Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, July 11, 1994                   TAG: 9407220038
SECTION: BUSINESS                    PAGE: 6   EDITION: METRO 
SOURCE: POFF MUG
DATELINE:                                 LENGTH: Medium

MED KEY CARD IS `FINANCING OF LAST RESORT'

A: The hospital doesn't directly own Med Key, but both the hospital and the finance company are subsidiaries of Carilion Health System.

Donald Lorton, executive vice president of Carilion Health System, said the hospital has to charge interest on unpaid hospital bills to avoid putting the financial burden on those people who do pay promptly.

The hospital, however, does not push use of Med Key.

Lorton said Carilion has a tiered system for handling unpaid bills.

The first is for those people the hospital identifies as medically indigent. These people may not be indigent for other costs, but they may have no hope of ever paying a hospital bill. These accounts are either discounted or written off, depending on the circumstances.

Then Carilion encourages those who can afford to pay to visit their bank, thrift or credit union to borrow the money, Lorton said. Many people can obtain loans from financial institutions in order to pay off their bills in full.

Finally, Lorton said, the hospital looks to Med Key, which he called "the finance company of last resort." Most people, regardless of their credit records, can pay the hospital by borrowing from its sister finance company. Unlike the hospital, Med Key is in the business of lending money.

Lorton said the interest rate varies from 11.9 percent to 15.9 percent, depending on the bill-paying history of each individual applicant.

Regardless of hospital policy, however, you cannot be compelled to apply for Med Key. If you wish, you can let the hospital take a judgment against you. The interest would be lower, but the court would add 10 percent to 15 percent in attorneys' fees and costs.

Q: In 1976, while my husband and I were residing in Alexandria, we purchased two lots (four grave sites) at Mount Comfort Cemetery. Since that time, we both retired and moved to Southwest Virginia.

My husband died in 1990 and had requested that he be cremated. This was done, and at my death I also wish to be cremated.

I have attempted through ads in the newspapers in Northern Virginia and through personal contact with the cemetery to sell these lots. As you can see, I have no further use for them. Can you suggest what I might do in order to sell these cemetery lots?

A: Cemetery lots are hard to sell. Unlike you, the vast majority of people wait until they are confronted by the need for a lot, and then the need is urgent. They will go directly to the cemetery because they have no time to wait. Your problem is worsened by the fact that you live at a distance.

You have another disadvantage. A spokeswoman for the cemetery in Alexandria said it is still selling lots. Of course, that puts the cemetery in direct competition with you. The only service the cemetery will give you is to show the lots to any prospects you might find.

Your prospects must be recruited through newspaper advertising. The papers that circulate in that area of Virginia are The Washington Post, the Fairfax Journal and the Alexandria Gazette-Packet. The last two will be much cheaper and more closely target the people you want to reach.

You will have to advertise a steep discount from the cemetery's rate because the cemetery is more convenient. A standard lot at the cemetery is going for $1,800. If you drop to the right price, the lots should sell.

Q: I'm a sales representative on a salary-plus-bonus compensation plan. The company withholds 28 percent federal taxes on the bonus money but withholds the rest of my salary at 15 percent. I'm in the 15 percent tax bracket. Every year I have to file my return and wait for a refund from the Internal Revenue Service.

I questioned company officials, and they said they are required to withhold that amount because there is a penalty for withholding too little money. I asked the IRS and got two different answers.

A: Joy Sligh, spokeswoman for the IRS in Richmond, said salaries and bonuses are subject to the same withholding rules. She said IRS Circular E is used by employers to calculate withholding. The usual way is to have employees fill out a W-4 form based on the number of dependents claimed. The alternative is a percentage method based on tax brackets.

She said Circular C calls for 15 percent withholding on wages of $50 to $463 weekly. The 28 percent bracket applies to wages and bonuses of $463 to $968 weekly. That's for a single person. There are separate figures for married taxpayers and heads of households, and the IRS has wage levels for 31 percent, 36 percent and 39.6 percent brackets.

You can see these brackets for yourself to determine how they apply to the amount of your bonus and to your tax-filing status. You should call the IRS order line for forms at (800) 829-3676. Ask for Publication 15, Employers' Tax Guide.