Hurricane Katrina: Legal Issues - Columbus School of Law

information regarding a specific insurance company, visit http://www.disasterinformation.org/findins.htm.
The America’s Health Insurance Website is also maintaining updated information on measures that are being
implemented by various insurance companies to help assist members affected by Hurricane Katrina. Such information
includes contact numbers and help-lines for individual companies as well as information regarding premium payment
grace periods and other specific concessions. There is currently information on eighteen major insurance providers,
which can be accessed at: www.ahip.org/HurricaneResponse/.
What access do victims of Hurricane Katrina have to funds held in IRA’s, 401(K)’s, and other similar deferred
compensation accounts?
On Monday, September 12, 2005, the Senate Committee on Finance proposed a tax relief package intended to allow
displaced hurricane victims to dip into their 401(K)s and individual retirement accounts without penalty. Congress is
expected to move quickly to enact the plan, under which the ordinary 10% early withdrawal penalty will be waived
for people whose primary residence is located in a federally-declared natural disaster site. People who choose to
withdraw these types of funds should be aware that they will still owe regular income tax on the withdrawals;
however, payment of those taxes can be spread over a period of up to three years. In addition to the penalty waiver,
the proposed package doubles the permissible loan limit to 100% of a person’s account balance or $100,000.00,
whichever is less.
While this information may only pertain to people with personal retirement plans, the proposed package also includes
significant tax exemptions that will likely benefit all hurricane victims. If the package is approved, all taxpayers
affected by Katrina will receive a $3200.00 personal tax exemption. In addition, people housing hurricane victims
will receive a $500.00 exemption for each individual housed, up to a total of $2000.00. Finally, the deductible
mileage rate for people using their own vehicles for charitable work will be raised to one half of the standard
business mileage rate of around $0.48 per gallon.
What public health benefits may be available to storm victims?
Families who reach certain poverty levels may qualify for TANF - temporary assistance for needy families. Those
families who qualify will be able to obtain Medicaid benefits for themselves and their children. Families with
children under eighteen (18), very few resources and low income are encouraged to apply. To see if you qualify for
Medicaid, visit http://www.dom.state.ms.us. In addition, children of families above the poverty level may qualify for
coverage under the Mississippi Children’s Health Insurance Program (CHIP). See discussion in benefits section.
Absence from employment for medical or family reasons
Under the Family and Medical Leave Act (FMLA), an employee may take up to 12 weeks unpaid leave because of a
serious medical condition, or to care for an immediate family member (spouse, parent, or child) with a "serious
health condition." During those 12 weeks, the employee's group health benefits through the employer will still be in
effect, though other benefits of the employment may not. Additionally, under the Americans with Disabilities Act
(ADA), an employee may be entitled to job leave if he or she is disabled and if the granting of the leave would serve
as a reasonable accommodation to the disability. Individuals should also check individual state statutes to see if
additional leave protection is available for pregnancy or short-term disability leave.
Who is eligible for leave under the FMLA?
Not all employees are eligible under this federal law. The employee must have worked at a covered employer at least
1,250 hours in the past 12 months to be eligible. To be covered, an employer must employ at least fifty employees
within 75 miles of the applying employee's worksite.
Is there any way to get paid leave under the FMLA?