Sue Ostrowski

With employers facing ever-rising health insurance premiums, most are looking to control costs.

They may increase co-pays and deductibles, or decrease benefits. But there are other steps to accomplish that goal without impacting benefits or increasing employees’ costs, says Mark Haegele, director, sales and account management at HealthLink.

“Lowering the cost of health care is driven by managing utilization,” Haegele says. “There are a number of things in your data covering members’ use that you can address to help control costs. Too often, people are not educated about alternatives to the emergency room.”

Smart Business spoke with Haegele about how to lower the cost of health care without modifying benefits.

Where should employers start?

From 1996 to 2006, the annual number of U.S. emergency room visits grew from 90.3 million to 119.2 million, and from 34.2 to 40.5 visits per 100 residents. So, look at emergency room usage and other high utilization data points to identify trends. By focusing on those areas, you can ultimately have an impact.

Identify if overuse of the ER is an issue, and, if it is, what is driving it. Then you can implement action plans to lower costs for that high-cost category.

What should an employer be looking for?

Over the last three years, has the number of visits per member per month gone up year after year? And, has the cost per member per month gone up year after year? If yes, ask why.

Look at frequency of visits per person to identify whether a subset is going to the ER 10 or more times a year. If yes, determine how to address those people. Do you need case management nurses to help them find a better path to care? Do they need help finding a primary care physician? Can you educate them on alternatives?

Also, look at the reasons for ER visits. There are two categories — symptom, injury or poisoning, and disease and virus. If someone breaks an ankle, that person is going to the ER. But the disease and virus category is a different story. More than 60 percent of ER visits are for things such as sinusitis, flu, cough, headache, etc. This category can be managed.

Twenty-four hour nurse lines, urgent care clinics and clinics in pharmacies all are lower-cost alternatives. The cost of the ER averages $800 to $900, versus $65 to $150 for the alternatives. If more than 50 percent of ER visits fall into disease and virus, you know where to focus your energy to modify utilization and create awareness.

Emergency room management: Getting care when you need it quickly. Learn when to use the ER, or not.

How can employers create that awareness?

Education is No. 1. Post information, do emails blasts, distribute articles, do payroll stuffers, anything you can to get the word out.

Many employers have penalties, so if an ER visit is not a true emergency under the plan design, it doesn’t pay. But hospitals have ways of getting around that. Typical plan designs waive that penalty if a patient is admitted. Guess what? Now your admissions just went up.

A better approach is to educate people. And explain that if the ER coinsurance is $150, that’s $150 out of their pocket, whereas at an urgent care center the cost is much less. And often the wait is shorter. Sell your members on appropriate lower levels of care that are more easily accessible, less expensive and more convenient.

How do hospitals play into the equation?

Hospitals code ER visits from one to five, with five being the most severe, but some hospitals never code lower than three. As a result, if employers identify overcharging for ER visits, address the issue with the hospital.

The employer, with the insurance company, can co-write a letter with the high coding data, while asking the hospital to reconsider the way it’s coding ER visits and to consider establishing an urgent care center for lower level visits to the facility. One letter isn’t going to result in a new facility, but it does create awareness, and often coding starts to be more appropriate. The employer, the hospital, the member and the insurance company have to work together, as they all have a stake in the game. Everyone shares equal responsibility in managing this.

Mark Haegele is a director, sales and account management, at HealthLink. Reach him at (314) 925-6310 or

Insights Health Care is brought to you by HealthLink

Doing business with a large bank may seem like an attractive option for a growing business. But at a large bank, a smaller business can get lost, as some banks are increasingly turning their focus to larger customers, says Kevin Ball, head of commercial lending at Lorain National Bank.

“A local bank can offer a number of unique value propositions, including experienced staff who are familiar with your industry, a flat organizational structure allowing access to decision makers and quick decision making and execution,” says Ball.

Smart Business spoke with Ball about how a local bank can tailor its services to your business’s needs.

How can partnering with a bank whose staff has decades of experience benefit a business?

That kind of experience is necessary in order to quickly understand a business and determine its needs and if the bank can meet those needs. Businesses often complain that banks take their information, then it takes forever for them to come back and make a decision.

If a bank can make a quick decision, even if the answer is no, and explain its reasoning, the relationship can be preserved, leaving the door open for future opportunities with that business. That sounds easy to do, but it is quite rare to find in the banking world.

How can industry-specific experience help a bank serve businesses?

If a bank has done a lot of business in a certain industry, its bankers have built up experience with and knowledge of that industry. Because they see different companies in the same industry and know how things are done, they can provide more than banking solutions; they can also provide insight into that industry and advise a business owner on something he or she may not have thought about.

Bankers at smaller, local banks are also more likely to sit on boards in the community. They are deeply ingrained in the communities they live in and attend functions and get to know the community’s business leaders. This can help them spot potential needs and allow them to talk with potential clients about their needs before they even walk into the bank.

What are some other pieces of the value proposition of a local bank?

A smaller, local bank doesn’t have layers of management and is more streamlined than a national or international bank. Bankers can visit a business owner and bring with them the head of credit, or the president. Those are the decision makers, and that gives them the opportunity to really get to know your business. There aren’t many large banks where you will get that kind of personalized attention.

In addition, smaller banks tend to be heavy participants in the SBA loan programs. That helps them mitigate some of the risks that might be involved in the transactions and can accelerate lending to small businesses.

How can partnering with a local bank help a business owner develop long-term relationships?

At a local bank with experienced bankers, business owners get to know their bankers. At larger banks, people are often trained by rotating them through departments, and business owners may speak with someone different every time they call the bank. Smaller banks are less likely to do that, and with an experienced staff, you are dealing with the same people every time you call, giving you the opportunity to build that relationship.

How do those relationships result in a better match of banking products?

It allows the bank to better tailor products to a business’s needs. The banker has time for work with individual businesses to find out exactly what they want and need, tailoring solutions to that, as opposed to a big bank approach, which often views smaller businesses as too small to do business with.

A lot of big banks say they’re lending, but they’re not. A business owner might find more success with a local bank, which will take the time to understand their business.

Are a local bank’s clients limited to the area?

Not necessarily. With today’s technology, the reach is broader. It’s no longer necessary for banks to have branches on every street corner. Modern treasury management provides the technology to scan items and use an Internet-based system. If you find a bank that offers great service and solutions that fit your business, its physical location isn’t as important.

How does the market for lending look going forward?

There is currently a good balance of activity and an increasing amount of optimism in the marketplace. Car dealers are having a great year so far, business is booming for some manufacturers and industrial space is starting to get tighter. Although the media tend to focus on negative stories, there are a lot of businesses that are thriving.

Kevin Ball is head of commercial lending at Lorain National Bank. Reach him at

Insights Banking & Financeis brought to you by Lorain National Bank

The property tax bill comes in the mail, and you pay it. But do you ever really look at it to determine whether you are paying the right amount?

“Property tax on the real estate and personal property that you own or that you lease is part of the overhead of the operation of your business,” says Carl Rashid Jr., leader of the Property Tax Appeals practice group at Dykema Gossett PLLC. “You want to make sure you are paying your fair share of taxes, but you certainly don’t want to pay more than your fair share.”

Smart Business spoke with Rashid about how to make sure you’re not paying too much, and, if you are, how to return that money to your bottom line.

Why should business owners be concerned about their property tax bill?

Real estate values have declined in the last few years, making it a good time to review the amount of taxes that you are paying. If your property was formerly worth $1 million, and you know for a fact that you could not get $1 million for it now, you should not still be paying property taxes based on a $1 million value. If you are looking at the bottom line, as you should be, you have to look at every item of expense in your overhead, and this can certainly be a major one.

When your next tax assessment comes, consult with an adviser to determine if the amount you are paying could be


How can an adviser help lower the amount of property tax a business pays?

Once you’ve received the assessment — usually in February in Michigan — and want to determine if you may be paying too much, contact an attorney to begin the assessment process. The attorney will look at the assessment, look at what comparable properties are going for in the area where your business is located, and oftentimes consult with an appraiser to determine the value.

To assist the adviser in making an accurate assessment, the business owner should provide the notice of assessment; the previous year’s tax bills; any appraisal reports that they may have; the insurance value of the property, although that is not always indicative of the true value of the property; and, if it’s an income-producing property such as an office building, a shopping center or an apartment building, the financial statements from the previous three years.

From there, the adviser will undertake the appeal seeking to lower the appraised value of the property and file it with the appropriate state authority.

How can business owners identify the right lawyer for their needs?

Look at the years of experience and the adviser’s success rate. That person’s relationships with the taxing units in the state are also critical. If those working at the taxing units respect the adviser, they are going to sit down at the table and try to resolve the issues. If they don’t respect the adviser, or don’t have a previous relationship with him or her, it can significantly lower the chances of success.

How long does the process take?

It could be a very long process, as long as three years, because of the backlog the state is facing. During that time, the taxpayer will continue to pay at the assessed value. And if the value is found to be less than the assessment amount, the portion that was overpaid will be refunded when the case is over.

While the appeal is pending, the lawyer will amend the petition to make sure that subsequent tax years are involved. The attorney will also keep you informed of the progress of the appeal as it goes through the tax tribunal or court system, and of subsequent filings.

Then, once there is a hearing and judgment, or a settlement — and most cases are settled — the revised assessment becomes the taxable value. The taxable value is frozen at that number and can only be increased by what the Consumer Price Index is in Michigan, but not to exceed 5 percent.

Once an appeal is settled, can a taxpayer appeal again the following year?

Yes. If you settled at a lower number, and after that the market drops again, as it has in the past few years, your property may be worth less than the value determined when you filed the appeal. If you feel that is the case, it may be worth it to repeat the process.

How does the taxpayer pay the adviser?

The case can be paid on an hourly basis or on a contingent fee basis. A lot of clients prefer not to receive regular bills and would rather pay a percentage of the amount recovered. Some clients also believe that hiring someone on a contingency basis provides an added incentive for the adviser to get results.

Would you advise that every business hire someone to appeal its property taxes?

No. A business should only appeal if there is enough tax dollars at stake to make it worth the time and effort of both the business and the lawyer involved.

It’s really determined on a case-by-case basis. If the amount in dispute is minimal then it becomes a business decision that each owner has to make based on what he or she is comfortable with and whether it is worth it to engage the services of a lawyer.

Carl Rashid Jr. is leader of the Property Tax Appeals practice group at Dykema Gossett PLLC. Reach him at (313) 568-5422 or

Insights Legal Affairs is brought to you by Dykema Gossett PLLC

When business owners run into a potential legal issue, too often, they call an attorney, get an answer and move on. But developing a closer, long-term relationship with outside counsel can put a client in a stronger position when the need for services arises, says Michael P. Wippler, recently appointed managing member for Dykema Gossett LLP’s Los Angeles office.

“Too often, businesses and individuals view lawyers like the dentist — they wait until their tooth hurts before they seek advice,” says Wippler. “There’s a complacency. Nine times out of 10, you’re not going to have a problem, but there is that one time when getting early advice can prevent you from making a really big mistake.”

Smart Business spoke with Wippler about what to look for in outside counsel to ensure you receive high-quality service at a fair price.

How can you find the right attorney to meet your needs?

Referrals are the best way to find the right person for your needs. Who do you know and respect in business that has had success with an attorney they like?

Once you’ve identified potential counsel, start asking questions. First, make sure they have the experience and expertise to properly handle your matter. If someone is a jack-of-all-trades, you have to wonder about his or her expertise for your specific area.

Then, ask the lawyer about the level of service you can expect. How quickly do they respond to requests and phone calls? In the past, it was OK to respond within 24 hours. But today, if you call or e-mail your attorney, you should receive a response right away. You should never have to call twice.

Ask the lawyer how they will keep you informed of matters pertaining to your case or transaction. Too often, outside counsel will know about an important issue for weeks or months but not notify the client until the last minute.

As part of these conversations, determine if you personally like and trust the attorney. Is the attorney someone you can work with? The relationship between an attorney and client is fundamentally one of trust. Without trust, it’s very difficult to obtain what the client really needs from their attorney.

How can a client get a good price and create predictability in billing?

You should expect quality legal services at a fair price.

Ask what the rates are, what the billing procedures are and what you can expect to pay for a given matter. A client should never be surprised by the bill.

Ask what the attorney can do to give you certainty and some control over expenses. Today’s consumers of legal services can be more aggressive and ask for pricing models beyond the typical hourly rate. Asking for — and getting — pricing models such as flat fees, blended rates and volume discounts can provide increased predictability.

For matters such as a real estate lease or a patent application, an attorney may agree to a flat fee. If you have a mix of timekeepers from a senior partner to a paralegal working on a matter, you can request a blended rate in which you would be charged the same hourly rate for all people working on the matter. And with certain hybrid models, the attorney’s compensation varies depending on whether there is a successful outcome.

Other models include contingencies and partial contingencies. Clients can also request volume discounts and early payment discounts.

Should every business have outside counsel?

In today’s legal environment it is important to have a good lawyer that you can call on short notice. Anyone dealing with employees, contracts, financing and/or products will eventually have legal issues.

Before you have a problem, it’s a good idea to retain a lawyer you can trust. It is typically less expensive to pay for advice and guidance up front than for litigation or some other problem later on.

You may only need an attorney once in a while, but it’s good to know that attorney before you need him or her, and for the attorney to know you and your business.

Every business has issues that are particular and important to it.  If the attorney knows what is important to your business, it’s easier for the attorney to give you advice that benefits you. However, this type of knowledge about you and your business can only be learned over time by working together on different matters.

Always consider your potential exposure on the downside. Not everything goes as planned.

Michael P. Wippler is managing member for Dykema Gossett LLP’s Los Angeles office. Reach him at (213) 457-1717 or

Insights Legal Affairs is brought to you by Dykema Gossett LLP

Service providers are touting the benefits of cloud computing, and more and more businesses are moving to the cloud. But beyond the benefits, there are also dangers, and companies should consult with an attorney to ensure that the language in the contract will protect them, says Bill Cramer, senior counsel at Dykema Gossett PLLC.

“Service providers like to emphasize the potential financial benefits by saying that inside every cloud is a silver lining,” says Cramer. “However, inside some clouds, there is golf-ball-sized hail. When you give up your computing needs to a third party, you give up control and expose yourself to potential liability.”

Smart Business spoke with Cramer about contractual issues to resolve before moving to the cloud.

What legal issues do companies need to be concerned about when moving to the cloud?

You need to protect yourself in contracts with your service provider. With your own network, you control your security. But if you move your computing needs to a third party, you lose that control.

The contract should address how the hardware is protected from both outside and inside intruders. Does it require security guards or alarms? Does it limit access, require background checks, and have entry and exit logs? How does it protect data from electronic intruders? Does it have passwords to access systems? Does it encrypt data when it is stored and transferred to and from the Internet?

The contract should require segregation of  your data from other companies’ data, because you don’t want your data mingled with that of another company. And if you are subject to regulations such as HIPAA or PCI, make sure the provider is contractually obligated to meet those standards.

Further, how often does the provider update system software? If it doesn’t keep its software up to date, your information may be at risk. You should expect your information to be at least as secure off site as it is in your own building, and your contract needs to set out what the provider is doing to protect it.

How can a company address uptime requirements and remedies?

While with your own network, you don’t have control over unexpected failures, you do have control over how you respond. But once you move into the cloud, you lose that control. Specify in your contract how information is stored online: At a minimum, there should be some level of redundancy, and preferably some level of error correction such that failure of a hard drive doesn’t take your system offline.

Second, where is online information stored? Are there multiple copies at multiple locations, so if there is a catastrophic failure at one site, is there a secondary site where service will continue so you can maintain your business?

Third, if the cloud becomes inaccessible for a short period, is there any definition of ‘short period?’ A service provider may promise 99.9 percent accessibility, but over a year, that’s more than eight hours of unscheduled down time. Further, some providers don’t start counting such interruptions as down time unless the interruption lasts more than five minutes.

Fourth, does the provider make periodic backups of data and have an applicable transaction log so it can recover data if there is a software problem? Fifth,  the provider should have a cluster of computers with multiple redundancies so if one is taken down for maintenance, it doesn’t affect service.

Finally, your contract should specify what level of support you can expect when there are problems.

What should the contract cover regarding liabilities to third parties?

You may become liable as a result of a breach in security, resulting in notification requirements, which can be expensive. You may be accused of patent infringement because of the provider’s services. It’s important to spell out in the contract that the provider is on the hook to indemnify you for your costs, as well as to provide for your defense if you are sued.

How should the contract address remedies?

The contract is empty unless it ultimately provides a remedy. Typically, contracts have limits of remedies, for example, if service fails, you don’t have to pay for that service. But you need to put a dollar value on what it means to your business to be offline for a minute, an hour, or a day. The provider may offer credit for down time, however, that credit has to be enough to incentivize the provider not to fail. For example, an hour of unplanned availability should result in more than an hour of credit, so that the provider has an incentive to get it right.

What if the move to the cloud fails?

You need to have a graceful retreat. Even with a competent service provider, a good internal team and a solid migration path, it still may not work as you expected. Start slowly, preferably with a pilot project that won’t cause too many headaches if it fails.

The contract needs to have a migration path to retreat, to recover data and software from the provider and bring your information back to your facility. This can be difficult if you didn’t expect it. It may take weeks to retrieve your data and software from the cloud, and during that time, how do you conduct your regular business?

To ensure all your bases are covered, look to a law firm that has experience dealing with the specifications, technology and provisions of service that can examine the contract for missing but essential terms and terms that carve out big exceptions in the provider’s obligations.

Bill Cramer is senior counsel at Dykema Gossett PLLC. Reach him at (214) 462-6418 or

Insights Legal Affairs is brought to you by Dykema Gossett PLLC

With a rising number of federal regulations, it is becoming increasingly difficult for business owners to remain compliant and easier for them to inadvertently run afoul of the laws, says J. Richard Hicks, CEO of HR1 Services Inc.

“You can find yourself with a lot of governmental fines and legal problems if you don’t dot your I’s and cross your T’s,” he says.

Smart Business spoke with Hicks about issues that could land you in trouble and how to take steps to avoid them.

How can wage issues cause problems for employers?  

Just because you pay people an annual salary doesn’t mean they aren’t viewed as hourly by the Department of Labor. So if you designate your receptionist as salaried, that does not mean that is an exempt position. And, if that person works 43 hours in a week, and is found to later be employed in a non-exempt position, he or she is due overtime.

Not paying that might work while that person is still an employee, but it’s often when employees leave that employers get in trouble. If the employee goes to the DOL and the employer is found to be noncompliant, it can be liable for back pay, penalties and interest.

How can a 401(k) plan get an employer in trouble?  

If you delay depositing funds within a certain window, you are opening yourself up to problems when the audit team from the DOL knocks on your door. For example, if there was a big upswing in the markets on the days you were late and your employees’ accounts could have increased, you have to make up that entire amount, plus penalties. In addition, the fiduciary responsibilities of 401(k)s lie with the employer. To be in compliance, you have to review the funds at least once a year to ensure that you offer a stable and diversified fund portfolio. Hiring a third-party fiduciary also poses a danger, as that doesn’t remove the responsibility of the employer. If you hire someone else to be the fiduciary, and that firm doesn’t perform, you, as the employer, are still on the hook.

How can a drug policy land an employer in hot water?  

Employers who want a drug-free workplace may do random testing, but you have to take a regimented approach. You need a third party who is at arm’s length from the business to administer it. Where employers slip up is that they randomly select a person for testing one quarter, then the same person is randomly selected the next quarter. So they throw that person back in the hat to test someone else. But it has to be truly random.

Those issues can buy you problems with the government and with litigators.

What do employers need to be aware of regarding benefits?  

You need to be consistent with your benefits. For example, say your labor force has a high turnover rate and you want to classify some employees as labor and some as management, in order to offer a more benefit-rich program to management. You can do that, as long as you are consistent on how you define those classifications. But if you have a cousin who is classified as labor and you grant him benefits, this can raise discrimination issues, which can be very expensive.

What other laws does an employer need to be aware of?  

Employers have to understand the Americans with Disabilities Act, because it’s an area they can really trip over. Be aware of protected classes and how they can impact your company.

The Family Medical Leave Act can also present problems, as disgruntled employees can find ways to exploit it. For example, district court rulings have determined that the employer is responsible for monitoring employee absentee rates and notifying them in writing if they are FMLA-eligible. The employer has a fiduciary responsibility to make sure that employees are aware of their rights.

If someone is missing two days of work every two weeks, they may be dealing with an illness, and you have to make them aware of FMLA. If you fail to do so and then let them go because they are missing so much work, they can say, ‘I was sick all that time and had no idea I was eligible for FMLA, so here’s my lawsuit.’

What steps can employers take to protect themselves?  

Employee handbooks are truly the first defense mechanism. You need to craft an employee handbook and live by those published rules. And you can’t ignore someone doing something wrong just because they’ve been there for 15 years. You need to address it, because that’s where you get into trouble.

Be very consistent in the way you handle disciplinary actions. Lay out the rules in the handbook, then follow them to the letter.

Some companies may be able to use generic forms for big ticket items, for example, ‘We don’t discriminate, we follow wage and hour laws,’ etc. But most need to craft a custom handbook that meets the specific needs of their business.

The other mistake companies often make is that they publish the handbook and then think they’re OK and never review it. But if there are changes, perhaps because of a new law, for example, a handbook must be updated in order for the employers to remain in compliance. A company may try to write an employee handbook itself, but I highly recommend getting an outside expert to help you get it right. If you set up your first line of defenses incorrectly, when you face litigation, your entire defense starts to unravel before your eyes.

J. RICHARD HICKS is CEO of HR1 Services Inc. Reach him at (800) 677-5085 or

Insights Professional Employer Organization is brought to you by HR1

When David Rippy and his business partners Scott Winsett and Bill Jackson founded Bonfire Studios in 2008, they and their 30 employees focused on the emerging mobile and social gaming markets. Their initial games were created for the iPhone/iPad and Windows platforms, and the success of those games put the company on the map and got the attention of Zynga, the world’s largest social media game maker.

“If you’ve played FarmVille or CastleVille, for example, on Facebook, those are Zynga games,” says Rippy, Zynga Allen’s general manager. “Zynga also makes the popular Words with Friends and Draw Something games for phone. We immediately felt a connection with Zynga, and it acquired Bonfire in late 2010.

The company is now known as Zynga Allen, and since the acquisition, the the Allen, Texas, studio has grown to about 70 full-time employees and Zynga has grown to well over 3,000 employees spread all over the world.

Smart Business spoke with Rippey about the growth of the company and how the Allen location has helped it succeed.

How has Zynga positioned itself in the worldwide gaming market?

Zynga Inc. is the world’s leading provider of social game services, with more than 305 million monthly active users playing games that include FarmVille, Words With Friends, Matching With Friends, Scramble With Friends, The Ville, Bubble Safari, Ruby Blast, Draw Something, Zynga Slingo, CastleVille, CityVille, Hidden Chronicles, Zynga Poker, Zynga Bingo, Zynga Slots, Empires & Allies, The Pioneer Trail and Mafia Wars.

Zynga’s games are available on a number of global platforms, including Facebook,, Google+, Tencent, Apple iOS and Google Android. In addition, through, Zynga players have raised more than $10 million for world social causes. Zynga is headquartered in San Francisco and has offices throughout the U.S. and abroad in locations including Tokyo, Frankfurt, Dublin, Toronto and Bangalore.

How does Zynga’s business model operate?

Zynga’s business model is a big change from the traditional retail model that the industry has relied on for more than 30 years. In the traditional model, consumers had to drive to a store, spend up to $60 on a boxed game, install it and either play it at their desk or in front of the TV. Zynga’s games, on the other hand, are free to play and accessible whenever and however you wish to play them – on your PC, your phone or your tablet.

Most players enjoy Zynga games for free and the games have become an important part of their everyday lives, allowing them to connect with friends and family members all over the world. Zynga makes its money from players who pay for extra features or special items in its games.

Which Zynga operations are based in Allen?

Our Allen location is focused on creating new games for Zynga. CastleVille, our first game as Zynga, was launched in November of last year. It was a huge success and continues to be one of the top games on Facebook today.

As game developers, we have a team of really diverse talents. If you break down the studio, we’re made up of about equal parts software engineers, artists, and game designers. The designers come up with the ideas for the game, write the fiction and create the rules. The artists create the game worlds, the characters and the animations that bring it all to life. The engineers are the geniuses that make it all work on your phone or computer.

In addition to those disciplines, we have analysts who study how people play the games so that we can invest more time in what people enjoy the most. Finally, we have several producers who keep track of project scheduling and costs and basically keep the trains running on time.

How did the company settle on the Allen location, and what role did the Allen Econonic Development Corporation play in that decision?

Bonfire Studios was originally located just north of downtown Dallas. We began looking for new space at about the same time we were being acquired in 2010. We knew we wanted to be north of Interstate 635 because most of our employees are married with kids and live in the Allen, McKinney, Plano and Frisco parts of town.

We did an extensive search all over the Metroplex and considered many factors, including distance from our employees’ homes, quality of the schools and amenities that are attractive to our work force. In the end, Allen was really the ideal fit for Zynga, and our employees love working here.

We found a space that works perfectly for us, and it is located right by Watters Creek, one of the best mixed-use retail, restaurant and entertainment complexes in the Dallas area. Our out-of-town visitors also like our location because of its easy access to the Dallas/Fort Worth Airport via State Highway 121.

The Allen Economic Development Corporation was instrumental in our decision to move to Allen. From Day One, they made us feel like Allen was the right home for Zynga.  Their people were always available to answer questions, introduce us to local businesses and were a great partner in the transition. They continue to be a great partner today.

What would you say to other companies consider locating all or part of their operations in Allen?

I would absolutely recommend Allen, Texas, as a location for other businesses to consider. It offers just about everything a business could need, from high-speed Internet infrastructure to hotels, restaurants, great schools and easy access to the rest of the city.

David Rippy is general manager of Zynga Dallas. Reach him at Reach the Allen Economic Development Corporation at or call (972) 727-0250.

Insights Economic Development is brought to you by Allen Economic Development Corporation.

Wednesday, 05 September 2012 10:31

Wellness Credits, What are they - Really?

The Department of Health and Human Services (HHS) awarded $372 million to 44 various communities to help with the efforts of reducing obesity, smoking, increase physical activity and improve nutrition (, 3/19/10).  It is uncertain if this American Recovery and Reinvestment Act of 2009 has impacted the communities; and when the government grants were researched these amounts were earmarked for senior citizens.  Today another award was released for 2012.

Employer groups are hearing from various sources the importance of wellness.  Carriers are offering to assist with wellness efforts and many add as much as $44 in cost per year to the premiums. For larger employers Kaiser will send a bus to park outside workplaces testing employees for high cholesterol or strokes for a fee.  “High cholesterol is one of the major risk factors leading to heart disease, heart attack and stroke.  2,200 Americans die of cardiovascular disease each day” (American Heart Association,

Lifestyle changes are needed and yet Americans are sitting in front of computers all day urged to be more physically active.  The balance is falling on the employers’ shoulders who know if they have more than 50 employees they are now required to pay for medical insurance or be fined $2,000 per employee per year.  So the Human Resources Departments are asked to create wellness programs to keep premium costs down.  Pooled groups will have to have a community effort in order to accomplish this goal unless they are planning to grow into a larger employer who has control over their premium costs.

Yet, the buzz on the street is wellness.  On August 29, 2012, the Obama administration announced, “The Public Health Training Centers (PHTC) is to improve the Nation’s public health system by strengthening the technical, scientific, managerial, and leadership competence of the current future public health workforce” (  Approximately 36 U.S. Government Universities have been given a grant worth an average of $650,106 in financial assistance to promote public health training for the third year in a row.

So what does this mean for employers?  We are not sure yet.  “Employer wellness incentive programs take a variety of forms, ranging from employer-provided direct incentives, such as pedometers or discounted health club memberships (participation only programs) to group health plan incentives that link healthcare discounts to meeting certain health targets, such as cholesterol or blood pressure standards (standard-based programs). The codified support for employer wellness programs in the PPACA demonstrates Congress’s intent to encourage these programs and, thus, enhance and encourage public wellness. However, whether offered as part of a health plan program subject to HIPAA or the PPACA extension, or as a separate employer program or policy not subject to HIPAA or the PPACA, wellness programs are still generally bound by federal, state and local nondiscrimination and privacy laws, such as the Americans with Disabilities Act (“ADA”); Genetic Information Nondiscrimination Act of 2008 (“GINA”); Title VII of the Civil Rights Act of 1964, as amended (“Title VII”); and the Age Discrimination in Employment Act. Employers contemplating penalty or reward wellness programs should consider that few, if any, cases have addressed the application of these nondiscrimination laws to the wellness program penalty and reward provisions” (Hall, 2012,

The only reimbursements are from employers to employees who participate in the employer sponsored programs.  Today the employer is allowed to reimburse the employee a portion of their premium dollars by up to 20% of the cost of employee-only coverage and in 2014 that amount goes up to 30%; however this costs the employer more, while many are struggling to pay their portion of the premiums.

So what can an employer do?  Employers need to make sure their broker is providing some of these services to their employees in a compliant way on a volunteer basis.  And make sure their program is compliant or it can be deemed discriminatory in a court of law, “Despite PPACA’s clear legislative support for wellness efforts, employers fashioning penalty and reward wellness programs must consider nondiscrimination and privacy implications of such provisions” (Hall, 2012,

Unraveling the Patient Protection and Affordable Care Act (“PPACA”) is a full time job and the penalties and compliance landmines are plenty.  Overtaxed HR departments need brokers who are working 24/7 to guard the employees and employer from tax burdens and who offer employee wellness incentives, since the government is not.

Insights Business Insurance is brought to you by Montage Insurance Solutions.

As the economy slowly begins to improve, many companies are seeing their business doing the same. However, they may be reluctant to hire additional workers to handle the workload, fearing that it may drop off again and they will be stuck with employees they don’t need, says Danny Spitz, founder and president of Everstaff.

“The solution is temporary staffing,” says Spitz. “Businesses are more comfortable bringing on staff on a temporary basis until they make sure that the workload is going to continue. Although they are cautiously optimistic, they are skittish about hiring permanent workers. First, they want to see the skill sets and want to know that the work is going to last. So they continue to favor temporary staffing.”

Smart Business spoke with Spitz about how a recruiting and staffing firm can supply the right temporary workers to help you control your work force on an as-needed basis.

How can temporary staffing help a company control its work force?

It allows a company to staff for peak needs, with the flexibility of letting those people go when they no longer need them. When some companies have an increase in workflow, they are afraid to hire. So they ask their existing employees to do extra work and sometimes work overtime.

Partnering with a staffing agency to bring in temporary workers can help avoid burnout among your employees, improving their overall productivity and allowing them to continue to focus on their main job tasks. When companies are looking to cut costs, often the first place they look is payroll. And when a company downsizes, it will ask its staff to go into overdrive and handle responsibilities that they are not used to handling. Temporary staffing can help keep your current employees happy and allows you to bring in specialized talent for certain tasks, which, in the end, results in better service and better products for your clients or customers.

Temporary staffing can also help you control your work force because if the workload does continue, you have already trained that individual and you have the option of hiring him or her as a full-time employee. This arrangement allows you to try before you buy, evaluating whether they will fit in the corporate culture and with other employees, see what their work habits are and identify any weaknesses that might not be evident in the interview process before you hire them full time. It allows you to give someone the opportunity to work for your company but say that that person has to earn the right to be a full-time employee.

How can temporary staffing help cut costs?

Because the recruiting and staffing firm — not your company — is the physical employer of the temporary staffing people, you don’t have to worry about them filing for unemployment when they are no longer needed. This can reduce the overall operating costs for a business because it does not affect what the employer pays for unemployment insurance.

It can also keep costs in check because the business is not responsible for paying for benefits. In addition, the staffing firm handles all employer-employee responsibilities, such as workers’ compensation, and the employer doesn’t have to provide sick time and vacation time or contribute to a 401(k) plan.

Temporary workers can also cut costs by stepping in to handle overflow work instead of the company paying overtime to your existing workers.

How can a staffing firm help a company with the interview process?

With unemployment at an all-time high, the number of applicants for an open position is also at an all-time high. If you have one position and 300 people apply, where do you start? How much time and energy are you willing to put into that? An HR person could spend days going through hundreds of unqualified resumes just to identify a handful of appropriate applicants to prescreen for an interview.

A specialized staffing firm like Everstaff will take on that role and mirror the company’s procedures as an extension of the HR department and management team. The firm conducts a thorough screening and very specific skill testing to find a candidate with the right skill set, as well as a candidate who truly wants to work. The firm will mirror exactly how a company does its internal hiring. If it’s two interviews, a background check, drug testing and skill evaluation, the staffing firm will do the same things, so someone who comes in on a temporary basis and then is hired full time has been through the same process as everyone else.

What would you say to an executive who says his or her company doesn’t have a need for temporary workers?

If you don’t have a need now, that is the perfect time to meet with a staffing and recruiting firm. The last thing you want to do is to try to determine the right partner to meet your needs when your need for help is now. Take a proactive approach and take the time to develop a relationship with a staffing firm to identify potential needs.

That way, when someone resigns with little or no notice, or if something in your business changes, the staffing firm already has someone in the pipeline to step in when needed without affecting your productivity.

Danny Spitz is founder and president of Everstaff. Reach him at (216) 674-0788 or

Insights Recruiting & Staffing is brought to you by Everstaff

When Barry Andrews started Andrews Distributing Co. at the age of 29 in his hometown of Corpus Christi, Texas, in 1976, the company had seven employees and operated out of a 12,000-foot warehouse. That first year, the company sold 276,000 cases of beer, with Miller Brewing as its only supplier.

Fast forward through several acquisitions and an expansion of markets, and today the company serves 26 Texas counties with 1,100 employees and is the eighth-largest distributor in the country by volume -- distributing 26 million cases a year -- and the sixth-largest by revenue, says Joe Jernigan, chief financial officer of Andrews Distributing.

“We have great employees, great leadership and Barry is the hardest-working individual I’ve ever met,” says Jernigan. “He’s in the office early, he knows every employee by name and he spends time in the warehouse talking to the drivers, checking on the business. We have been very fortunate over the course of the last 16 years and 15 acquisitions to be able to precipitate a large volume growth – although a lot of it was organic, as well – at the right time and with the right people.

Smart Business spoke with Jernigan and with Andrews Distributing President Mike McGuire about how the business has grown and how its new warehouse in Allen, Texas, has aided that growth.

Why is the North Texas market a good place to do business?

We feel like North Texas, and the Dallas/Fort Worth complex are the best market in the country from a growth standpoint. It is projected that in 10 years, it will overtake Chicago as the third-largest metropolitan market in the country. We are well positioned to take advantage of that growth.

From a demographic perspective, the area is adding 160,000 people per year, or about a million every six years. As one of the top growth areas in the U.S., this is the right perfect place for us to be.

How did you settle on Allen, Texas, as the location for your new warehouse?

Our Allen location is a very robust satellite of our business. Before we opened the Allen location last year, we had nine warehouses in North Texas. The No. 1 thing that opening the Allen facility accomplished was that it drastically simplified our warehouse operations, allowing us to go from nine locations to three. That consolidation was 100 percent driven by the Allen facility and the location made it the perfect opportunity to consolidate a number of our northern, very small warehouses.

We had determined that we needed to be on the Highway 75 corridor. Our territory goes out to the Oklahoma line and 125 miles east of I-75. We started looking at a number of locations that were very interested in having us locate our satellite warehouse there. Then the gentleman assisting us in our land search introduced us to the people at the Allen Economic Development Corporation, as well as the mayor, and we established a great relationship with them.

As a result, we ended up making a deal with them and we couldn’t be happier; everything they’ve committed to they’ve followed through on, and we’ve followed through on everything we committed to. Allen is a great business community, a great community in general, and we couldn’t be more delighted with our decision. And as the population continues to spread further north, this is the perfect location for our warehouse.

The North Texas Counsel of Government has said that the junction of I-75 and I-380, three miles north of us, is going to be the epicenter of North Texas in about 15 years, which continues to validate our reason for being in Allen and which we expect will continue to contribute to our growth.

Today, we have well over 300 employees in Allen and expect to quickly grow that to 500 employees. By next year, half of our North Texas volume will be distributed out of that warehouse.

What is your ongoing relationship with the Allen Economic Development Corporation?

We continue to interact with them on an ongoing basis. Along with the land for the warehouse, we bought three tracts of land that were part of the package that we purchased from the city. People are continuing to make unsolicited offers to us on that land, we are working with the city, the mayor and the AEDC to make sure that when we sell, it is to the type of business that Allen wants as part of the community.

How is your new location working out?

We are really passionate about the company and we love the beer business. We love being a part of the community that we serve. North Texas is the best market for us to be in and when you look at what is going on in Allen, it’s an exciting time to be here.

Joe Jernigan is chief financial officer of Andrews Distributing Inc. and Mike McGuire is its president. Reach them at (214) 525-9400.

For more information about relocating to Allen, Texas, visit the Allen Economic Development Corporation at or call (972) 727-0250.

Insights Economic Development is brought to you by the Allen Economic Development Corporation.

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