Congress Fast-Tracks Dramatic Expansion of ADA
By Allen Smith / SHRM

The Americans with Disabilities Act (ADA) Restoration Act is “moving at warp speed” through Congress, Larry Lorber, an attorney with Proskauer Rose in Washington, D.C., said in a Dec. 10, 2007, interview.

The legislation (H.R. 3195 and S. 1881) would strike the concept of “substantial limitation of a major life activity” from the ADA’s definition of “disability” and extend the law’s coverage to anyone with a physical or mental impairment.

The ADA Restoration Act also would prohibit employers from considering the effect of mitigating measures, such as glasses or medication, when determining whether someone requesting accommodation has a disability, overturning the Supreme Court’s ruling on this issue in Sutton v. United Airlines Inc. (527 U.S. 471 (1991)).

The ADA Restoration Act has substantial bipartisan support, according to Lorber. The House version already has 241 co-sponsors, which is enough to pass that chamber. Lorber said that former President George H. W. Bush, who signed the original ADA into law, is in favor of amending it.

Shades of California Law
The ADA Restoration Act goes well beyond restoration and, if enacted, would make the ADA similar to California’s prohibition on disability discrimination, Lorber predicted.

He explained that under the California Fair Employment and Housing Act, it is “difficult if not impossible for employers to successfully deal with claims” of disability discrimination.

David Fram, director of ADA and EEO services with the National Employment Law Institute, said in an interview that the ADA Restoration Act would create an even more expansive definition of “disability” than the California law. The California law at least requires that impairments limit major life activities before there is coverage.

Camille Olson, an attorney with Seyfarth Shaw in Chicago, told SHRM Online that when she talks with anyone in HR about the ADA Restoration Act, “they can’t believe what is being contemplated and say that it’s unworkable.”

Courts Criticized
When the Senate held hearings on the proposed amendment on Nov. 15, 2007, Olson was the only person who testified about the significant problems the expansion would pose for employers. “The entire discussion was that ‘we meant for this to be inclusive,’ ” she recalled.

At the Senate hearing, Chai Feldblum, professor of law at the Georgetown University Law Center, said that “in recent years, the Supreme Court has restricted the reach of the ADA’s protections by narrowly construing the definition of ‘disability’ contrary to congressional intent. As a result, people with a wide range of impairments whom Congress intended to protect, including people with cancer, epilepsy, diabetes, hearing loss, multiple sclerosis, HIV infection, intellectual disabilities, post-traumatic stress disorder and many other impairments, are routinely found not to be ‘disabled’ and therefore not covered by the ADA.”

Feldblum said that the result has been that plaintiffs lose most ADA employment discrimination claims. “Many of us believe the ADA today is not doing the job it was intended to do. We believe the technical words of the ADA have been misused and misapplied by the courts to exclude people who deserve coverage under the law,” she stated.

‘Double Whammy’
Most disability rights groups support the legislation.

In her testimony before the House of Representatives on Oct. 4, 2007, Cheryl Sensenbrenner, chairman of the board for the American Association of People with Disabilities, said that “despite all the progress since the passage of the ADA, sadly, we still have a long way to go before the ADA’s inclusive vision becomes a reality in America. For instance, I am amazed at how routinely kind and well-educated individuals with whom I interact assume that I acquired my disability after marrying my husband, Congressman F. James Sensenbrenner, by remarking how good it was of him to ‘stick by me’ through that. The fact of the matter is Jim and I fell in love and got married during a time in which I was already disabled. You see he ‘got me’ in a wheelchair or at best on Canadian crutches.”

She went on to say that courts have set up a “double whammy” for ADA plaintiffs. “First they must prove their disabilities through a series of invasive and often highly irrelevant inquiries into the most intimate aspects of their lives. Once they have satisfied this increasingly difficult standard, only then are they given the opportunity to present the facts of discrimination.”

‘Americans Act’
Fram is surprised that so many disability rights advocates support the bill.

“By putting toothaches on the same level as breast cancer or diabetes, it winds up diminishing the importance of someone with a more serious condition,” he remarked. Fram thought the legislation would make life more difficult for employers when workers with toothaches, earaches and the flu request reasonable accommodations, but he thought the simplified definition of who is covered “arguably would make it easier for an employer.”

However, Olson is troubled by the seemingly limitless coverage advocated by proponents of the ADA Restoration Act, saying that the legislation would transform the law into the “Americans Act.” Olson asked, “who among us does not have an impairment? Who is perfect?”

And if everyone is covered, employers may face such daunting new realities as “unlimited sick leave,” she added.
Olson anticipates that Congress will hold more hearings on the legislation and recommended that employers “voice their concerns about why this isn’t workable.”

Allen Smith, J.D., is SHRM’s manager of workplace law content.

Flexible spending accounts (also called cafeteria plans) can be a great way for both employees and employers to decrease their taxable income. Flexible spending accounts allow employees to elect a certain amount of money for medical or day care expenses for the year to be pulled out of their check before taxes. This money can then be reimbursed to the employee as medical or day care expenses are incurred.

Flexible spending accounts are “use it or lose it” plans, meaning that if you elect $2,000 over the course of the year and only turn in receipts for reimbursement for $1,900, the $100 will no longer be available after the end of the year.

Both qualified medical expenses and day care expenses can be reimbursed through the flexible spending account. Here is a list of medical expenses that qualify for reimbursement under a flexible spending account. Sample Flexible Spending Expenses.pdf

These rules are similar to those for HSAs discussed in a previous blog.

All full-time employees (those working at least 30 hours a week) of A Plus Benefits are eligible to participate in our flexible spending account. Signing up for the flexible spending account must occur at the time of benefits enrollment or during open enrollment in December. Flexible spending elections do not roll over year to year so new elections must be turned in by December 31^st of each year.

If you would like more information about the A Plus Benefits flexible spending account, please contact the benefits department.

Samantha Bushard is an HR employee for the Idaho office of A Plus Benefits, Inc.

In this blog I would like to entertain a high-level discussion of valuing a business by employing the Discounted Cash Flow methodology. Creating a discounted cash flow model does require some basic understanding of the principle of “time value of money,” discount rate and some skill in Excel. The intention of this blog is not to teach these principles in detail, rather to serve merely as an “eye-opener” and encourage small business owners to think more critically about valuing their business.

Discounted Cash Flow analysis consists of two steps. The first is to determine future cash flows for the business or entity being valued. In determining future cash flows there are a few things that should be taken into consideration.

1. What is cash flow? The definition of cash flow, sometime called “free cash flow” can vary slightly depending on the desired approach. However, cash flow is typically defined as cash flow after removing all expenses necessary to run and grow a business over time. Mathematically cash flow can be calculated by taking cash flows after all operating expenses less taxes less necessary investments in working capital and property plant and equipment plus all non-cash expenses (i.e. depreciation).

2. How many years of cash flow should I use in my analysis? Typically the further out you forecast cash flows the less accurate they become. This is where your judgment and expertise in your industry will come into play. If you feel strongly that you understand the industry and that the industry is relatively stable, you may be able to project further into the future. Although somewhat arbitrary, most practitioners limit cash flow projections to 5 years.
As with all analysis, the old adage “Garbage in, Garbage out” holds true with Discounted Cash Flow analysis. The validity of your analysis depends on your ability to make solid cash flow projections. Doing so will require you to understand the drivers of your business as well as industry dynamics.

The second step in the Discounted Cash Flow methodology is to determine a discount rate. A discount rate represents the rate of return you require on an investment and it is the rate at which you will discount future cash flows. It is derived by understanding two things: what is my cost of capital and what is the appropriate risk premium for this organization. Both cost of capital and risk premium will be unique to each individual organization.

1. Cost of capital is a function of the sources of capital an organization chooses to use in order to finance its operations. For example if an organization funds all of its capital expenditures by taking out debt, the cost of capital would simply be the cost of interest paid on that debt. If however, an organization uses equity, the cost of capital on the equity would be the “opportunity cost” of investing the capital in another opportunity. Typically your cost of capital can be calculated by taking a weighted average of the cost of debt and equity financing.

2. Risk premium is much less lucid than cost of capital and will vary greatly with the perspective of the investor or entity valuing your business. For example you may assign a lower risk premium to your business because you understand the industry in which you compete and have existing expertise. However, for a potential acquirer lacking similar expertise, your business may pose more risk, thus requiring the use of a higher risk premium.

After determining cost of capital and risk premium, the sum of the two will comprise your discount rate. Per the principles of “time value of money,” the higher the discount rate used to discount cash flows, the less those cash flows will be worth. So a higher risk premium will lower the value of your business.

The intricacies and nuances of developing a sound Discounted Cash Flow analysis clearly can not be captured in one short blog. However, there are various resources including templates available online that will walk you through, in more detail, the steps of developing a solid analysis. Your effort to value your business before you sell it will empower you when it comes time to negotiate a selling price.

Richard Zollinger is a finance manager at American Express.

Expansion of FMLA Approved by Congress
By Bill Leonard - SHRM

The first expansion of the Family Medical Leave Act (FMLA) since 1993 cleared a final hurdle in Congress when the Senate voted 90-3 to approve the National Defense Authorization Act (H.R. 1585) on Dec. 14, 2007. The measure had passed the House of Representatives just two days before, also with overwhelming bipartisan support.

The legislation now moves onto White House, where officials have indicated that President Bush will sign the bill into law. A conference committee with members from both houses of Congress crafted the final version of H.R. 1585, which includes a provision granting FMLA-protected leave to workers who provide care to wounded U.S. soldiers and to family members of military reservists called to active duty.

The final version of the FMLA expansion is a combination of several different proposals, which have been under consideration in Congress for months. Most of the proposals surfaced after the President’s Commission on Care for America’s Returning Wounded Warriors issued a list of recommendations in March 2007.

Both houses of Congress approved a similar proposal to expand the FMLA into legislation that would have reauthorized the State Children’s Health Insurance Program. However, President Bush vetoed the bill and supporters of the FMLA expansion then moved to attach the provision to H.R. 1585.

The final measure requires that employers provide 12 weeks of FMLA leave to the immediate family members (spouses, children or parents) of reservists or members of the National Guard who are called to active duty in the U.S. military. Under the new law, employers also must offer up to 26 weeks of unpaid leave to employees who are providing care for family members wounded while serving in the U.S. military. Workers can take the leave in increments of the shortest time periods tracked by their employers’ payroll system.

It is unclear when President Bush would sign the measure into law, but sources familiar with the issue say the president will sign the bill soon—most likely before Christmas. The measure does not stipulate an effective date for the FMLA expansion, which has left many people wondering if the law will take effect on the day the president signs it.

Members of Congress who sponsored the leave expansion have said they are aware that employers will need time to prepare and comply with the new requirements. Several business-related groups, including the Society for Human Resource Management (SHRM), have asked the key sponsors of the measure to draft a statement clarifying their intent regarding an effective date. At the same time, officials with the Department of Labor have told Congress that they will need time to draft new regulations.

Sources familiar with the issue say that while the federal government won’t begin strict enforcement of the new leave requirements immediately, employers do need to review the changes with their attorneys or in-house counsels and be ready to comply with the new law as soon as possible.

“We are seeking further guidance on when and how the new leave provisions will take effect,” said Lisa Horn, manager for health care for SHRM. “Still, employers do need to be aware that the law is changing, and that they should begin preparing now to comply with these changes.”

Bill Leonard is a senior writer for SHRM Online.

Employees who are a part of the A Plus Benefits health plan often have questions about finding doctors that are in network. It is important to go to in network doctors in order to receive the best coverage from your medical or dental plan.

There are two different networks for the medical plan. You can find the name of your health network on the medical plan cards sent to you in the mail or by asking the benefits department at A Plus Benefits.

First Health (used in Idaho)
To find doctors on the First Health network go to www.firsthealth.com.
Click on Consumer of the left side of the screen.
Then click on Electronic Directory on the left side of the screen.
On the next screen under Provider Types, click on Physicians/Clinics.
Choose a specialty (such as family practice, dermatology, etc.) or select Any Specialty from the drop down list on the left side of the screen.
On right side of the screen enter your zip code and the amount of miles away from that zip code you would like to search.
Click on the Search button.
Information on doctors in the area should show up on the next screen. For more information about each doctor, click on their name.

Beech Street (used in Utah)
To find doctors on the Beech Street network go to www.beechstreet.com.
Click on Patients in the blue bar in the center of the screen.
On the right side of the screen in a small green box click Search for a doctor or hospital near you.
Enter in your city and state or zip code.
Scroll down and choose a specialty from the drop down list (such as family practice, dermatology, etc.) or select All.
Click on the Search button.
Information on doctors in the area should show up on the next screen. For more information about each doctor, click on their name.

The dental network is the same for all employees.

Dental Select
To find dentists on the Dental Select network go to www.dentalselect.com.
Click on Members in the right side of the screen.
On the right side of the screen in the Providers box click on the orange Go button.
Choose your state and your plan (Silver, Gold or Platinum) from the drop down lists.
Choose your city from the drop down list or enter your zip code.
Choose a specialty or select all from the specialty drop down list.
Enter other information if you wish and then click on the Search button.
Information on dentists in the area should show up on the next screen.

These electronic directories are updated as often as possible, but some changes may not be in the system immediately. Please remember to ask your doctor if they accept your network before making an appointment.

If you have questions about doctor networks please contact the benefits department at A Plus Benefits.

Samantha Bushard is an HR Employee for the Idaho office of A Plus Benefits, Inc.