How Does COBRA Work With Obamacare?

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Last week, the federal Department of Labor issued proposed regulations dealing with COBRA notices. The regulatory proposal is quite uninteresting: Basically, the administration is removing the model notices from the Code of Federal Regulations and providing them instead on the Department of Labor’s website. This allows the notices to be changed much more quickly and easily, without resort to the federal rulemaking process.

The Labor Department also posted the new model versions of these notices: The general notice employees receive when they sign-up for employer-provided healthcare, and the election notice employees receive when a qualifying event occurs and they have to actually decide whether or not to continue their health insurance through COBRA. (You can find links to both new versions at the DOL’s COBRA Continuation Coverage page.)

The changes to the notices mostly involve Obamacare: specifically, the interface between Obamacare and COBRA. The notices explain that employees (and other beneficiaries) who are losing their employer-provided coverage may continue that coverage for at least 18 months by paying the full premium, pursuant to COBRA. However, employees also have the option of foregoing COBRA coverage and instead buying insurance through the Health Insurance Marketplace.

Ordinarily, anyone who wants to buy insurance on the Marketplace must wait for an open enrollment period. One just closed; the next one doesn’t start until mid-November. So what if you get laid off between now and then? The new notices explain that there is a 60-day “special enrollment” period triggered by losing job-based coverage. In other words, a laid-off employee has 60 days to choose a new health plan through the Marketplace; the same 60-day period applies to choosing COBRA coverage.

The new election notice provides some good answers to questions about switching coverage, too:

      1. If you choose COBRA coverage, but decide you want to buy through the Marketplace instead, you may do so during the initial 60-day special enrollment period. If you miss this deadline, you’ll have to wait until open enrollment rolls around, just like everyone else (unless you have a second event that triggers a special enrollment period, like having a child).
      2. If you choose Marketplace coverage, but decide you should have taken advantage of COBRA, you are out of luck. Once you decline COBRA coverage, it’s gone.
      3. Once your COBRA coverage ends, you get another 60-day special enrollment period in which to sign up for Obamacare.

 

Written By: Lisa Guerin

Justin Bieber’s Immigration Woes. Again. (Sorry)

Demonstrating for Justin Bieber

Justin, please tell me you didn’t get into legal trouble again.

I say that not because I’m in a moralizing mood, and not because I’m worried about what kind of example you’re setting for your fresh-faced, adoring fans.

No, I say that for one, much simpler reason.

I thought I was done writing about whether your various run-ins with U.S. law enforcement make you, as a non-citizen visa holder, deportable. Intellectually and emotionally, I am over it.

But now readers are asking, “So, is he deportable this time? The LAPD are going after him for attempted robbery! How ‘bout it? ”

Alright, here goes.

Justin’s latest “oops” was apparently grabbing a woman’s cell phone in order to erase photos that he suspected she had taken of him. (‘Cause who wouldn’t want to snap photos of the Biebs?)

If that doesn’t sound like robbery to you, read Nolo editor Micah Schwartzach’s analysis, “Breaking Down Bieber’s Alleged Attempted Robbery.”

Noncitizens of the U.S. can be deported if they commit certain types of crimes, found in Section 237 of the Immigration and Nationality Act (I.N.A.). Although some crimes are named on that list, attempted robbery isn’t one of them (nor is regular robbery.)

However, his lawyers would also want to look at whether the robbery conviction (if it indeed happens, and depending on the details) meets any of the following criteria for deportability found in the I.N.A.:

  1. crime involving moral turpitude that was committed within five years ) after the date of U.S. admission and is punishable by a sentence of at least one year
  2. one of two or more crimes involving moral turpitude that took place at any time after U.S. admission, where the two crimes did not arise out of a single scheme of misconduct, or
  3. an aggravated felony committed at any time after U.S. admission.

As explained further in the links provided above, the short answer is that, once again, he’s probably not deportable. Unless, that is, he gets a one-year sentence for grabbing a cell phone. Stay tuned!

Wait, no, don’t stay tuned to hear it from me. That’s it. My last blog on Justin Bieber. I swear it.

 

Written By: Ilona Bray

Teen Sues Parents for Financial Support and Tuition

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Last week we saw a flurry of news reports regarding Rachel Canning’s lawsuit against her parents for child support and school tuition. Much of the media focus has been on Rachel’s “bad girl behavior,” rather than the legal framework or claims in the case.

While details are scant, what we do know right now is that on March 4, 2014, Judge Peter Bogaard decided there was no exigent circumstance (emergency) that would require the immediate payment of financial support or high school tuition.

It looks like the court denied Rachel’s request for tuition because Rachel’s high school promised to cover the cost of her final semester. The judge also found no basis to order emergency financial support. This could be because Rachel’s basic needs are currently met – she’s living with her best friend’s parents (who are apparently funding her lawsuit), and she has a job and therefore, some independent income.

Judge Bogaard ordered Rachel and her parents to return on April 22, 2014 for a full hearing, which will likely include witness testimony and documentary evidence. At that hearing, the judge will decide the major issues in this case – whether Rachel’s parents must provide some financial support and/or pay her college tuition.

In most states, this type of lawsuit would not get very far because children are generally considered emancipated (independent from their parents) when they turn 18 and/or or finish high school. Once emancipated, a child is no longer legally entitled to his or her parents’ financial support. New Jersey is among a minority of states where age does not automatically confer an emancipated status.

Again, details of the legal claims in the case are few, but it seems safe to assume some portion of this legal battle will focus on whether or not Rachel is emancipated.

How Courts Decide if a Child Is Emancipated

 

New Jersey courts do consider a child’s age in determining emancipation, but age is certainly not the only factor that comes into play. Although there’s a presumption that a child becomes emancipated at the age of 18, this presumption can be rebutted (overcome) by showing that the child has not reached a truly independent status. (The query is different for deciding whether a child under 18 is emancipated).

Under a long line of New Jersey cases, courts in the Garden State will consider several factors when deciding whether an 18-year old is emancipated, including:

  • the child’s needs
  • the child’s interests
  • the child’s independent resources
  • the family’s reasonable expectations
  • the parents’ and the child’s financial abilities, and
  • any other factor the court believes is relevant to the decision.

(See Dolce v. Dolce, 383 N.J. 11, 18 (2007), citing Newburgh v. Arrigo, 88 N.J. 529 (1982).) 

Covering College Tuition

 

If Judge Bogaard decides Rachel is emancipated, her parents’ duty to provide support ends. If not, the next decisions will focus on an amount for support and college tuition.

In New Jersey, there’s a strong trend towards requiring parents, if they are financially capable, to pay for college expenses. When making this decision, a judge will take several factors into account, including:

  • the reasonableness of the expectation for higher education
  • the amount sought by the child for the cost of the higher education
  • the parent’s ability to pay that cost
  • the relationship of the requested contribution to the kind of school or course of study sought by the child
  • both parents’ financial resources
  • the child’s commitment to, and aptitude for, the requested education
  • the child’s financial resources, including assets held individually or in custodianship or trust
  • the child’s ability to earn income during the school year or on vacation
  • the availability of financial aid in the form of college grants
  • the child’s relationship to the paying parent, including mutual affection, shared goals, and  responsiveness to parental advice and guidance, and
  • the relationship of the education sought to any prior training and to the child’s long-term goals.

In this case, the media has focused primarily on Rachel’s relationship to her parents and her responsiveness (or unresponsiveness) to their parental advice. While this is certainly an important factor, it’s only one of many the court may consider on April 22.

It’s impossible to read the tea leaves, and the judge seems to take issue with both sides. He’s been quoted as having admonished Rachel for her unruly behavior and her parents for how they handled the situation.NPR reports that the judge told the Cannings they “should have tried to get help for their daughter instead of cutting her off.”

So, despite reports implying Rachel lost her case, the major issues have yet to be determined. The April 22 hearing will be the one to watch in terms of understanding more about both sides’ legal claims and any precedent-setting outcomes from the New Jersey court.

See DivorceNet.com’s section on Child Support for more information about child support laws in your state.

 

Written By: Lina Guillen

Getting Rid of Private Student Loans in Bankruptcy: Will Congress Change the Law?

 

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A bill that would allow people to wipe out private student loans in bankruptcy might be gaining momentum in Congress. Although the Private Student Loan Bankruptcy Fairness Act of 2013 (H.R. 532) has been kicking around since January 2013, recent activity indicates that some representatives in Congress are still interested in leveling the playing field between private student loan lenders and borrowers. But unless the bill becomes law, the private student loan industry will continue to have their cake, and eat it too.

The History of Private Student Loans in Bankruptcy

 

Before 2005, bankruptcy law treated private student loans just like other unsecured debt such as credit card debt and medical bills. This meant that if you filed for bankruptcy, in most cases you could discharge all of your private student loan debt. (There were a few exceptions, for example if you engaged in fraud.)

That all changed with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In one fell swoop, Congress lumped private student loans together with federal student loans. That means that if you file for bankruptcy today, you can only discharge private student loans if you prove that repaying the debt would cause you an undue hardship. This is a very difficult standard to meet. (Learn more about the undue hardship test for student loans.)

Why Private and Federal Student Loans Should Not Be Lumped Together

 

Federal student loans and private student loans are very different. If you apply for a federal student loan, the government does not take into account your credit history or ability to repay the loan (with one exception – you cannot get a federal PLUS loan if you have an adverse credit history). Nor do those factors affect your interest rate. Because interest rates are capped for federal loans, even if you are a very poor credit risk, the government cannot assess more than the capped rate. Interest rates for federal student loans are usually lower than the prevailing market rate for unsecured debt, and often much lower than the average interest rate attached to private student loans.

Private student loan lenders, in contrast, function like other unsecured creditors. Like credit card companies, private student loan lenders can choose to lend to you, or not. If you have bad credit, they’ll hedge their risk by charging you a very high interest rate.

Federal and private student loans are different when it comes to repayment as well. Borrowers of federal loans can avail themselves of a number of flexible repayment plans. These programs allow borrowers to stretch out payments, reduce monthly payments to an amount based on income, wipe out portions of debt by working in certain fields, and more. In some cases, borrowers can pay little to nothing for many years, and then have the remaining debt forgiven. (Learn more about the various repayment programs for federal student loans.)

If you have private student loans, none of these programs are available to you. If you are struggling to make monthly payments, you can try to work something out with your lender. But there’s nothing that will force the lender to negotiate with you. If you want to reduce your payment, stretch out payments, get a lower interest rate, or the like – good luck.

It doesn’t seem fair that private student loan lenders get special treatment in bankruptcy. We don’t provide the same privileges to other lenders, like car loan lenders or credit card companies. So private student loan lenders can charge extremely high interest rates, refuse to lend to people with poor credit histories, require cosigners, but still get protection from discharge in bankruptcy. Essentially, they can have their cake and eat it too

Is Congress Catching On?

 

In 2013 representative Cohen, along with 14 other congress members, introduced the Private Student Loan Bankruptcy Fairness Act (H.R. 532). HR 532 would remove the special treatment that private student loans currently get in bankruptcy, and put them on the same level as other unsecured creditors. If this bill became law, bankruptcy filers would be able to discharge private student loan debt in bankruptcy.

Sounds great. But unfortunately, according to Govtrack.us, the bill has a 2% chance of becoming law (ouch). Which is not surprising, given the track record of Congress of late. Plus, it’s been sitting around since January of 2013.

A Glimmer of Hope?

 

It may be too early to give up though. In March (in large part due to some effective pushing by members of the National Association of Consumer Bankruptcy Attorneys) an additional five representatives joined as cosponsors (bringing the tally to 39 in all). Does this mean the bill is gaining momentum? Let’s hope so.

 

Written By: Kathleen Michon

Recording Donald Sterling’s Racist Comments: A Crime?

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A crime may have been committed when Donald Sterling implored V. Stiviano not to publicly associate with minorities—but not by the shamed Los Angeles Clippers owner. (The government can’t punish Sterling for that kind of speech, but the NBA can. (See An Actual Example of Free-Speech Infringement.))

Stiviano, a 31-year-old employed as Sterling’s “archivist” but rumored to be his mistress, apparently recorded the inflammatory conversation in September of last year. In it, Sterling utters several statements that, when stripped of social media references, appear to be from the segregation era:

“I’m just saying, in your lousy f—ing Instagrams, you don’t have to have yourself . . . walking with black people. Admire him, bring him here, feed him, f— him, I don’t care. You can do anything. But don’t put him on an Instagram for the world to have to see so they have to call me.”

A Crime to Record

 

In many states, it’s perfectly legal for someone to record a conversation without the other interlocutor’s consent. (See Can I legally record a conversation between myself and another person?) Roger Clemens, the allegedly steroidal baseball player, famously taped a phone conversation with his accuser without disclosing that he was doing so. Clemens and his lawyer then happily played the tape for the media, since the law in Texas and New York—where Clemens and the accuser were during the conversation—allowed for the recording.

But California, the situs of the discussion between Sterling and Stiviano, is different. There, it’s typically a crime to “eavesdrop upon” or “record” a confidential conversation with an “electronic amplifying or recording device” “without the consent of all parties.” (Cal. Penal Code § 632.) Under Penal Code section 632, a communication is confidential if the circumstances reasonably suggest that any party to it wants it to stay private. The crime of non-consensual recording is a wobbler, meaning that it can be treated as a misdemeanor or felony.

In a representation that doesn’t pass the smell test, Stiviano’s attorney claims that Sterling consented to the recording. If that’s true, then the Instagram star is in the clear. If it isn’t, she has almost certainly committed a crime, though prosecutors might not go after her for fear of bad publicity. And even if they did file charges, Stiviano probably wouldn’t do any jail time.

Kept out of Court?

 

There’s another angle to this kind of surreptitious recording: It isn’t admissible in court, other than to prove a violation of section 632. That means that no current or future California litigant would be able to use the conversation against Sterling. Even if relevant, it wouldn’t, for example, be admissible in the course of the pending lawsuit by Sterling’s wife against Stiviano. (Rochelle Sterling has sued Stiviano in an attempt to recoup over $2.5 million in gifts from her husband to his “girlfriend.”) Nor could it be used to prove Sterling’s racial bias in suits by victims of his reported slumlording.

All of this means that a lot hinges on whether Sterling had any idea that Stiviano was recording his fateful comments. His reputation may have already be sealed, but the legal consequences of this embarrassment remain to be seen.

 

Written By: Micah Schwartzbach