New Regulations on
Preneed Funeral Arrangements
Written By:
Jeffrey A. Marshall
, CELA*
The State Board of Funeral
Directors has issued proposed new regulations governing
preneed funeral contacts. Preneed regulations have not been
updated since 1991. The
Funeral Board decided an update was needed to bring them into
line with existing practices in the funeral industry and to
improve consumer protections.
Prior regulations did not address the issue of transferability of funds
when a funeral director other than the contracting funeral
director provides funeral services and merchandise or the
ability of a customer to change funeral directors or transfer
funds in the event of a change of funeral directors.
Prior regulations also failed to adequately address the
cessation or acquisition of a preneed funeral business.
Here are some highlights of the newly proposed
regulations.
When the new rules take effect, every preneed contract will have to be
in writing. A
funeral director will have to deposit money received under a
prepaid contract into escrow or trust within 10 days of
receipt. A funeral director performing under a preneed
contract will be prohibited from charging or collecting any
fee that exceeds the fees set forth in the funeral director's
current price list at the time the service or merchandise is
provided.
The new regulations will govern transfers of preneed funds to another
funeral director or funeral entity. Every preneed funeral
contract entered into after the effective date of the
regulations will have to expressly permit the customer to
transfer the funeral account and funds to another funeral
director or funeral entity of the customer's choosing.
A funeral director will be required to forward the
entire amount of preneed funds to the other funeral director,
including both principal and interest earned, within 30 days
of notice from the customer. The funeral director will be
prohibited from collecting a fee for funeral goods or services
that have not been provided or for the cancellation.
A funeral director ceasing preneed business will be required to notify
each customer and provide each customer with the opportunity
to transfer the preneed funds to another funeral director of
the customer's choosing. A funeral director closing a business
will be required to submit a report showing how all funds were
distributed.
At this point the regulations are in “proposed” status.
They will not be effective until finalized after a
comment period and review by the Independent Regulatory Review
Commission. Interested
persons are invited to submit written comments, suggestions or
objections regarding this proposed rulemaking to Michelle T.
Smey, Administrative Officer, State Board of Funeral
Directors,
P. O. Box 2649
,
Harrisburg
,
PA
17105-2649
within 30 days of
August 25, 2007
. Reference
No. 16A-4815 (Preneed funeral arrangements) when submitting
comments.
A
copy of the proposed regulations are available at the
following link [37 Pa.B. 4643]:
http://www.pabulletin.com/secure/data/vol37/37-34/1549.html
For
information on the history of litigation and prior proposed
rulemaking that led to these new proposed regulations on
pre-need funeral arrangements, see Attorney Neil
Hendershot’s blog at the following link:
"Preneed
Funeral Contracts" in PA
(
08/26/07
).
Attorneys
Marshall
can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Home Health Care
Provider Fined for Defrauding the Elderly
Written By:
Jeffrey A. Marshall
. CELA*
A
Pennsylvania
provider of home care services has been fined by the
Pennsylvania Attorney General for deceiving consumers. The
matter is discussed in an Attorney General’s office press
release that states:
HARRISBURG
- A Pennsylvania-based home health care provider has reached
a $259,000 settlement with the Attorney General's Elder Abuse
Unit for defrauding elderly consumers by misrepresenting the
actual service it provided to its customers.
Attorney
General Tom Corbett said the agreement was reached with Homeward
Bound Services, Inc., which is based in
Drexel Hill
, and its affiliates.
From
1999 to 2005, Homeward Bound allegedly deceived elderly
Pennsylvanians into purchasing a non-medical home health care
service program by marketing it as a long-term care insurance
policy.
"Homeward
Bound deliberately deceived elderly Pennsylvanians living on a
fixed income by selling them a product they believed would keep
them from entering a nursing home or assisted living
facility," Corbett said. "It is appalling to
believe that a company could prey on the fears of some of our
most vulnerable citizens to line its own pockets."
Corbett
said Homeward Bound allegedly used current and former insurance
agents to market and sell its non-medical home care program to
elderly consumers who did not qualify for or were looking for a
cheaper alternative to long-term care insurance.
According
to the Assurance of Voluntary Compliance (AVC), the
"Assisted Living Service Agreement" promised to
provide similar benefits and protections as long-term care
coverage, such as meal preparation, cleaning, laundry, grooming,
bathing, etc., but with easier access. However, Homeward
Bound did not directly provide these services, and instead
contracted with third-party providers and would only pay for
services that were pre-authorized.
Corbett
said Homeward Bound convinced consumers that the product was
like long-term care insurance, but represented to the
Commonwealth that the product was fee-for-service, creating
confusion among consumers that would decrease the likelihood
that they would request services.
As
part of the settlement, Homeward Bound and its affiliates have
been fined $249,000 for Consumer Protection Law violations.
This amount will not be collected, provided Homeward Bound and
its affiliates comply with the AVC; conduct no trade or commerce
within or from
Pennsylvania
on or before
Dec. 31, 2007
; and surrender or withdraw all charters, certificates of
authority, etc. within six months.
Corbett
said Homeward Bound must also pay $10,000 for investigation
costs and future public protection purposes.
The
settlement was negotiated by Deputy Attorney General Timothy
Gates from the Attorney General's Health Care Section, which is
part of the Elder Abuse Unit.
The Attorney General’s press release does not describe the Homeward
Bound contract arrangements in any detail. However, this company
has been the subject of consumer protection litigation in a
number of other states. A
Wisconsin
court described the company’s contractual arrangements in that
state as follows:
Homeward
Bound’s contract guarantees that, in return for the price paid
by the subscriber, it will provide the number of days and hours
of the offered services selected by the subscriber after the
waiting period has expired. During the waiting period, the
subscriber may request only services that are not related to a
pre-existing condition. The waiting period is either six or
twelve months in duration and is determined by a subscriber’s
age and health condition. Homeward Bound imposes limitations on
the number of days and hours available to customers with certain
more serious health conditions. When a subscriber requests
services, Homeward Bound arranges for home healthcare agencies
to provide services to subscribers.
Homeward
Bound Services, Inc., v. Office of the Insurance Commissioner
Court
of Appeal of Wisconsin,
September 7, 2006
Homeward Bound has also been the subject discipline in
Illinois
and
New York
(see links below).
Links to Online Information
▪ Attorney
General Corbett announces $259,000 settlement with Homeward
Bound for defrauding elderly http://www.attorneygeneral.gov/press.aspx?id=2828
▪ New York
Attorney General Sues and Obtains Restraining Order Against Home
Health Services Company That Lured Hundreds of New York’s
Elderly into a Costly Fraud http://www.oag.state.ny.us/press/2007/aug/aug14a_07.html
▪ Homeward Bound Services, Inc., v. The Illinois Department of
Insurance
Illinois
Appellate Court, Third District,
April
28, 2006
http://www.state.il.us/COURT/Opinions/AppellateCourt/2006/3rdDistrict/April/Html/3040982.htm
▪ PA AG Fines
"Homeward Bound" Provider, PA Estate and Fiduciary Law
Blog, http://paelderestatefiduciary.blogspot.com
(
August 29, 2007
)
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Congress Creeping Toward Estate Tax Reform
Written
By: Attorney
Jeff
Marshall
,
CELA*
With the estate tax set to
temporarily expire (for one year only) in 2010, a bipartisan
bill has been introduced in the U.S. House of Representatives
that would permanently increase the estate tax exemption and
reduce tax rates.
Under current law the exemption amount will increase to $3.5 million in
2009, be unlimited in 2010, and then revert to 2001 levels in
2011. Under current
law, the top tax rate will be 45 percent in 2009.
Under the House legislation, the estate tax exempt amount would increase
by $250,000 every year from 2009 until 2015, at which point the
exemption would have increased to $5 million. From 2015 on the
exemption would rise at the rate of inflation.
Thus, if the legislation were to be enacted,
beginning in 2010 the exemption amounts would be as follows:
(i) For
calendar year 2010, $3,750,000.
(ii) For
calendar year 2011, $4,000,000.
(iii) For calendar year 2012, $4,250,000.
(iv) For calendar year 2013, $4,500,000.
(v) For
calendar year 2014, $4,750,000.
(vi) For calendar year 2015 and thereafter, $5,000,000.
The bill, H.R. 3170, would also create two tax rates: 15 percent
for estates worth $25 million and less, and 30 percent for
estates worth more than $25 million.
While there is general agreement that some action on estate tax reform
is needed, the U.S. Senate voted earlier this year to reaffirm
its support for a budget resolution that establishes the
current-law 2009 estate tax rules through 2012. Still, it seems
that some kind of reform will be enacted before temporary repeal
in 2010.
The House bill was introduced by Reps. Harry Mitchell
(D-AZ) and Christopher Shays (R-CT), Here is a link to the
legislation, H.R.
3170. http://www.govtrack.us/congress/billtext.xpd?bill=h110-3170
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Managing Attorney
Jeff Marshall
Selected by Best Lawyers
Written By: Melissa Bottorf, Director of Marketing
& Public Education
Marshall, Parker &
Associates’ Managing Attorney Jeffrey Marshall was recently
selected by his peers for inclusion in The
Best Lawyers in America 2008 in the field of Elder
Law.
Since its inception in 1983, Best
Lawyers has become universally regarded as the
definitive guide to legal excellence. Because Best
Lawyers is based on an exhaustive peer-review survey
in which more than 25,000 leading attorneys cast almost two
million votes on the legal abilities of other lawyers in their
specialties, and because lawyers are not required or allowed to
pay a fee to be listed, inclusion in Best
Lawyers is considered a singular honor. Corporate
Counsel magazine has called Best
Lawyers “the most respected referral list of
attorneys in practice.” (Best Lawyers is copyright 2007 by
Woodward/White, Inc., of
Aiken
,
S.C.
).
In
the Community: Upcoming Presentations and Workshops Scheduled
-Certified
Elder Law Attorneys Jeff
Marshall and Matt
Parker will present free consumer workshops on Protecting
Your Assets from Long Term Care over the next few months.
Reserve your seat by calling 1-800-401-4552 or visit our
registration page online.
Click
here for the workshop flier.
-Saturday, September 22nd from 10:00 AM
until
12:00 PM
Pine Barn Inn in
Danville
-Saturday, October 20th from 10:00 AM
until
12:00 PM
Hampton Inn in
Williamsport
-Saturday, November 10th from 10:00 AM
until
12:00 PM
In
Wilkes-Barre
(location TBA)
♦♦♦♦♦♦♦
-Attorney
Brenda Colbert** will speak about Essential Estate
Planning Tools on Sunday, September 23rd at
2:00 PM
.
This presentation is open to the public and will be held
at St. Jude’s Catholic Church School Cafeteria,
420 South Mountain
Boulevard
in Mountaintop.
For more information, please contact Rosemary Lulis at
574-5400.
♦♦♦♦♦♦♦
If you would like someone from
Marshall
, Parker
& Associates to speak at your next meeting, please contact
Melissa Bottorf at 570-321-9008 or
mbottorf@paelderlaw.com
.
