Chicago (1685)

David L. Calhoun gives a lot of credit to the people who led Nielsen Co. as cable TV was becoming prevalent.

“There was a day when the broadcast guys owned everything,” Calhoun says, referring to the big three networks of ABC, CBS and NBC. “And these guys in the cable world start cropping up. The broadcast guys said, ‘Don’t you dare mention them. I don’t want to compete with them.’”

Despite the threat, Nielsen did its job because measuring what consumers watch and buy is what the company does in more than 100 countries around the world.

“You can never fall short of measuring total consumption,” says Calhoun, the former CEO and current executive chairman at Nielsen. “If I do, I’m dead. If I don’t, I’m very much alive and my advantage gets bigger.”

Calhoun was part of a panel discussion at the EY Strategic Growth Forum® in Palm Springs, Calif., in November. He talked about how Nielsen has changed, globalization and the best advice he ever received.


Q. What is something people might not know about Nielsen?

A. We’re one of the lone representatives in measurement that has to point out the under-represented populations in this country and how poorly they are served. We have to go out to the politicians, go out to the communities and make sure our services cover the African-American, the Hispanic, the Asian-American populations. We do it and we work really hard at it. 

Then we go to our clients and try to teach them how to market better to this crowd. That’s a secret nobody knows, but it’s very important to our people. In China, we sit with the government, and we sit every quarter. We do everything in our power to suggest policies that will stimulate domestic demand because in China, that’s the key to their future.

They’ve been an export-dependent country and if they can’t move quickly on stimulating that demand, they get in trouble. So they work us hard. I wish this government worked us as hard.


Q. What does someone fresh out of college need to know in today’s world?

A. Take a trip overseas and immerse yourself in the emerging world, not the developed world. It’s fun to go to France and enjoy Paris. On the other hand, it’s not going to help you much. China, Africa — it opens your eyes and it gives you more confidence in where the world will ultimately get.

It’s all about the development of your own self-confidence. Every one of us, we start with a training program or something that gives us a little bit of confidence. As soon as we feel like we got it, we’re ready to do the next thing. We carry anxieties with us and you can’t postpone dealing with those anxieties.

When you’re confident, you can pretty much do anything. Not arrogant, confident. No one knows your anxieties. So you have to be out there with them and you have to deal with them right away. We all have them. Every single one of us. You have to be honest with yourself.


Q. What’s the best advice you ever received?

A. When I left GE, the advice I got from my former chair Mr. (Jack) Welch and a friend on our board, A.G. Lafley. They said, ‘In our tenure, the only thing we can really believe stuck, and the thing that created the most value, were values.’

So every six years, Jack tried to twist his values a little bit to refresh them and drive them. They just said, ‘If you can instill some values that the company can rally around, everything else will take care of itself.’

How to reach: Nielsen Co., (800) 864-1224 or


Learn more about Nielsen Co. at:


Why does a man who has been managing partner of the Midwest Region for EY for less than a year jump into Lake Michigan on a cold, winter’s day in January? Why does he climb the 2,109-steps of Willis Tower and bring his wife along for the trek to the top? If you’re Rick Fezell, you do it because you love challenging yourself with physical feats that test your limits. But you also see the opportunity these challenges present to show people that you’re not a stuffy, aloof leader who just sits behind his desk all day thinking about work.

“When they have people in scuba gear and snorkeling equipment 50 yards offshore and their job is to make sure you don’t hit your head on an ice block, you probably ask yourself, ‘Why am I doing this?’” Fezell says. “But it was fun. It was a great opportunity to show people that you’re just like everybody else and there is a different side to you than work. Finding things you can do that will make that statement quickly is very important.”

Fezell was named managing partner for the professional services firm’s Midwest Region in the spring of 2012. He had spent the past 20 years in Silicon Valley, most recently as managing partner for Markets in the West. So the move to Chicago was a big change, both for him and his family.

“Building new relationships and nurturing the existing relationships is something we have to do every day,” Fezell says. “But when you’re put in a new position, you really have to accelerate those things and jump-start them. That was the biggest challenge being a leader in a new marketplace.”

As Fezell jumped into his new post and the 4,500 people who now reported to him, he wanted to get up to speed with the work and the market as quickly as possible. But just as important to him was getting his family, which includes his wife and three children, acclimated to their new surroundings.

“I made it pretty clear to all of our people in those first six months when I was running around meeting with people that I had two objectives,” Fezell says. “I had to be successful in what I was doing here at work and at the firm and with them. But maybe more importantly during those first few months, I had to be successful at home getting the family integrated and getting them comfortable.”

It wouldn’t be easy to balance both priorities, but for Fezell, it was the only way he could achieve success.

“If I didn’t get my family right, it really didn’t matter how much we were growing or what our people surveys were,” Fezell says. “I would have found myself coming home to a very unhappy family or a family that was headed west pretty quickly without me.” 


Get in front of people

The key to achieving success in business is finding a way to balance and succeed on both sides of your life. Fezell’s focus on his family is as strong as it gets, but he is as devoted as anyone to EY and the work that the firm does for its clients. He quickly set out to build relationships with as many people as he could.

“I do firmly believe in the first 100 days theory,” Fezell says. “That first 100 days in any relationship is really important and people are going to form their opinions or develop their trust in you based upon that initial experience. So I hit the road pretty hard in those first three or four months to get out in front of all our people and give them a chance to know what I stood for, not just professionally, but personally.”

Fezell made plans to visit each of the region’s 10 offices and get in front of people to talk about the challenges they faced and what Fezell could do to help them.

“I got schedules of all our meetings going on in the Midwest, and I tried to get on the road,” Fezell says. “I had to be visible. Those aren’t the kinds of things you can do through voice mail or email.”

As those conversations took place, Fezell had people on hand to take notes and write down observations about what was discussed so they could be addressed.

“Collectively as a leadership team, we set up a cadence around us getting together,” Fezell says. “We do once a week for a couple hours every Monday, and we have a once-a-month all day session as a team. We’re all running around in different places and it’s important that we stay connected. We just find a way to make sure those things aren’t getting lost in translation. I wouldn’t say it’s foolproof, but I would say we do a pretty good job of keeping track of open items.”

As Fezell got to know his people, he kept an open mind to what he was hearing.

“You can become wedded to the way you’ve always done things,” Fezell says. “I thought everything I did in the West was right. Then I came to this market and realized there’s a lot of great things going on in the Midwest that I wished I would have thought of in the West. It’s all about trusting each other and knowing you can debate and challenge each other. So our firm is like that. I’m not autocratic. That’s just not my style.”


Make an impression

It was very important to Fezell that he find ways to fit in with his new home. It’s part of what drove him to dive into a frigid Lake Michigan and climb Willis Tower. But as the leader, you still need to take steps to establish yourself as the leader.

“It’s important to make changes when you come in as a leader,” Fezell says. “Let people know that you are different. Some of those changes may be people, some may be structure and some may be process. To just come in and maintain the status quo is not a good thing as the new leader. You’ve got to find a way to make your personal imprint and stamp on the practice.”

Fezell wanted his leaders to understand the importance of meeting on a regular basis and keeping in touch with each other about what was happening in the firm.

“My understanding is there weren’t these weekly meetings,” Fezell says. “There have been a couple of situations where our attendance or participation has lagged through different things and I sent out a reminder to everyone as to why this was important. Even with no agenda, sitting in a room together for an hour or two would probably be a good use of our time. We need to be meeting all the time.”

Employee survey results indicate Fezell has struck the right chord with his people.

“We went from a number of 72 percent of our employees engaged two years ago in April 2011 to 81 percent being engaged two years later,” Fezell says. “That is a big swing, a 9-point swing. What I’m most proud of is our partner level engagement went up significantly. What it proves for us is when our partners, who are our leaders, when they are engaged, it’s a much better place for everybody in the firm.” 


Be part of the team

One of the factors in that high level of employee satisfaction is the way Fezell empowers people to give as much to their families as he gives to his own.

“Nobody punches a clock around here,” Fezell says. “We trust you. You’re a professional and you’ll get your work done. I used to work really hard in San Jose when I was an audit partner. But when my girls were in elementary school, I found the time a few times a year to just show up at school and pick them up in the afternoon and take them to a matinee movie.

“To some people, it may seem like, ‘What’s the big deal about that?’ But in this environment, doing that and telling people that you’re doing that creates a license for people. We’re proud as a firm of what we’ve done around flexibility. We trust our people and encourage them to take advantage of that flexibility.”

It becomes even more crucial when tax season hits and everyone, including Fezell, has to work long hours.

“You’re going to get those periods when you work hard, but we try to tell people to take advantage of the down time you have,” Fezell says.

When everyone works together as a team, Fezell believes a great deal can be accomplished.

“You’re the new guy in town and you get asked to do about 35 different things quickly in the community,” Fezell says. “How do you hone in and how do you decide on where to play?

“In that arena, I relied on the group I mentioned, but I also relied on some folks outside the firm in the community, strong community leaders in business. I really spent time with a couple of those people, and they were very helpful to me in prioritizing or making me think about where I should play.”



  • Focus on your family.
  • Look for opportunities to change.
  • Be flexible.


The Fezell File

Name: Rick Fezell
Title: Managing Partner, Midwest Region
Company: EY

Born: New Brighton, Pa.

Education: Bachelor’s degree in business administration, Westminster College,
New Wilmington, Pa.

What did you want to be when you grew up? I wanted to be an NFL player. I was a defensive back. It’s a fun position, but it’s better if you’re 6 inches taller and faster. I went to school and I was able to play Division III college football.

What lessons did athletics teach you? Athletics are the best training ground for this profession. To the outsiders, we seem like accountants and CPAs and tax people who work solo in our office. But we’re all about teams. Our clients are served by teams ranging from three to 53. If you can’t work together as a team, if you can’t set aside your personal goals and work together on the collective success of the team, this probably isn’t the profession for you. I played sports all my life and the lessons and the values you get from team sports can’t be replicated anywhere else.

Who has had the biggest influence on you? Probably my mother. She’s a great lady. She was divorced, so she raised us on her own for a while until she remarried. Her message to us: “Would you do this if I were standing next to you?” So I always had that fear. Not that I always did everything right, but her view was she never liked parents who always assumed their children were guilt-free and saints. Her view was we were guilty until we could prove we were innocent. So if we were expecting her to be our protector when we got into trouble, we had the wrong expectation. 

Who would you like to meet?  President John F. Kennedy. I’m amazed by him. He just seemed like he could lead better than anybody and great leadership is something to treasure.


Learn more about EY at: 

Twitter: @EYnews
Mobile apps:


How to reach: EY Midwest Region, (312) 879-2000 or

Wellness in the workplace isn’t just implementing a program, it’s about establishing a culture of wellness that promotes healthier lifestyles, says Liz Howe, director of business development at Benefitdecisions, Inc. 
“It’s not something you try and then decide whether you maintain it. A good program requires a well thought out strategy and budget,” Howe says.

Smart Business spoke with Howe about simple steps businesses can take to create a culture of wellness, and how to structure a program that delivers results.

What’s involved in creating a culture of wellness?

There needs to be champions within the organization, including total buy-in at the C-suite level. Communication is very important — let employees know that the company cares about them, that the wellness program is not an attempt to figure out if they have any health problems but ensuring they are as healthy and fit as possible. 

As for the wellness program itself, it should function outside of your health insurance provider so it doesn’t need to change if you switch carriers. Programs should include biometrics screenings — basically a blood draw. Conduct screenings at the workplace to make it easy for employees to participate.

Are those screenings then used to develop programs and set goals?

The initial goal is for every employee to know their numbers — cholesterol levels, blood pressure and body mass index. That information alone provides ample motivation for most people to consider making behavior changes. Employees receive confidential ‘health’ report cards, and the employer gets an aggregated summary of the health conditions that exist within the organization. Based on that information, the employer can create targeted activities like walking, smoking cessation or targeted educational programs.

You could bring educational 
support in to the office — a nutritionist to host healthy cooking demonstrations, a fitness instructor to conduct stretching and yoga. The idea is to change behavior, and making it fun makes it easier. Furthermore, the same data can drive strategy related to the medical plan design;
if a company has a large percentage of diabetics and the health plan has a pharmacy co-pay for prescriptions, it might be less expensive for the employer to provide free insulin, thereby increasing Rx compliance and reducing emergency room visits.

Wellness programs work best when reasonable goals are set. Create a baseline by measuring unscheduled absenteeism and instances of disability claims before the program is rolled out. Tying activities to a competition or ‘gamifying’ the program can help get employees excited about participation and provides a secondary benefit of building higher-functioning teams. We have a walking competition, and everyone has a device that tracks steps and activity on treadmills, bikes, ellipticals, etc. This promotes friendly competition and team building, which links to engagement and creates more highly engaged employees. 
What other outcomes can companies expect from wellness programs?

Unscheduled absenteeism will be reduced, as well as short-term and long-term disability claims. Those alone will drive increased productivity. Some companies talk about reducing medical costs, but it’s difficult to build a business case that medical claims were prevented and therefore money was saved. But, with proper understanding about how a business works, wellness can be tied to productivity gains. The biometrics screening is the most meaningful part of the program. So many people don’t know their blood pressure, cholesterol and body mass numbers, partly because they don’t see a doctor unless they’re sick.

An effective way to ensure participation is to provide subsidies for health insurance. Giving someone a subsidy of $100 a month to take part in the wellness program is meaningful to them. The information they receive from the screening is powerful. Good things happen when people are made aware of
their health and what’s happening inside their bodies. Ultimately, they will start changing their behavior over time.
Liz Howe is Director of Business Development at Benefitdecisions, Inc. Reach her at (312) 376-0452 or
Insights Employee Benefits is brought to you by Benefitdecisions, Inc.
The cost of business litigation is inherently uncertain because of unforeseen maneuvers by your opponent and unexpected rulings by the court. However, there are things that you — as the client — can do to reduce your litigation costs, including your attorneys’ fees. “Experienced clients know how to efficiently use their litigators,” says Monte L. Mann, a partner at Novack and Macey LLP.
Smart Business spoke with Mann about how to reduce your business litigation expenses.

How can you be sure your attorney has a clear understanding of your case?

Introduce your litigator to your case efficiently. Before your first substantive meeting with counsel, prepare a written narrative that:
Provides general background on your industry and your business.
Explains all of the material facts of the dispute in chronological order.
References and attaches all important documents — such as key contracts and correspondence.
In other words, ‘tie it up in a bow.’ No doubt this will require substantial time and effort, but it is the most efficient way to convey the information to your counsel, and it will be an excellent reference point for you and your counsel throughout the entire case.

What can be done to better understand the costs you might incur?

Your first meeting with counsel should include a discussion of your goals for the lawsuit. What outcomes, short of a trial, are acceptable to your business?

are the essential terms that you would require as part of any settlement? Communicate your goals and ask your counsel whether he or she believes your expectations are realistic. Insist that your counsel formulate a strategy to achieve your goals and estimate the time frame, legal fees and costs to execute the strategy to secure those goals. You may be surprised by the plan and the estimates, and this, in turn, may change your perspective about acceptable outcomes.
How are the expenses of discovery best managed?

The discovery phase in litigation requires that each side disclose all relevant facts, produce all relevant documents and present all relevant witnesses for depositions. The proliferation of computers has greatly increased the costs of producing all relevant documents because it is expensive to search computer servers for files, emails, voice mails and texts. 

Have your counsel try to negotiate with the other side to reduce these costs by agreeing to limit the searches for relevant documents by date ranges and particular employees, and by limiting the number of depositions each side will take. In addition, when you produce your own documents to your attorney, it is helpful, and saves money, if you identify the source of the documents — i.e., Employee John Doe’s files — and provide a general index of the documents, for example, ‘correspondence with vendors,’ ‘financial projections,’ ‘Employee Jane Doe’s personnel file,’ etc.
Are there different ways to handle billing?

There are many alternatives to the conventional fee arrangement, which is hourly rate billing. Examples include: contingent fees; reverse contingent fees, where compensation is based on avoiding liability; blended rates, which blend the lower rates of junior lawyers and higher rates of senior lawyers into one blended rate for all; fixed or flat fees, where the law firm charges one price for the engagement regardless of how many hours it requires; and combined approaches, such as a low blended hourly rate, plus a contingency. Explore the alternatives with your counsel. 

Are attorney’s fees tax deductible?

Tax deductions will not actually lower your legal fees, but they can reduce your taxable income. Remember that legal fees for securing tax advice and business legal fees are often tax deductible.
Monte L. Mann is a Partner with Novack and Macey LLP. Reach him at (312) 419-6900 or
Insights Legal Affairs is brought to you by Novack and Macey LLP
The goal of any incident response is to minimize the impact of a negative event on an organization’s objectives. This involves responding to an incident as quickly and efficiently as possible, making good decisions to limit further damage and repair any damage that has been done. In order to accomplish this, an organization should have a corporate response plan (CRP) in place that is ready to go at a moment’s notice. A CRP typically includes an oversight committee that will design the CRP and oversee the work of the corporate response teams.

Smart Business spoke with James Martin, managing director at Cendrowski Corporate Advisors LLC, about the finer points of a CRP.

What sort of events should be addressed with a CRP?

A CRP is a natural extension of an organization’s risk management process and can be designed to address risks that are particular to an organization and its industry. Such a plan could help manage risks that have a high likelihood of occurrence and a high impact if they were to occur. An organization might have
several CRPs, each designed to address specific events, for instance cybercrime, fraud, business interruption and other public relations disasters.

Why does an organization need a CRP?

Risk management attempts to identify and mitigate risks, however, it is impossible to completely prevent risk occurrence or even to identify all risks facing an
organization. This is why an organization needs to be ready with a plan. The future really is unknowable; the goal of the CRP is to make sure the organization has a mindset of preparedness and the basic tools to manage a risk occurrence when it happens.

What are the basics for setting up a CRP?

Setting up a CRP is an extension of the risk management process. It involves deep planning around what tools will be needed for specific threat types and proactively ensuring they will be available. When a risk actually occurs there will be no time for planning and coordination, so it needs to be done upfront. Consider who should be involved, both from a company perspective and any outside experts who would be required. Identify the information that’s essential to evaluate the extent of the threat and analyze an appropriate course of information. Also, consider procedures to ensure that data and information are adequately preserved and available for the CRP.

Who should be involved?

A corporate response committee should tailor the CRP for the company situation and determine who should be involved with the operation of a response team. The team is responsible for operating the CRP when an event occurs. Of course, for IT security events the committee should include members of the technology team. The members of the committee should be senior management so they can authorize the CRP and provide team members with the authority to examine transactions and events on behalf of the committee.

What are the keys to success?

Planning needs to be done to progress from threat identification to a desired outcome — the organization needs to determine the acceptable end resolution.
This will also vary by threat type, but should consider the overall goals of:
Minimizing business impact.
Resuming normal operations.
Repairing any damage done.
Consideration should always be given to the need for confidentiality. For certain threats, such as a report that fraud has occurred, the CRP should involve confidentiality during the process to ensure that the investigation can proceed appropriately and protect the rights of the parties involved. As with any other risk management activity, the CRP should also include an evaluation process to gauge the effectiveness of the response and identify areas to improve. Also, the risk occurrence and mitigation information should be used to check if prior risk evaluations for risk impact and likelihood ratings need to be updated.
James P. Martin, CMA, CIA, CFE, is Managing Director for Cendrowski Corporate Advisors LLC. Reach him at (866) 717-1607 or
Insights Accounting is brought to you by Cendrowski Corporate Advisors LLC
Friday, 03 January 2014 10:44

Weighing in on health care reform: Chicago

Written by

The Patient Protection and Affordable Care Act, often called the Affordable Care Act represents some of the most far-reaching government overhaul of the U.S. healthcare system since 1965 when Medicare and Medicaid came into being. It will be phased in over time, but a number of changes have been delayed and won’t be in effect until 2015.

The act focuses on increasing the rate of health insurance coverage for American and reducing health care costs. Here’s what some area businesses have on their minds about health care reform as the time nears for the full impact of the ACA: 

Craig Vodnik
co-founder and VP of operations

How is your company preparing for changes associated with health care reform? 

We don’t expect the changes to affect us as we already offer great health care to our employees. However, we will have to wait and see if the new law affects the health care we currently offer. 

Have to studied or instituted wellness programs to contain health care costs for your employees? 

Yes, we currently have a wellness program that includes a fitness challenge, running club and bringing in wellness-related speakers to the office (i.e. ergonomic experts, bike safety, etc.). Next year, regardless of the U.S. health care reform, we are planning a full year wellness program as we’ve seen the benefits of them. It not only rewards employees for their efforts with prizes such as round-trip airline tickets, but we’ve seen camaraderie and teamwork improve as well. 

What other things are you doing specifically to contain health care costs for your employees? 

Many years ago, we decided to offer multiple health care plans — not just one at a high cost to the company and the employee. This offered a good plan at a lower cost for employees that don’t use it much. We also offer an HSA so employees can pay for out-of-pocket health care tax-free. 

Do you foresee having employees pay a larger share of company-offered health care coverage?

We do not foresee a change in the current employer/employee health care contribution. However, we believe employees paying a meaningful part of health care costs helps them realize the real cost of health care. This better enables them identify which plan is a best fit for them, and if they choose a lower-cost option, it in turn lowers our costs as well.


Thomas Moran
Addison Group 

How is your company preparing for changes associated with health care reform? 

We believe that we are an Employer of Choice in our industry, it is important for us to offer medical plans that are compliant under ACA and our employees would not be subject to the individual mandate penalties for not offering ACA-compliant plans. 

Have you studied or instituted wellness programs to contain health care costs for your employees? 

In 2014, we will be offering a wellness plan to our employees for the first time in the Company’s history.  The wellness program will reward employees for maintaining a healthy lifestyle and having an annual physical.  We plan to continue to develop our wellness programs for 2015 and beyond. We will add more incentives and encourage our employees to focus on their overall health and wellness. 

What other things are you doing specifically to contain health care costs for your employees?

In 2014, our benefits will be administered through a private health exchange.  This will provide our employees with more options for their medical coverage which will result in better consumerism by the employee.  We believe this will lower health care costs as employees will select a medical plan that fits their current lifestyle needs.  Whereas in the past, we had a limited number of medical plan options which resulted in some employees being “over insured.” 

Do you foresee having employees pay a larger share of company-offered health care coverage? 

We do not foresee a change in the current employer/employee health care contribution. However, we believe employees paying a meaningful part of health care costs helps them realize the real cost of health care. This better enables them identify which plan is a best fit for them, and if they choose a lower-cost option, it in turn lowers our costs as well.


Dave Michelson
President and CEO
National Interstate

How is your company preparing for changes associated with health care reform? 

National Interstate typically reviews all our benefit programs on an annual basis. The enactment of health care reform has not materially changed that process; it has simply added another layer of compliance-related items that we must be mindful of.  Our primary goal of providing benefit programs to meet the needs of our employees and their families remains unchanged. 

Have to studied or instituted wellness programs to contain health care costs for your employees? 

Over the last several years, National Interstate has implemented a variety of wellness programs primarily in response to our employees including initiatives such as an onsite flu shot clinic, monthly newsletter, health fairs including screenings and wellness vendors, as well as lunch and learn speakers. There is no question employees have greater access to information and resources promoting healthy lifestyles than ever before. For an employer, it can often be difficult to quantify the results of individual employees reaching their health goal. It may simply mean that employee was able to attend a son or daughter’s soccer game. Those kinds of results are important in addition to focusing on healthcare cost containment. 

What other things are you doing specifically to contain health care costs for your employees? 

We believe educating employees about the plan they participate in is a key factor in containing health care costs. Most medical plans have discounts and incentives already built into the plan design, yet many times employees don’t fully utilize these features. We work in conjunction with our health care provider to disseminate information to employees so they can make informed health care decisions. 

Do you foresee having employees pay a larger share of company-offered health care coverage?

It is impossible to predict what the future holds in terms of health care costs. What we do know is if our employees collectively work as a team, we have the best chance of minimizing health care costs for our organization. While we make health care choices as individuals, the impact of those choices from a rate perspective is felt amongst the group participating in the plan.

Anthony McBride
Principal, human resources
Edward Jones

How is your company preparing for changes associated with health care reform? 

We have been making changes to eligibility and benefit levels as required by the regulations since the passage of the Affordable Care Act. We have made required modifications to our group medical plan to ensure that it meets the guidelines for 2014. We will continue to closely monitoring the regulations so that we are prepared to meet future requirements of the law.

Have you studied or instituted wellness programs to contain health care costs for your employees? 

We have had a wellness program in place for several years, and anticipate it will help contain cost increases in the future by motivating our plan members to be aware of and gradually improve their health over time.

Due to health care reform what other things are you doing specifically to contain health care costs for your employees? 

By 2009, we had moved to a consumer-driven health plan model. Our plan includes some pharmacy and medical treatment programs that help direct members to lower cost, higher quality sources of care. Soon we’ll introduce online cost/quality transparency tools to help raise awareness of the disparate cost spread that can exist even within an approved provider network. 

Do you foresee having employees pay a larger share of company-offered health care coverage? 

While we do not plan to shift a greater proportion of the cost to associates in 2014, the overall costs for health care continue to rise. In this regard, we have added a surcharge to cover spouses who have their own employer-based coverage available. We cannot speculate on what may happen in the future because the health care landscape is undergoing so much fluctuation.


Restaurants, hotels and other hospitality companies that have not traditionally offered health insurance benefits to employees are struggling to meet the mandate to provide a plan or face penalties starting in 2015 under the Affordable Care Act (ACA).

That need has prompted the insurance industry to respond with cost-effective strategies to help companies with low-wage employees avoid some of the penalties for not providing health insurance coverage.

“There are gaps in the regulations that have allowed the insurance industry to create products to address this issue,” said Daniel L. Meracle, a partner at Benefitdecisions, Inc.

Smart Business spoke with Meracle about which health benefits solutions make sense for businesses in the hospitality industry.

What plans are available to address the need for companies to avoid penalties while controlling costs?

The ACA does not mandate that doctor or hospital visits, prescription drugs or laboratory services be included in the definition of minimum essential coverage (MEC). MEC is what employers are required to provide or pay a penalty of $2,000 per employee, minus the first 30 employees.

Also, self-funded plans do not have to offer coverage for any of the 10 essential health benefits. However, all group health plans must provide ‘recommended preventative services’ at 100 percent with no deductible, copayments or coinsurance. That leaves an opportunity for self-funded MEC plans that provide unlimited coverage for preventive services as the only benefit.

MEC plans are funded at the maximum liability level of about $50 per person, per month. An employer can have the employee pay the entire $50 premium or the employer can pay part or all of the premium. Just by offering MEC to employees, the employer avoids the $2,000 penalty while meeting the employee’s requirement for having coverage, so the employee isn’t liable for the individual mandate of $95 or 1 percent of income, whichever is greater.

In addition to the MEC, employers can add another layer of benefits by providing a limited medical plan that pays first dollar, meaningful benefits for emergency room, doctor’s office visits and prescriptions — the expenses that really impact the budgets of lower wage employees. Those plans start at $50 to $80 a month, and employers can have employees pay all or nothing.

Even if employees pay the entire cost, they can benefit by using pretax dollars if the plan is offered by the employer, rather than purchasing the coverage individually.

But wouldn’t the limited medical plan option still leave companies liable for penalties related to minimum value and affordability?

Yes, an employer would need to offer the next level of coverage, which is a minimum value plan, or be subject to a $3,000 penalty if an employee purchases a plan on the exchange and receives a subsidy. To meet the affordability test, the employee must pay no more than 9.5 percent of his or her income for the employee-only coverage.

However, you’re dealing with a smaller pool of employees at this point because, even at 9.5 percent of income, it’s going to cost the employee about $2,000 a year for a plan that has a deductible that ranges from $2,000 to $6,000. Employees will not see the value in that, since their contribution and the deductible will represent more than 45 percent of take home pay and they will decide to pay the individual penalty or take the MEC.

Therefore, many employers will stop after the first two options — MEC and limited medical benefits — and risk the liability of the $3,000 penalty because they will not be affected by that many employees. If you start with 10,000 employees and wind up with several hundred that actually go to the exchange, get coverage and receive a subsidy, you’ve reduced your liability tremendously from having to pay $2,000 per employee for all employees.

Even if the employee goes to the exchanges and receives a subsidy, their remaining cost for the plan and the same deductible levels of $2,000 to $6,000 will be a large portion of their take home pay, so many of them will not purchase the coverage in the exchanges either.

A number of insurance carriers have developed MEC and limited medical benefits plans because they see tremendous market potential in them.

Daniel L. Meracle is a Partner at Benefitdecisions, Inc. Reach him at (312) 376-0433 or

Insights Employee Benefits is brought to you by Benefitdecisions, Inc.

Expert witnesses are frequently used in the courtroom by attorneys. While many qualified experts exist, the “right” expert can greatly assist counsel and the litigation with his or her testimony.

An expert witness can offer testimony about a scientific, technical or professional issue in a court case. Finding the right expert is often a difficult task, but attorneys generally look for several attributes when selecting expert witnesses.

Smart Business spoke with John T. Alfonsi, managing director, Cendrowski Corporate Advisors LLC, about the qualities attorneys look for in an expert witness.

What are the key attributes an expert witness should possess?

Attorneys generally seek an expert witness who possesses at least four attributes: Relevant professional experience; a history of testimony in which that person has represented both plaintiffs and defendants; active involvement in his or her field of expertise; credentials.

Why are professional experience and testimony history both key qualities?

Opposing counsel may try to discredit an expert witness by demonstrating a lack of relevant business and/or courtroom experience. Though a potential expert may have years of experience, this does not necessarily mean he or she has a high level of expertise in the specific area of the case, or that his or her experience demonstrates the unbiased nature that an expert must possess.

For example, some experts have only provided their services on behalf of either the defendant or plaintiff. Such a track record might be used by opposing counsel to infer a bias on the part of the expert, even if the bias does not exist.

Why is active involvement an essential quality of an expert witness?

Active involvement often manifests itself in an expert’s writing and speech; both are key elements of his or her testimony. Experts who contribute to their field generally pride themselves on having a thorough understanding of the subject matter. They may be most up to date on recent rulings and opinions regarding relevant analytical techniques, and will generally ensure their testimony complies with these items.

Active involvement may also manifest in the expert’s ability to convey findings to nontechnicians. Experts primarily work with individuals who readily understand the technical terms and analytical methods of the field. This peer group may be quite different from a judge or jury pool.

Involved experts will recognize this difference and have a profound understanding of their area of expertise so they can better articulate their findings.

Do attorneys generally look for specific credentials in selecting an expert witness?

Attorneys generally engage experts who hold credentials in their field, requiring the expert to pass rigorous tests, participate in continuing education programs and/or possess significant related experience. Multiple credentials adhering to such criteria might exist in some fields.

For instance, business valuation credentials fitting the previously mentioned criteria include: Accredited in Business Valuation (ABV), Certified Valuation Analyst (CVA), Certified Business Appraiser (CBA) and Accredited Senior Appraiser (ASA). No one credential is generally better than the other, but credentials generally emphasize the expert’s commitment to his or her profession and understanding of the technical issues.

Is analytical ability the most important attribute of an expert?

It is a key attribute, but sometimes not the most important. Though an expert may have strong analytical abilities, it is important that he or she be able to articulate his or her findings in a clear and concise manner, both on the stand and in written testimony.

To specifically address this issue, some experts purposefully make liberal use of visual tools, including graphs and flowcharts, and include detailed explanations to ensure findings are well articulated and written at a level that nonbusiness professionals can fully comprehend. These experts might also assume a reader has little- understanding of the technical aspects of the case, or of the analytical methods employed.

This strategy helps ensure a reader or listener will not be confused by necessary technical jargon or methods that might otherwise be nonintuitive to a layperson.

John T. Alfonsi is managing director at Cendrowski Corporate Advisors LLC. Reach him at (866) 717-1607 or

Insights Accounting is brought to you by Cendrowski Corporate Advisors LLC

More legal disputes are being resolved through alternative dispute resolution (ADR) in an effort to sidestep the often high cost and long timeline of traditional litigation. ADR is often a mystery, however, because it doesn’t receive the same attention that typical courtroom proceedings do through traditional media. Parties considering ADR should know the differences between and benefits of arbitration and mediation.

In addition to often being less expensive and quicker than litigation, arbitration and mediation both rely on a neutral third party to assist the parties. Both proceedings are usually confidential, and the record and resolution do not become a matter for the public. But the similarities end there.

Smart Business spoke with Brian E. Cohen, an associate at Novack and Macey LLP, about when arbitration or mediation is the appropriate solution.

What is arbitration?

Arbitration is like a typical litigation proceeding in that the arbitrator, or arbitration panel, will, in many ways, act like a judge and determine the respective rights of the parties. An arbitrator’s ruling is a final, binding resolution.  
A growing number of commercial contacts contain arbitration clauses that require the parties to use this ‘stripped down trial’ process rather than litigating their case in court. The specific form of arbitration differs from case to case, but often involves reduced document discovery, limited witness testimony and fewer procedural restrictions than accompany a traditional court case.

What is mediation?

Mediation is a less formal process through which the parties attempt to settle their dispute by mutually agreeing on the outcome. The mediator is there to facilitate a conversation that offers the parties an opportunity to express their interests, listen to the other side’s point of view, and, in some cases, agree to resolve their dispute.  

Mediators do not deliver a judgment, determine the parties’ rights or declare one side the winner and one side the loser. He or she does not have the authority to compel the parties to do anything. In mediation, each party retains control over its fate rather than surrender that control to a judge or jury. At the end of the day, only the parties can decide whether or not they want to agree to a particular set of settlement terms.  

How should clients prepare to enter into either mediation or arbitration?

As with a trial, the goal of arbitration is to ‘win.’ Is there anything the client should know about the arbitrator(s)? What are the strengths and weaknesses of the case? How can the client be helpful during the proceeding? Of course, attorneys and clients should discuss whether the client, or any of its employees, is going to testify at the arbitration, and be sure to go over that testimony.   

Preparing for mediation is different, however, because the goal of mediation is not the same as the goal of arbitration. Attorneys and clients should discuss and agree on their particular goals ahead of time. Is it to settle at all costs? Is it to get close to settling with the hope that the other side’s offer might improve a few days later? Is it simply to have an opportunity to be heard by the other side — to hear their perspective?

After the goal has been established, logistical issues remain. Will the client speak to the mediator or to the other side during the mediation? Will the client or attorney make an opening statement? If the client is going to verbally participate, what kind of message would be best for the client to deliver?

In either case, clients should be sure to talk to their lawyers about what to expect from the process and how to best prepare for whichever form of ADR they are using.

Brian E. Cohen is an sssociate at Novack and Macey LLP. Reach him at (312) 419-6900 or

Insights Legal Affairs is brought to you by Novack and Macey LLP

Emergency room overutilization is a prevailing problem for most employers. For example, looking at HealthLink’s book of business, almost invariably more than 65 percent of ER visits are for non-emergency reasons. They fall into the categories of disease and virus or symptom, such as headaches, gastroenteritis, sinusitis and influenza.

“The cost of an average ER visit ranges from $1,300 to $1,500, but the average urgent care or client visit ranges anywhere from $120 to $500,” says Mark Haegele, director of sales and account management at HealthLink.
“If you move any of those visits from the ER to other care settings, you’re saving roughly $1,000 per visit,” he says. “And hundreds of visits add up to hundreds of thousands of dollars.”

Smart Business spoke with Haegele about turning member information into intelligence, in order to control plan costs.

What’s the first step to creating a strategy to decrease ER utilization?

It’s important to look at your health plan membership data to find patterns. Then you can focus on a communication strategy and specific messaging to change behavior. It helps if your health care plan is partially self-funded or self-funded because you typically have access to more data.

To determine what actions to take to control ER utilization and cost, first look at the number of visits your group has in 12 months, comparing that year-over-year. Even if you’re not seeing an increase, there will be opportunities for cost containment.

Also, find out if you have a frequent flier issue. Are people going to the ER three or more times in a given year? Are some going five or more times? Determine what days of the week people are visiting the ER. If there’s a spike on weekends, educate members on how to access other care settings on Saturday or Sunday. You can look at where the emergency care is taking place. Is it isolated to a particular community or split across a region of the country? Finally, break the visits down by disease, virus and symptom versus injuries and poisonings. If someone breaks an arm, for example, he or she is going to go — and should go — to the emergency room.

Once you’ve examined the data, what’s next?

Once the data is gathered, and you’ve discovered some of the challenges, set up metrics. If your average number of ER visits have been consistently at X per 1,000, or X per year if your membership has been consistent, then the question becomes can you eliminate 30 or 40 percent of the visits for disease, virus or symptoms? That’s your target for the following year.

How can employers educate and influence health plan members?

You need to come up with a multi-faceted communication strategy. Create one piece of communication that goes to all members, such as a flier on the proper use of the ER. But you also should reach out to certain groups differently, such as frequent fliers.

Use the information about what hospitals members are visiting to generate a directory of urgent cares and clients in and around the same zip code. Nearly 80 percent of adults ages 18 to 64 visited the ER in 2011 due to lack of access to another provider, according to Amerigroup. Another way to influence members is to ensure they know the number for the health plan’s 24-hour informational nurse line, which most plans have.

The more you share specific costs in your communications, the better people will respond. Include a grid that specifically shows the cost to the employer and member for all different care settings.

Another idea is to communicate a list of non-emergency diseases or symptoms that create overutilization. This gives people food for thought. And put it in plain English. Don’t say gastroenteritis; say stomach pain. Don’t say urinary tract infection; say kidney pain. However, be careful how you coach this; you don’t want to tell people not to go to the ER. It’s more about awareness and education.

What about raising co-pays?

Yes, higher co-pays get people out of the ER, but raising the cost has become too abused — and it often gets shifted from the employer to members. Before you start digging into the member’s pocket, give them the opportunity to do the right thing on their own.

Mark Haegele is director of sales and account management at HealthLink. Reach him at (314) 753-2100 or

Insights Health Care is brought to you by HealthLink