For more information and hours of operation, check out arcatapool.com.

The IRS will treat any “loan” with a below market interest rate (below the AFR) as a gift of the foregone interest from the lender to the borrower.  The amount of the foregone interest will be treated as though it was transferred from the lender to the borrower as a gift and retransferred from the borrower to lender as income on the last day of the calendar year.

How may this apply to the purchase of your Humboldt County business by your beneficiaries?

In making it easier for beneficiaries to purchase a business or other asset, owners often have unknowingly charged a below market interest rate to the beneficiary.  If the purchase comes to the attention of the IRS, the owner will be required to recognize the foregone interest as income and will be assessed interest and penalties on that amount.

However, the AFR is at a historically low level so the purchase of your business by your beneficiaries can be at interest rates that are more affordable to the beneficiary.   Coupling this low interest rate with the depressed values of many assets in today’s market, it is easier for a business owner to transfer a business or other asset to his/her beneficiaries at a cost and on terms more affordable to the beneficiary while still maintaining some stream of income to the owner.

While traditionally the interests of California’s corporate shareholders trumped all other corporate interests, benefit corporations can adopt environmental, social, or other public benefit policies as part of their legal charter.  This provides legal protection from claims that a corporation’s pursuit of social goals were decreasing stock values, and allows corporations to create and adhere to public benefit policies without converting to a nonprofit.

In addition to including environmental or social goals in their charter, benefit corporations must publish an annual benefit report on its social and environmental performance when compared to third party standards.  Fiduciary duties of corporate directors are also expanded to encompass environmental and social considerations.

Several advantages of benefit corporation form cited by supporters of AB 361, include broader fiduciary roles of officers and directors allowing them to pay greater attention to social and environmental considerations, greater access to certain investing due to increased accountability and established public benefit goals, and marketing opportunities arising from benefit corporations’ ability to distinguish themselves as truly committed to certain causes.

AB 361 represents a growing trend among states to aid corporations to commit and adhere to social or public benefit goals, as well as profit-based goals, and was modeled after similar successful legislation in Hawaii, Maryland, New Jersey, New York, Vermont, and Virginia.  AB 361 was signed by Governor Brown in October of last year, after receiving bipartisan support in the California Legislature.

If you or your business has questions about benefit corporations or other business entity forms, the experienced attorneys at Janssen Malloy LLP are available to assist.

Med pay is coverage under a driver’s auto liability policy which pays for medical expenses incurred as a result of an injury sustained in a motor vehicle collision.  It is a separate category of coverage under a driver’s automobile liability policy, and should not be confused with a person’s health insurance coverage (which might be through a person’s employment).

Here is how a driver’s med pay coverage works, and why it is important.  If an insured driver is injured in a motor vehicle collision, the med pay coverage in their policy (provided they have paid a premium for such coverage) applies to cover the medical expenses arising out of injuries suffered in that collision.   The med pay coverage is “primary,” meaning that it is the first avenue of coverage the insured driver should look to.  The med pay coverage should pay for medical expenses arising out of injuries from the collision, up to the limit of the coverage for which the premium has been paid.

Very often, drivers are unaware of their own med pay coverage, or are unsure how it operates, and therefore it is not used.  The benefit of the med pay coverage is that it pays for medical expenses arising out of the incident, without any copay, share of costs, or deductible (compared to a health insurance type of coverage).

Very often, medical providers (such as hospitals, doctor offices, etc.) are also not aware that the med pay coverage is primary, and will simply bill medical expenses to the patient’s health insurance coverage, especially when that information may already be in their computer database for the patient.  When that happens, the insured driver is not receiving the benefit for which they paid the premium.

When a medical provider bills a patient’s health insurance coverage rather than the med pay coverage under the patient’s auto policy, the driver is not getting the benefit of the bargain for which they paid the premium.  In this circumstance, it is a good idea to invoke the med pay coverage to reimburse the driver/patient for the share of costs/deductible/copay that may not be covered under the health insurance policy.
The premium cost for obtaining medical payments coverage in an auto policy is inexpensive, at least when compared to the premium costs for obtaining health insurance coverage.  Once a basic policy of auto liability coverage is in place, it is relatively cheap to increase the medical payments coverage.  Given the number of uninsured or inadequately insured (also called underinsured) drivers on the roadways, increasing one’s med pay coverage is a very smart economic decision.

Most drivers are overwhelmed with decisions to make once they have been injured in an automobile collision.  The Janssen Malloy LLP attorneys are well versed in how the various automobile insurance coverages operate and stand ready to assist you in answering those questions and protecting yourself, if need arises.

Read the report here:  Esquivel v. County of Humboldt  jury verdict.

To help deal with California’s budget crisis, this year’s California budget included a 10% reduction in Medi-Cal reimbursement rates for freestanding skilled nursing facilities and other healthcare providers (AB 97).  This 10% cut is scheduled to go into effect retroactively to June 1, 2011.  That cut was recently approved by the Obama administration.  The State has agreed that, on December 31, 2012, it will reimburse medical providers for the 10% that is held back, provided it has the money.

A number of cases have been filed by medical providers regarding the legality of that hold back.  The lead case is California Hospital Association v. Douglas, CV11-09078, before Judge Christina A. Snyder in the Central District.  There is presently a motion for a preliminary injunction scheduled to be heard in that action on December 19, 2011.  The State sought a stay of that hearing which was denied by Judge Snyder.

The medical providers’ argument is, essentially, that Medi-Cal reimbursement rates are so low that they lose money every time they see a Medi-Cal patient.  Any healthcare provider that receives Medicare is required to also receive Medi-Cal patients.  The response of the State is to simply say, “If you don’t want to be in the business of providing medical care, you don’t have to.”    While it may be legally correct, its position is morally corrupt.  Many providers have indicated that, if the cuts take effect, they will be financially incapable of seeing Medi-Cal patients.

This cut will not only affect skilled nursing facilities.  All medical providers will be affected.  Medi-Cal rates are already below the cost of service in numerous areas.  Cutting rates further will severely impact the care.  In nursing homes labor comprises close to 70% of a nursing home’s operating costs.  So, if rates are cut, that is where the nursing home will make up the loss.

What’s equally absurd about this cut is that Medi-Cal receives matching funds from the federal government.  So, for every dollar that Medi-Cal cuts from its program, $2.00 are lost

Food for People is Humboldt County’s Food Bank.  Again this year Janssen Malloy is a sponsor of the Holiday Food and Fund Drive, a way to assist this worthy organization to help feed those in need of food.  Proceeds from this drive are an important part of raising the funds necessary to support all of this organization’s programs.

Betty’s Blue Angels started out as one woman — Betty Chin– who took it upon herself to feed and care for those in need.  Her endeavors are now supported by volunteers and the community, including the recent building of a shower and laundry facility in Eureka for homeless people.

If you are interested in donating to these worthy organizations, you can not only find more information on these two charities at the links provided above, but you can also donate directly from the web sites.