and it should be purchased) coverage.