Category Archives: Investing and fiduciary requirements

New NY State Laws For 2013

Here are some measures that take effect in New York State on New Years Day.
ByPam Robinson December 31, 2012 Patch

A new sales tax exemption designed to encourage solar energy use and a
law to provide new protections for domestic violence victims highlight
the list of new state laws that take effect on Jan. 1, 2013. Other
measures set to become law on New Years Day include legislation that
help craft  brewers distribute their products, prohibit the sale of
e-cigarettes to  minors, and new ways for colleges to provide health
insurance  for students.


A new law taking effect on Jan. 1 (Chapter 406, S3203B,
Senator Maziarz) exempts the sale and installation of commercial solar
energy systems equipment from state sales tax and compensating use
taxes. Under the new law, municipalities will also have the authority to
provide this exemption from local sales and use taxes.

“Solar  energy system installation can already be extremely costly for
businesses, but the additional state sales tax and compensating use tax
on top of that make local businesses hesitant to use this energy
source,” Senator George Maziarz (R-C, Newfane), Chairman of the Senate
Committee on Energy and Telecommunications, said.

“If we are to achieve  the goal of 45 percent of New York State’s
electricity needs through  clean renewable energy and improved energy
efficiency by 2015, then we  must provide incentives to encourage
businesses to install solar energy  systems just as we have done with
homeowners.  Eliminating all state  sales taxes and providing local
municipalities an option to eliminate  their portion as well will
encourage more commercial solar installations  and will hopefully create
more jobs for New Yorkers to help with the  installation process.”


Part of the new domestic violence reform law, designed to protect
victims’ health care and insurance information, (Chapter 491, S7638),
takes effect on January 1, 2012.  The landmark law, sponsored by
Senator Steve Saland (R-I-C, Poughkeepsie), Chairman of the Senate Codes
Committee includes several important provisions to protect victims of
domestic violence and establish stronger criminal penalties to punish
individuals who commit acts of domestic violence.

As of the  first of the year, victims of domestic violence who seek medical and/or
mental health services and use their health insurance to pay for that
care, can designate alternative contact information so they may receive
health insurance correspondence in a safe location of their own
choosing, such as the home of a friend or family member, a post office
box, or a shelter.

“Current law already bars disclosure of an
address and phone number when an order of protection is in place,”
Senator Saland said.  “This law greatly expands the information to be
protected by ensuring that a victims’ health insurance information is
not sent to the same address as the alleged abuser, thus affording more
protection domestic violence victims.”


This new law (Chapter 367, S1315 Senator
Griffo) will give New York’s craft breweries, like the F.X. Matt
Brewing Company in Utica, the means to end unfavorable, exclusive
contracts with beer wholesalers.

In 1996, the Beer Franchise
Law strengthened distributing contracts to protect small, family-owned
wholesalers from arbitrary termination by large multinational breweries.
Since then, the number of wholesalers has dropped in New York State
from 112 in 1996 to fewer than 60 today.

This measure will
help the growth of the state’s small independent breweries by allowing
them to end costly exclusive contracts with large wholesalers that do
not market or promote their brands without having to undertake lengthy
legal procedures that may not provide relief.

“I sponsored this
legislation on behalf of the craft brewers in the Central New York
region, all of whom are important parts of our regional economy,”
Senator Joseph A. Griffo (R-C-I, Rome) said. “During difficult economic
times, the State needs to stand by our small businesses in order to
grow  our economy especially in the upstate region. The growth of small
brewers has been an exciting chapter in the 21st Century economy, and
this new law is important to help it grow and add jobs.”

law defines small brewers as those who produce less than 300,000 barrels
of beer annually, and whose sales to a wholesaler are three percent or
less of a multi-brand beer wholesaler’s annual business.


This law (Chapter 246, S7314A Senator
Seward)  will allow eligible private and public colleges and
universities in New York State to self-insure for their students’ health
insurance needs. An advantage to becoming self-insured is that the
plan  can be designed to meet the needs of the students and can reduce
administrative costs, compared to basic, more expensive commercial
insurance plans. Most states in the country already allow private
colleges and universities to self-insure for their students’ health

Senator James L. Seward (R-C-I, Oneonta), Chair of
the Senate Insurance Committee, said, “As higher education costs rise,
colleges and universities are always looking for an edge to keep
expenses down and compete with out-of-state schools.  Clearing the way
for a self-insurance plan will allow participating New York schools that
take part to tailor their own health insurance plans to meet the
specific needs of their student populations, while reducing
administrative costs.”

BAN ELECTRONIC CIGARETTES FOR MINORS A new law (Chapter 448, S2926B, Senator Johnson) will prohibit the sale of electronic cigarettes to people under the age of 18 years of age.

“This law is needed to protect children and young adults from the
dangers of smoking electronic cigarettes, particularly given that they
are unregulated and have not been proven to be safe for use at any
age,”   Senator Owen Johnson (R-C, Babylon) said.

The above information was listed on the New York State Senate website.

Employers Must Offer Family Care, Affordable or Not

Published: December 31, 2012|NY Times
WASHINGTON — In a long-awaited interpretation of the new health care law, the Obama administration said Monday that employers must offer health insurance to employees and their children, but will not be subject to any
penalties if family coverage is unaffordable to workers.
The requirement for employers to provide health benefits to employees is
a cornerstone of the new law, but the new rules proposed by the Internal Revenue Service
said that employers’ obligation was to provide affordable insurance to
cover their full-time employees. The rules offer no guarantee of
affordable insurance for a worker’s children or spouse. To avoid a
possible tax penalty, the government said, employers with 50 or more
full-time employees must offer affordable coverage to those employees.
But, it said, the meaning of “affordable” depends entirely on the cost
of individual coverage for the employee, what the worker would pay for
“self-only coverage.”

The new rules, to be published in the Federal Register, create a strong
incentive for employers to put money into insurance for their employees
rather than dependents. It is unclear whether the spouse and children of
an employee will be able to obtain federal subsidies to help them buy
coverage — separate from the employee — through insurance exchanges
being established in every state. The administration explicitly reserved
judgment on that question, which could affect millions of people in
families with low and moderate incomes.
Many employers provide family coverage to full-time employees, but many
do not. Family coverage is much more expensive, and the employee’s share
of the premium is typically much larger.
In 2012, according to an annual survey by the Kaiser Family Foundation,
premiums for employer-sponsored health insurance averaged $5,615 a year
for single coverage and $15,745 for family coverage. The employee’s
share of the premium averaged $951 for individual coverage and more than
four times as much, $4,316, for family coverage.
Starting in 2014, most Americans will be required to have health
insurance. Low- and middle-income people can get tax credits to help pay
their premiums, unless they have access to affordable coverage from an
In its proposal, the Internal Revenue Service said, “Coverage for an
employee under an employer-sponsored plan is affordable if the
employee’s required contribution for self-only coverage does not exceed
9.5 percent of the employee’s household income.”
The rules, though labeled a proposal, are more significant than most
proposed regulations. The Internal Revenue Service said employers could
rely on them in making plans for 2014.
In writing the law, members of Congress often conjured up a picture of
employees working year-round at full-time jobs. But in drafting the
rules, the I.R.S. wrestled with the complex reality of part-time,
seasonal and temporary workers.
In addition, the administration expressed concern that some employers
might try to evade the new requirements by firing and rehiring
employees, manipulating their work hours or using temporary staffing
agencies. The rules include several provisions to prevent such abuse.
The law says an employer with 50 or more full-time employees may be
subject to a tax penalty if it fails to offer coverage to “its full-time
employees (and their dependents).”
Employers asked for guidance, and the Obama administration provided it,
saying that a dependent is an employee’s child under the age of 26.
“Dependent does not include the spouse of an employee,” the proposed rules say.
Thus, employers must offer coverage to children of an employee, but do
not have to make it affordable. And they do not have to offer coverage
at all to the spouse of an employee.
The administration said that the rules — which apply to private
businesses, nonprofit organizations and state and local government
agencies — would require changes at many work sites.
“A number of employers currently offer coverage only to their employees,
and not to dependents,” the I.R.S. said. “For these employers,
expanding their health plans to add dependent coverage will require
substantial revisions to their plans.”
In view of this challenge, the agency said it would grant a one-time
reprieve to employers who fail to offer coverage to dependents of
full-time employees, provided they take steps in 2014 to come into
compliance. Under the rules, employers must offer coverage to employees
in 2014 and must offer coverage to dependents as well, starting in 2015.
The new rules apply to employers that have at least 50 full-time
employees or an equivalent combination of full-time and part-time
employees. A full-time employee is a person employed on average at least
30 hours a week. And 100 half-time employees are considered equivalent
to 50 full-time employees.
Thus, the government said, an employer will be subject to the new
requirement if it has 40 full-time employees working 30 hours a week and
20 half-time employees working 15 hours a week.

Obamacare fee of $63 per person to begin in 2014

I have had a few questions already from Clients concerned about this new “fee.”  The purpose of the fee is to help fund Health Care Reform, pure and simple.  It should amount to about $25 Billion in new revenues to fund the legislation.  Even Democrats who were high on the bill now realize it is singificantly underfunded.  Health and Human Services will use the money to “…cushion health insurance companies from the initial, hard-to-predict costs of covering uninsured people with medical problems.”  Beginning January 1, 2014, insurers must take all comers.

The program “is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and
other medical facilities by the uninsured and thereby lower medical expenses and premiums for all,” the Obama administration says in the
regulation. An accompanying media fact sheet issued Nov. 30 referred to “contributions” without detailing the total cost and scope of the

One of the biggest complaints is that this fee will be paid by all, but does nothing for the group marketpleace- it goes to stabilize the individual marketplace.  It is expected that most employers will simply pass the fee onto their employees.

Athene buys Aviva USA for $1.8 billion

By | December 21, 2012 •
After months of speculation, Aviva PLC has found a buyer for its
U.S. subsidiary. This morning, Athene Holding Ltd., a life insurance
holding company that focuses primarily on fixed and equity indexed
annuities, has agreed to acquire Aviva USA Corp. for $1.8 billion.

In a statement, John McFarlane, chairman of Aviva PLC, said, “The
sale of Aviva USA is an important step forward in the delivery of our
strategic plan. It considerably strengthens Aviva’s financial position,
increases group liquidity and improves our economic capital surplus
while also reducing volatility.”

Earlier this year, the London-based insurer embarked on a plan to shed non-core business segments, cut expenses and streamline the organization.

According to a company release, the deal will boost Aviva’s pro forma
economic capital surplus coverage ratio by 17 percentage points to 165
percent (or economic capital surplus by approximately £1.1 billion)
placing the group within its target range of 160 percent to 175 percent
of required capital. (It stood at 130 percent in FY 2011.) The sale will
reduce the group’s credit risk exposure by approximately 25 percent,
and also reduce the sensitivity of the group’s economic capital results
to credit spread movements by approximately 30 percent. Those numbers
are significant as foreign-based insurers are facing tougher capital
reserving requirements.

Aviva will receive sales proceeds of $1.55 billion in cash, after the
repayment of external debt, which will be used for general corporate
purposes. The deal values Aviva USA at 7.9 times 2011 U.S. GAAP earnings
and 0.6 times U.S. Statutory Capital as of the end of June. Included in
the deal are Aviva’s U.S. life and annuities business and related asset
management operations.

Though overall annuity sales have slumped in recent quarters, indexed
annuities, a subset of fixed annuities, have shown some strength. In
the third quarter, Aviva USA was number two in total fixed annuity sales
at approximately $1.1 billion.

Discounted sale

The sale represents a significant discount from what Aviva PLC paid
for the U.S. operation back in 2006 when it acquired AmerUs Group for
roughly $2.9 billion. However, in November, the company stated it
expected to sell Aviva USA at a substantial discount to book value.

Aviva USA specializes in indexed life insurance and indexed annuities
and has more than 930,000 customers. The deal is expected to close next

“We look forward to becoming a part of Athene,” said Chris
Littlefield, president and CEO of Aviva USA, in a statement. “When the
transaction closes in mid-2013, our current location in West Des Moines
will serve as U.S. operations headquarters for a newly named entity
called Athene USA. I believe there will be significant opportunities for
our employees as we help Athene continue to build a successful

This is Bermuda-based Athene’s second foray into the U.S. market in recent months. In July, it acquired Presidential Life Corp.
in a $415-million all-cash deal. Like Aviva USA, Presidential Life
sells fixed annuities and life insurance as well as accident and health
insurance products.

Contraceptives mandate left intact, for now

Lyle Denniston – ScotusBlog – 12/26/12

Supreme Court Justice Sonia Sotomayor refused on Wednesday
afternoon to block enforcement of the new federal health care law’s
mandate that profit-making companies begin providing free birth-control
drugs and methods for their women workers, beginning next week.  In a four-page opinion,
Sotomayor ruled that an Oklahoma City family and its religion-oriented
businesses did not qualify for a Court order against the mandate while
its court challenge goes forward.

This marked the first time that the Supreme Court has been drawn
into a nationwide controversy over the contraceptives mandate.  More
than forty lawsuits have been filed against that requirement by
non-profit religious schools, colleges, and hospitals, and by
religion-oriented, profit-making companies.   Justice Sotomayor, noting
that the lower courts that have ruled so far on pleas for emergency
court orders have reached mixed results, concluded that the Hobby Lobby
family’s right to an injunction could not meet the rigorous standard
that it be “indisputably clear.”   (The Hobby Lobby challenge was
discussed in this post.)

The kind of remedy the Hobby Lobby and its owners had sought — an
injunction pending appeal — can only be issued if it is necessary to
protect the Supreme Court’s authority to rule ultimately on the
constitutional challenge, or if the challengers’ right to such a remedy
is clear without a doubt, Justice Sotomayor noted.  She stressed that
she was not ruling on whether the constitutional challenge ultimately
would succeed, and noted that the Court had not previously ruled on
whether constitutional or other legal protection for religious rights is
available for closely held, for-profit corporations and their
controlling shareholder when they object as an expression of their faith
to mandatory employee benefits.

Hobby Lobby, an arts and crafts retail chain, and a related chain of
Christian bookstores, Mardel, Inc., have argued that they will face
heavy fines, perhaps reaching $1.3 million for each day they fail to
obey the contraceptives mandate.  Sotomayor noted that claim, but ruled
that it was not sufficient to satisfy the requirements for an
injunction.  Even without such an order, the Justice wrote, the
challengers may continue with their legal claims in the lower courts and
seek Supreme Court review later, if they wish.

A federal judge in Oklahoma and the Tenth Circuit Court based in
Denver had previously refused the challengers’ requests to bar
enforcement of the mandate.

Blog Archives

Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck