Affordable Care Act

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The Affordable Care Act (ACA) is intended to increase the quality, accessibility and affordability of health insurance. Under its provisions, most people who can afford to, must obtain health coverage or pay a fine. The law eliminates pre-existing conditions, generally prohibits the cancellation of policies because of claims, mandates larger employers insure employees, creates a marketplace for subsidized insurance providing individuals, families and small businesses with free or low-cost health insurance.

Examples of Insurance Issues Arising Under the ACA. Among other issues that arise under the Affordable Care Act possibly requiring expert testimony include possible subsidized benefits available in a policy offered on a state/federal exchange to an injured party. By way of just one example, consider a liability matter where the claimant claims as damages significant out-year medical costs. Under the Affordable Care Act, some of these costs may be offset through the purchase of a policy under the ACA for medical services. The cost of the premium for such out year medical coverage can be low, particularly given the government subsidies of such premiums.

In addition, pre-existing conditions in prior times were traditionally not covered under the usual health insurance policy. However, under the Affordable Care Act medical services required for such pre-existing conditions including injuries that arose as a result of the negligent act, can be covered with subsidized premiums. This is so because pre-existing injuries/conditions cannot be excluded under policies issued under the ACA (assuming workers’ compensation matters are not at issue).

In all of this, my expertise includes: (i) identifying eligible policies available on the related ACA exchanges: (ii) determining out-year premium; (iii) determining medical services available under eligible policies; (iv) offsetting those services covered under the ACA policy against the services the claimant alleges are required; and (v) determining the offset against claimant’s alleged out-year medical costs/damages. That same expertise permits me to challenge, in cases where change is appropriate, the defense’s use of such offsets.

In all of this then, it is important to point out that the ACA and the policies of health insurance available under the ACA are a thin wafer that sits on top of my overall health insurance expertise, which is set out below. The below health insurance expertise should be read within the context of policies issued under ObamaCare, and together with my CV and expertise at www.expertinsurancewitness.com.

(i) Health Insurance Expertise

Regulatory Experience on Point. My expertise as to health insurance can be found as follows: I am a former Commissioner of Insurance (Iowa), First Deputy Commissioner of Insurance and Assistant Attorney General (assigned on a full time basis to the Department of Insurance). In those capacities, on a daily basis, I had full regulatory oversight and responsibility for and I dealt directly with health insurance matters as they unfold within (i) traditional health insurance policies, (ii) within government subsidized health insurance plans like Medicaid etc., (iii) Medicare Supplemental policies and (iv) within self-insured plan for employees and their dependents, whether ERISA governed or not. When I use the term “health insurance” or its equivalent, I am referring to my expertise within each of these arenas.

Industry Experience Beyond Regulation. In addition to my regulatory background, I have served or am serving in the following capacities, each of which included daily knowledge of and interaction with health insurance matters.

  • General Counsel and Chief Lobbyist to the Academy of Actuaries, Washington D.C.;
  • Counsel to the Iowa House of Representatives;
  • Chief of Staff at the U.S. House of Representatives;
  • President and Chief Executive Officer of the National Council on Compensation Insurance (“NCCI”), a major U.S. insurance entity doing business in some 40 states.
  • Elected Member of the Florida House of Representatives (currently) where I serve as Vice Chairman of the Insurance Committee (among other committees), which has legislative oversight over all insurance operations in the state (as administered by the Florida Office of Insurance Regulation) including those relating to health insurance;
  • Nationally certified Reinsurance Arbitrator (ARIAS-US), where I sit as an arbitrator on disputes between (among others) health insurers and their reinsurers;
  • Attorney admitted to practice in Florida, Illinois and Iowa with an insurance practice; and
  • Past Member of the Executive Committee of the National Association of Insurance Commissioners (“NAIC”).

(My experience as counsel to the Iowa House of Representatives, as Chief of Staff at the U.S. Congress and as an Elected Member of the Florida House of Representatives, where I serve as a Member of the Insurance Committee and Vice Chairman of an Insurance Subcommittee, could all be considered regulatory experience as well, however I have included in this “Industry” section because it seems a better fit.)

Given all of this, set out below is my background specific as to health insurance matters.

(ii) Expertise as to Health Insurance Contracts and Policies

Health Insurance Expertise. In this section, I discuss my background as to health insurance. Though the discussion is couched within the context of a traditional health insurer, my expertise extends equally to health insurance plans as referenced above.

1. Expertise as to Health Insurance Policies.

A. Health Insurance Policy Expertise as an Insurance Regulator. I have had extensive and substantive experience relating directly to health insurance policies including interpreting policy language and determining the insurer’s obligations under such policies. As a regulator for eight years in three positions ((i) Assistant Attorney General assigned to the Department of Insurance (Iowa), (ii) First Deputy Commissioner of Insurance and (iii) Commissioner of Insurance), along with my staff, I approved (or disapproved) of the language of health insurance policies used by each of the 500 life/health insurance companies doing business in the state. (Not all insurers licensed to issue health insurance policies did so, though most did.) This regulatory action also included the approval of policy application forms.

Administrative Law Judge. In addition, I regularly served as an Administrative Law Judge (then known as a “Hearing Officer”) in matters relating directly to health insurance policies where I heard evidence and made findings of facts and conclusions of law as to (i) health insurers, (ii) agents holding health insurance licenses and (iii) other matters such as the intricacies of health insurance policies in connection with regulatory requirements.

B. Health Insurance Policy Expertise: NAIC. While Commissioner, I also served as a member of the National Association of Insurance Commissioners (“NAIC”), (including membership on its Executive Committee), the nationwide organization of all state insurance commissioners. That organization has responsibilities for establishing model insurance administrative regulations and model statutes for consideration by all of the states. While with the NAIC, I served among others as:

  • NAIC: Chair of the Midwest Zone. I was elected to this position by my fellow Insurance Commissioners from this zone (composed of the Midwest states) to provide leadership on behalf of the Midwestern states before the entire balance of the states.
  • Member of the Executive Committee. As a member of the Executive Committee, in effect the steering committee of the NAIC, I provided leadership organization wide. The Executive Committee had direct oversight over the Health Insurance Committee, which was responsible for issues like those under consideration here, including the obligations of Medicare supplemental insurers, including claims responsibilities.

The mission of the Executive (EX) Committee is to manage the affairs of the NAIC in a manner consistent with the Articles of Incorporation and Bylaws as follows:

  1. Based on input of the membership, identify goals and priorities of the organization and make recommendations to achieve such goals and priorities;
  2. Create/terminate task force(s) and/or executive working groups to address special issues and monitor the work of these groups;
  3. Submit reports and recommendations to NAIC members concerning the activities of its subcommittee and the standing committees;
  4. Consider requests from NAIC members for friend-of-the-court briefs;
  5. Establish and allocate functions and responsibilities to be performed by each zone;
  6. Pursuant to the Bylaws, oversee the NAIC offices to assist the organization and the individual members in achieving the goals of the organization;
  7. Conduct strategic planning on an ongoing basis;
  8. Plan, implement and coordinate communications and activities with the Federal Insurance Office (FIO);
  9. Plan, implement and coordinate communications and activities with other state, federal, local, and international government organizations to advance the goals of the NAIC and promote understanding of state insurance regulation; and
  10. Review and approve requests for development of model laws. Coordinate review of existing model laws.

The Executive Committee had and has responsibility for all of the underlying NAIC committees, including the so-called “B Committee” (Health Insurance and Managed Care, including Medicare Supplemental policies and Health Actuarial issues).

Health Insurance and Managed Care (B) Committee. The mission of the Health Insurance and Managed Care (B) Committee is to consider issues relating to all aspects of health insurance as follows:

Ongoing Maintenance of NAIC Programs, Products and Services as to the B Committee.

  • Respond to inquiries from Congress, the White House and federal agencies; analyze policy implications and effect on states of proposed legislation; communicate NAIC’s position through letters and testimony when requested.
  • Monitor the activities of the Health Actuarial (B) Task Force.
  • Monitor the activities of the Regulatory Framework (B) Task Force.
  • Monitor the activities of the Senior Issues (B) Task Force.
  • Oversee changes and provide technical assistance as appropriate to the production of the Accident and Health Statistical Compilation and Market Share Report. Periodically evaluate the demand, utility and income derived from these reports versus their cost.
  • Review issues surrounding the uninsured/underinsured and strategies for achieving universal coverage, determine what contributions state insurance regulators, from their unique perspective, can make to the debate, and develop appropriate vehicles to convey any positions or principles the committee develops to a multiplicity of audiences.
  • Serve as the official liaison between NAIC and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the National Committee on Quality Assurance (NCQA), and URAC.
  • Review issues surrounding evidence-based medicine and determine whether rigorous and consistent reporting should be required. If so, develop a model law on the topic or recommend another appropriate vehicle to achieve goals.
  • Examine issues and, as necessary, state laws and/or regulations regarding appropriate underwriting questions on applications for health insurance coverage particularly with respect to ensuring that underwriting practices and HIV testing procedures are nondiscriminatory; and, if appropriate, develop a model law or model bulletin to reflect state law and/or regulations on the subject.
  • Review the need for a model law or regulation or other vehicle to address and ensure appropriate producer participation in assisting employers and individual consumers making health care insurance purchase decisions for products sold inside and/or outside of health insurance exchanges, make appropriate drafting recommendations and make recommendations to the Secretary of the U.S. Department of Health and Human Services (HHS) regarding guidelines for producer participation in health insurance exchanges.

C. Health Insurance Policy Expertise: American Academy of Actuaries. Along these same lines, I served as general counsel and chief lobbyist to the American Academy of Actuaries, Washington, D.C. The Academy is the national professional association for actuaries. These professionals establish premium levels for policies such as the policies. In addition, because policy language dictates premium levels, actuaries are also active in determining policy language.

D. Health Insurance Policy Expertise: CEO of A Major US Insurance Entity. After serving as a regulator, I served as President and Chief Executive Officer for the National Council on Compensation Insurance (“NCCI”), New York City, a nationwide industry owned organization with about 1,500 employees with annual revenues of about $150 million that did (and does) business in about 40 states. NCCI was domiciled in Florida and did business throughout the United States.

Among my responsibilities at NCCI was (together with my staff) to formulate all workers compensation insurance policy forms as used in our 40 states of operation. This work included drafting all policy language (tailored to the specific state’s insurance code) as well as drafting all endorsements and all other policy forms. In addition, my responsibilities included gaining state insurance department approval of all such policy forms as a condition precedent to their use as submitted by some 600 insurance companies. Finally, I note that among others, the health insurance benefit under workers compensation is an important coverage. I am very familiar with the meaning and relevance of specific state approval of policy forms, endorsements and applications and related documents and matters.

E. Health Insurance Policy Expertise: Reinsurance Arbitrator. I am also one of about 200 certified reinsurance arbitrators (by ARIAS-US) and have sat as an arbitrator on health insurance issues in disputes about policy language between reinsurers and their health insurers.

2. Expertise as to Claims / Duties of Health Insurance Companies. 

A. Expertise as to Claims/ Duties of Health Insurance Companies As Commissioner of Insurance. I have also had significant experience and responsibility in connection with determining and passing judgment on insurers’ responsibilities as to insurance agents and as to applicants, insureds, owners and beneficiaries. In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 500 life/health insurers for their related obligations. I did so through a series of action steps and tools. The action steps and tools included the following:

  1. Claims/ NAIC Market Regulation Handbook. As Commissioner, I had as an available tool, the NAIC Market Regulation Handbook (“Examiners Handbook” or “Handbook”). Among other things, this Handbook sets forth standards to assess health insurer behavior relating to (i) policy application, (ii) policy issuance and (iii) responsibilities relating to their agents. The Handbook also sets forth standards of review as to agent contracts and appointments by insurers of agents. The Handbook is used by every department of insurance in the United States. The standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Handbook are universally recognized as appropriate standards against which to judge health insurer behavior.
  2. Claims/ Market Conduct Examinations. On a regular basis, my regulatory agency conducted Market Conduct Examinations of health insurers utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate policy behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.
  3. Claims/ NAIC Financial Examiners Handbook. As Commissioner, I had available another tool, namely the NAIC Financial Examiners Handbook (“Financial Examiners Handbook”). Among other things, the Financial Examiners Handbook sets forth standards to assess health insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are agent contracts and policyholder matters. As with the Market Conduct Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge health insurer behavior.
  4. Claims/ Financial Examinations. On a regular basis, my Department conducted financial examinations of health insurers utilizing the Financial Examiners Handbook to determine whether in fact the insurer was and was likely to remain solvent. As with market conduct exams, financial examinations entailed physically going into the insurers’ operations and studying, among others, files to (i) assure compliance with agent and policyholder duties and (ii) to assure that financial reporting as to agent and policyholder matters were properly carried out. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.
  5. Claims/ Complaints from the Public. On a daily basis, my Department received incoming consumer complaints as to health insurance company practices. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally important, those lawyers also determined whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to the health insurance company’s potential behavior across the board.
  6. Claims/ Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such health insurers under the state’s civil Administrative Procedures Act. In connection with such prosecutions, I served in various capacities during my eight years as a regulator, including serving as (i) prosecutor (as Assistant Attorney General), (ii) as the decision maker as to whether to initiate prosecution in the first instance (while First Deputy and Commissioner of Insurance) and (iii) as the Administrative Law Judge (“ALJ”) who presided over the prosecution and entered findings of fact and conclusions of law as to insurer coverage determinations and claim settlement practices. I have served as an ALJ in scores of such cases where the health insurer’s (i) agent, (ii) policy form, (iii) policy application, and (iv) overall conduct were the primary issues and I entered final decisions and orders in such matters.

B. Expertise as to Claims/ Duties of Health Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization. I discuss my executive experience at NCCI under this section because in addition to expertise as to policies (discussed above), my experience at NCCI also resulted in expertise as to insurer responsibilities as to applications, policy issuance and their agents.

While President and CEO of NCCI, I visited and physically toured and reviewed in excess of 400 insurance companies and gained direct exposure to the procedures and processes and standard industry practices of the U.S. insurance community including the health insurance community in that any number of those insurers had health insurance operations.

C. Expertise as to Claims/ Duties of Health Insurance Companies: General Counsel to the American Academy of Actuaries. As stated above, I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. I mention it again here in connection with insurer agent and policy obligations because Academy members included affiliation with virtually every health insurance company in America. Among other things, such actuaries had duties relating to policy language and policy pricing. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such health insurance companies.

D. Expertise as to Claims/ Duties of Health Insurance Companies: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of agent and insurer interests and became familiar with applicable health industry standards of practice, including insurer responsibilities toward their agents. Those interests also included intimate involvement with insurance forms as counsel to the (i) Professional Insurance Agents of Iowa and (ii) the Iowa Association of Life Underwriters (life, health and annuity insurance agents).

3. Expertise as to Health Insurance Underwriting.

A. Expertise as to Underwriting Duties and Responsibilities of Health Insurance Companies as Commissioner of Insurance. Consistent with the discussion immediately above, I have also had significant experience and responsibility in connection with determining and passing judgment on health insurance companies’ underwriting duties and responsibilities.

In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 500 life/health insurance companies for their underwriting obligations. As I did in connection with the general duties of health companies (discussed above), I did so as well as to underwriting through a series of action steps and tools. The action steps and tools included the following:

  1. Underwriting: NAIC Market Regulation Handbook. As Commissioner, consistent with the prior discussion, I also utilized the NAIC Examiners Handbook in that it sets forth standards to assess the underwriting behavior of insurance companies relating to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time. As discussed above, the standards are utilized by every state department of insurance and the standards of the Examiners Handbook are universally recognized as appropriate standards against which to judge the underwriting duties and responsibilities of health insurance companies.
  2. Underwriting: Market Conduct Examinations. Also as discussed above, on a regular basis, Market Conduct Examinations of health insurers were conducted utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others as to underwriting issues. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate underwriting behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.
  3. Underwriting: NAIC Financial Examiners Handbook. As above, I had available another tool, namely the Financial Examiners Handbook, which (parallel to the above discussion) sets forth standards to assess health insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are insurer underwriting files and matters. These standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC and are universally recognized as appropriate standards against which to judge health insurer behavior, including underwriting.
  4. Underwriting: Financial Examinations. As above, my Department conducted financial examinations of health insurers utilizing the Financial Examiners Handbook to determine, as with market conduct exams, among others things, (i) assurance of compliance underwriting duties and (ii) assurance that financial reporting matters were properly carried out. As further discussed below (and above), errant insurers were warned, disciplined and prosecuted as required.
  5. Underwriting: Complaints from the Public. On a daily basis, my Department received incoming consumer complaints as to underwriting practices of health insurance companies. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally important, those same lawyers also were trained to determine whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to an insurance company’s potential underwriting behavior across the board.
  6. Underwriting: Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such insurance companies under the state’s civil Administrative Procedures Act consistent with the discussion in the prior section.

B. Expertise as to Underwriting Duties and Responsibilities of Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization with Major Underwriting Duties. I discuss my executive experience at NCCI under this section because my experience at NCCI also resulted in expertise as to insurer responsibilities as to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time.

The Gold Standard of Underwriting. While I was CEO, NCCI had the responsibility to formulate and submit for approval to most all of the Insurance Commissioners in the U.S., the underwriting standards used for underwriting most all of the workers compensation policies in this nation. Underwriting for workers compensation is routinely recognized throughout the industry as involving the most intense underwriting of all lines of insurance. This is so because there are over 600 officially designated workers compensation classification codes an employee may be placed in based on their principal job duties.

NCCI authored and maintained a detailed, word-by-word, phrase by phrase description as to each of these 600 classification codes, as to which insurers was required to adhere. That entire intense underwriting process inclusive of its classifications is encompassed in an industry wide recognized and used document called the Scopes Manual and is recognized as the Gold Standard for underwriting workers compensation insurance. Furthermore, the underwriting process, regardless of the line of insurance is fundamentally the same. This is because most all insurers (including health insurers) are about the business in the underwriting process of selecting the most favorable risks and rejecting the least favorable risks, regardless of the line of insurance. As such, it is the same process brought to bear on different lines of insurance – always with the same goal: identifying good risks and rejecting bad risks.

C. Expertise as to the Underwriting Duties of Health Insurance Companies: General Counsel to the American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. Academy members included affiliation with virtually every insurance company in America. Among other things, such actuaries had duties relating to the underwriting duties and responsibilities of insurance companies. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such insurance companies.

D. Expertise as to the Underwriting Duties and Responsibilities of Health Insurance Companies: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of insurer interests and became familiar with applicable health industry standards of practice, including insurer responsibilities toward the underwriting process, including working directly with the Iowa Association of Life Underwriters (whose duties included among others, the first line of health underwriting).

4. Expertise as to Actuarial Issues. 

A. Expertise as to Actuarial Issues as a Regulator. As Insurance Commissioner, my agency was responsible for solvency oversight, insurance company examinations and financial and accounting matters of insurance companies. In particular, that oversight included the responsibility of overseeing practices of insurers, agents and actuaries who formulated their rates. In addition, I oversaw the state regulation of the securities industry with Iowa’s Superintendent of Securities reporting directly to me.

As a member of the NAIC, I served as a Member of the Executive Committee with oversight over the so-called Health Insurance Committee or the “B” Committee. The charge of this Committee was oversight over all issues relating to health insurance products as well as health insurers, including policy provisions. This Committee’s work included considerations relating to underlying actuarial issues as to the pricing and unfolding of this product.

B. Expertise as to Actuarial Issues as a CEO. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12 – $15 billion of workers compensation insurance in 39 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies and then used that data to project necessary premium changes. NCCI carried out its intense pricing work though the professional efforts of an actuarial division of about 150 personnel. These individuals included support staff; statisticians; actuarial students and qualified actuaries. This staff produced about 40 major rate filings annual covering 40 states, pricing some $12 to $15 billion of insurance (workers compensation); and included the responsibility to advocate those rate changes before state government.

C. Expertise as to Actuarial Issues: American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries, including advising on admissions, discipline, federal antitrust and general corporate law. I represented the 10,000 member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies.

The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers. Academy members included affiliation with virtually every property casualty insurance company and actuarial consulting company in America. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such companies.

D. Expert Experience and Authorship on Actuarial Issues. I have served in a number of cases as an expert on actuarial issues, including in Arizona, Florida and California. I am also the author of a number of articles on the actuarial profession.

E. Actuarial Issues as Reinsurance Arbitrator. I am certified by ARIAS as one of about 200 U.S. certified reinsurance arbitrators and sit as an arbitrator on disputes between insurers and their reinsurers; actuarial issues routinely arise in such disputes in the form of pricing disputes including information (and misinformation) supplied by the ceding company and that information’s (and misinformation’s) positive or adverse effect on the pricing that was agreed to at the time of the initial reinsurance agreement.

F. Actuarial Issues as a Member of the Florida Legislature. As an Elected Member of the Florida Legislature, a Member of the Insurance Committee and Vice Chairman of an Insurance Subcommittee, I have related responsibilities that come to bear on all matters of actuarial issues as they intersect with insurance and insurance products.

Contact Bill Hager at 561-306-5072 or via email to discuss your case.