Author: Site Staff

Employer groups are pushing for health care reform to be part of the massive stimulus package being crafted by the incoming Barack Obama administration and Congress.

In addition to helping laid-off workers pay to continue receiving their employers’ group health insurance, the federal government should make health care reform a centerpiece of any comprehensive stimulus plan, said the American Benefits Council in a 44-point health reform proposal released Monday, January 12.

“Health care system reform is not an obstacle to economic recovery; it’s a fundamental component of it,” said James Klein, president of the American Benefits Council, which represents private-employer benefits plans.

The council stated that the $2.1 trillion health care system needed to be changed to improve the quality and cost of medical care by building on the employer-based health care system, which provides insurance to 150 million Americans.

“All Americans should have coverage, partly because it will reduce cost shifting for unfunded care and because it’s the right thing to do,” said Wilma Schopp, head of human resources for Monsanto Co. and chairwoman of the council’s Health Reform Task Force. “We want to build on the strengths of the employer-based system, not undermine it. It’s the best foundation we have for reform, and we need to make sure it remains solid.”

The council said it supported a law enacted in Massachusetts that requires individuals to purchase health insurance. The group said the best mechanism to ensure that individuals obtain coverage was to automatically enroll uninsured people into plans, offer subsidies to make coverage more affordable, and provide at least one plan per state that would guarantee coverage to people with pre-existing conditions.

The group flatly rejected, however, calls to require employers to provide coverage. In Massachusetts, employers with more than 10 employees that do not provide coverage are required to pay $295 per employee annually into a health care fund. The benefits council said its combination of reforms would make it easier for people to purchase insurance on their own, eliminating the requirement that employers do so on behalf of their employees.

“We are firm believers in the importance and value of employers providing coverage, but to take it one step further and require every other employer did not seem like the appropriate course to take,” Klein said. “When you look at comprehensive health reform, not just coverage alone, you do not need to say that an employer mandate is the way you are going to get there.”

The benefits council, which did not say how much it thought health care reform would cost the federal government, said current law allowing employers to provide health care tax-free has worked and should be extended to individuals. The federal government should use the stimulus package to redouble its efforts to create a nationwide health information network, employer groups said Monday.

The National Business Group on Health endorsed the incoming Obama administration’s plans to spend $50 billion over five years to expand health information technology, including digitizing all health records by 2014. That date was also set by the George W. Bush administration.

The group also supported spending part of the $775 billion proposed stimulus bill to help laid-off workers maintain their company health insurance.

Helen Darling, president of the National Business Group on Health, whose members include 63 of the Fortune 100 companies, said the legislation in the stimulus bill should provide funding for doctors in small practices to set up health IT that works across various computer systems.

Darling acknowledged that federal aid to help the jobless maintain their company health plan, known as COBRA, would add substantially to the stimulus price tag.

With all the emphasis on “shovel-ready” infrastructure and other capital projects, Darling urged Congress not to lose sight of the benefits of spending on medical research that could result in better treatment and lower costs.

“It could get lost in the shuffle,” she said. Health IT and research spending “increases the productivity of the economy.”

—Jeremy Smerd and Mark Schoeff Jr.

Workforce Management’s online news feed is now available via Twitter.

The U.S. Supreme Court has agreed to consider whether a public entity was justified in refusing to certify the results of two fire department promotional exams on grounds that the tests may have had a disparate impact on African-Americans.

According to the 2006 district court decision in Frank Ricci v. John DeStefano, it appeared the results of a captain’s test given in 2003 by the New Haven, Connecticut, Fire Department meant no blacks and at most two Hispanics would be eligible for promotion. The results of a lieutenant’s test indicated that neither blacks nor Hispanics would be promoted.

After the New Haven Civil Service Board failed to certify the tests’ results, 17 white and one Hispanic candidates filed suit, alleging violation of Title VII of the Civil Rights Act of 1964, among other charges.

The district court granted New Haven’s motion for summary judgment, which the 2nd U.S. Circuit Court of Appeals upheld in June 2008.

In its brief opinion, the appellate court said plaintiff Frank Ricci did not have a valid Title VII claim. “To the contrary, because the board, in refusing to validate the exams, was simply trying to fulfill its obligations under Title VII when confronted with test results that had a disproportionate racial impact, its actions were protected.”

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

 

At the request of key congressional leaders, American International Group Inc. won’t immediately pay out $93.3 million in employee compensation to former employees and agents and certain executives.

“AIG took this action in response to concerns expressed by several members of Congress,” said a spokeswoman for AIG. “We believe this is a positive outcome that still allows AIG to address concerns some employees have about accessing pay that they had earned but deferred.”

In a joint statement issued Wednesday, January 7, Rep. Paul E. Kanjorski, D-Pennsylvania and chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, and Rep. Joseph Crowley, D-New York, who serves on the Ways and Means Committee, said that as a result of congressional inquiries, AIG decided to change a previously announced plan to terminate several deferred compensation plans and accelerate the payout of $367 million to several thousand AIG employees and agents.

AIG had said such actions were necessary to retain key employees.

Some members of Congress have been critical of what they regard as AIG being overly generous in compensating past and current employees after the company received federal backing of as much as $152 billion to avoid collapse.

The decision “is encouraging evidence of AIG’s willingness to work openly and cooperatively when reminded of its indebtedness to American taxpayers,” the congressmen said in the statement.

“By cooperating with the congressmen’s request, AIG realized that more than $90 million of the payouts would have gone to former employees and agents, and therefore would have no impact on retaining key personnel,” the statement said. “AIG volunteered to revise its payout plan so that it no longer applies to former employees and agents.”

The total includes $3 million in deferred compensation that would have been paid to certain executives in April.

Filed by Mark A. Hofmann of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

 

For employers looking to protect workers from religious discrimination and themselves from possible legal problems, the U.S. Equal Employment Opportunity Commission’s“Best Practices for Eradicating Religious Discrimination in the Workplace” can be helpful. The document offers a number of recommendations in four areas:

• Disparate Treatment Based on Religion (“In conducting job interviews, employers can ensure nondiscriminatory treatment by asking the same questions of all applicants for a particular job or category of job and inquiring about matters directly related to the position in question.”)

  
  

• Religious Harassment (“Employers should allow religious expression among employees to the same extent that they allow other types of personal expression that are not harassing or disruptive.”)

  
  

• Reasonable Accommodation of Religious Beliefs and Practices (“Employers should work with employees who need an adjustment to their work schedule to accommodate their religious practices.”)

  
  

• Retaliation (“Employers can reduce the risk of retaliation claims by training managers and supervisors to be aware of their anti-retaliation obligations… .”)

  
  

Sun-Times Media Group Inc., facing mounting losses at its newspapers as ad revenue plummets, asked union-represented employees Wednesday, January 7, to take a 7 percent cut in compensation to help keep the company afloat.

The company, which operates the Chicago Sun-Times and dozens of suburban papers, told union representatives that it needs the concessions to meet its goal of trimming $50 million from expenses this year, according to a memo sent to Newspaper Guild members. About 41 percent of the company’s 2,300 employees are covered by unions.

“It is important to note that none of the unions committed to anything at this meeting,” union representatives wrote to their members in a memo posted on Jim Romenesko’s Poynter Institute blog. “The union reps in attendance rightfully wanted to meet with their members to get their feedback about management’s request.”

The company pared $50 million in expenses last year primarily through job cuts and outsourcing. The latest bid is the first indication of how the company plans to complete its second round of expense reductions.

Compensation cuts could include anything from wage reductions to unpaid leave. A Sun-Times spokeswoman didn’t immediately respond to a request for comment.

Sun-Times spent $72 million—its biggest cash expense—on wages and compensation in the first nine months of last year.

Separately, the company’s board of directors sent a letter Wednesday urging investors to reject a bid by a leading shareholder to replace all but one of the board’s members.

“Your board of directors has set for management an ambitious and concrete plan to reduce costs by more than $50 million with the overarching objective of achieving cash flow neutrality in the next 12 to 24 months,” the letter said. By contrast, it said, the shareholder, Davidson Kempner, “continues to offer no concrete proposals for addressing the challenges facing the company.”

A Davidson Kempner spokesman has said that it wants to leave such plans up to its proposed new slate of directors.

Filed by Ann Saphir of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

Congressional negotiators trying to assemble a mammoth economic stimulus bill are considering including a provision to have the federal government subsidize COBRA health care continuation premiums for employees who lose their jobs, business lobbyists say.

Few details of the proposals are known, though lobbyists say their understanding is that the government would pay 50 to 60 percent of the premium, while the length of the subsidy would be 18 months, the maximum period of time employees can obtain COBRA coverage from their former employers. In other situations, such as divorce, death or marital separation, beneficiaries are eligible for up to 36 months of COBRA. A federal COBRA subsidy “has been pretty much agreed to,” said Sen. Max Baucus, D-Montana, who chairs the Senate Finance Committee.

President-elect Barack Obama also appears to back the idea. In a speech Thursday, January 8, at George Mason University in Fairfax, Virginia, Obama said his economic recovery plan would provide extensions of coverage for those who have lost their jobs and can’t find new ones.

Lobbyists said they didn’t know what criteria—such as income below a certain level—beneficiaries would have to meet to be eligible for the government subsidy.

There is precedent for federal COBRA premium subsidies. Under a 2002 trade law, the government grants a tax credit to pay 65 percent of premiums for those who lose their jobs due to foreign competition or for people 55 to 64 who are enrolled in pension plans taken over by the Pension Benefit Guaranty Corp. The tax credit also can be used to offset premiums from health insurance available from other sources, including state pools.

According to statistics provided by Hewitt Associates, about 20 percent of those eligible for COBRA coverage actually opt for coverage. That percentage, though, could rise as the economy slumps and fewer beneficiaries line up new jobs.

By law, employers can set the COBRA premium at 102 percent of the cost of coverage offered to employees. However, because beneficiaries who opt for COBRA are more likely to use medical services than employees, the premiums for beneficiaries typically do not come close to covering their costs. Experts say that for every dollar of COBRA premiums, employers pay about $1.50 in claims.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

 

Two bills that would make it easier for employees to sue for pay discrimination—and collect larger damages—are poised for House approval on Friday, January 9, three days after the new session of Congress began.

Both bills were approved by the House over the last two years. But they have to be acted on again because they did not make it through the Senate.

After an election that increased the Democratic majorities in both chambers and put a Democratic president in the White House, the prospect for the bills becoming law has improved dramatically.

The Lilly Ledbetter Fair Pay Act (http://thomas.loc.gov/cgi-bin/thomas) would restart the statute of limitations for filing a suit with each paycheck diminished by discrimination. The Paycheck Fairness Act (http://thomas.loc.gov/cgi-bin/thomas) would allow employees to pursue unlimited compensatory and punitive damages in pay suits.

The Senate won’t move quite as fast as the House. Within the next two weeks, the Senate intends to take up only the Ledbetter bill, according to Senate Majority Leader Harry Reid, D-Nevada.

“We’re going to do just that narrow issue,” Reid said at a press conference Wednesday.

Critics say the bills would significantly change civil rights law and foster costly lawsuits at a time when businesses are struggling to survive the recession.

The measures were put on a fast track by House Democratic leaders to address what they call pressing economic and social problems for women caused by workplace bias.

“It is the highest priority to us,” House Speaker Nancy Pelosi, D-California, said in a press conference call Thursday. “It is very important because of what it means for the economic security of our country.”

Proponents of the Ledbetter bill say that it is designed to overturn a 2007 Supreme Court decision. Ledbetter, a former supervisor at a Goodyear Tire & Rubber plant in Alabama, sued the company for paying her less than her male counterparts for the same job for 20 years.

Ledbetter said she didn’t realize the discrepancy existed until a colleague placed an anonymous note in her mailbox at work many years later. The Supreme Court ruled that Ledbetter should have filed a suit within 180 days of the initial discriminatory action rather than nearly two decades later.

The Ledbetter bill would make each paycheck a continuing violation. “We will reinstitute the law as it was before the Supreme Court decision,” said Rep. George Miller, D-California and chairman of the House Education and Labor Committee.

Miller said that “especially in this economy when every dollar counts” the Ledbetter decision has to be overturned because it “is costing women across the country millions and millions and millions of dollars.”

President-elect Barack Obama often highlighted the Ledbetter bill during his campaign to increase his support among women. Pelosi calls Ledbetter “our heroine.”

The House also will vote on Friday on the Paycheck Fairness Act. That measure would change a federal pay discrimination law, the Equal Pay Act, so that plaintiffs could sue for unlimited compensatory and punitive damages.

It would make it more difficult for employers to argue that the pay discrepancies are based on factors other than sex. The measure also would prohibit company retaliation against employees for discussing wages with other employees.

Opponents of the paycheck bill say it would apply to unintentional discrimination. They also say that both bills would make it easier to file class-action lawsuits and that the Ledbetter bill would significantly alter the statute of limitations for all discrimination claims, not just those involving pay.

“Unfortunately, these bills do little to prevent actual instances of unlawful discrimination, but they will open the floodgates to unwarranted litigation against employers at a time when businesses are struggling to retain and create jobs,” Jen Kubicki, vice president for human resource policy at the National Association of Manufacturers, wrote in a letter to House members.

The business community will have more time to make its arguments about the bills to the Senate.

“They’re collectively so far over the top, we have a shot to defeat them in the Senate,” said Randel Johnson, vice president for labor, immigration and employee benefits at the U.S. Chamber of Commerce.

Only the Ledbetter bill came up for a Senate vote last year. Republicans blocked it with a filibuster, which requires at least 41 votes. After GOP losses in the 2008 election, Senate Republicans are currently at 41, pending a final decision on a recount in Minnesota.

Nonetheless, Republicans are ready to fight the pay measures. Senate Minority Leader Mitch McConnell, R-Kentucky, said at a press conference Wednesday that most difficult bills have had to meet the filibuster threshold.

“I cannot imagine that the Ledbetter legislation would not be subject to 60 votes,” he said. “But that’s routine, not controversial. It’s not unusual for a senator on either side to have a problem with a bill.”

—Mark Schoeff Jr.

Workforce Management’s online news feed is now available via Twitter.

Your company wants to promote health and well-being among employees with a comprehensive program. It could include disease prevention, exercise equipment and stress management. But how do you decide what to include? The Wellness Council of America, whose mission is to help organizations develop wellness programs, suggests: Ask.

Ask your employees what they want. The council has on its site a sample survey that can be used as a guide in devising your own instrument as a first step in either developing or changing your company’s program. The survey includes among its choices employee assistance programs, educational programs, screening programs and nutrition programs.

Seeking detailed information about retirement plans? The Internal Revenue Service offers content that can answer questions about the types of retirement plans, their features and how they work. The IRS Web site covers these topics and more, and also provides a list of published guidance; newsletter Retirement News for Employers; and a section called “Tax Information for Plan Participate/Employee,” to which employers can link from their intranets. Find out more by clicking here.

I

n its goal to inform about retirement issues, the Center for Retirement Research at Boston College has produced “The Financial Crisis and State/Local Defined Benefit Plans.” The paper offers information on how the decline in DB assets affects plan participants, how the economic downturn has affected plan sponsors, and more. The information may help managers help employees sort through their concerns about how the recession, which economists say started in December 2007, may affect their retirement.