Survey: Employee health benefit costs on the rise

   CHICAGO - (BUSINESS WIRE) - 4/28/2011 - The cost of claims in employer-sponsored health plans continues to increase, according to a recent trend survey by Wells Fargo Insurance Services. Although the rate is slightly lower than six months ago, the survey found overall claim cost will continue to increase in the low double-digits.
    “Our survey results show that employers continue to seek sophisticated ways to manage employee health risk, stretch their employee benefit dollars and minimize costs”
   With more than 60 insurance companies participating, the nationwide survey was conducted between February and March 2011. Reflecting claim activity over a six-month period, projected increases in the national average cost of claims include:
  • Health maintenance organizations (HMO) and point-of-sale plans (POS) - 9.6 percent increase
  • Preferred provider organizations (PPO) and consumer driven health plans (CDHP) - 10 percent increase
  • Exclusive provider organizations (EPO) – 10.6 percent increase
  • Indemnity plans – 11.1 percent increase
  • Prescription plans - 8.7 increase
   Dan Gowen, senior vice president of Wells Fargo Insurance Services, said the continued cost increase suggests employer premiums will rise at a similar rate, as insurance companies anticipate costs based on claim trends.
   “Our survey results show that employers continue to seek sophisticated ways to manage employee health risk, stretch their employee benefit dollars and minimize costs,” said Gowen. “That’s especially true as insurers expect higher claim costs as a result of market changes brought on by federal healthcare reform.”
   The survey found that, in addition to healthcare reform provisions, claim cost is influenced by increased use of healthcare services, aging U.S. population, improvements in medical technology and drug therapies, use of specialty drugs to treat complex diseases, changes in provider treatment patterns, and inflation. Finally, in comparison to the prior six months, the survey also showed dental and vision benefit products remain stable.
   Wells Fargo Insurance services has conducted this biannual survey since 2008. The company will open its next survey in late summer 2011.

Driving Under the Influence of Drugs? Watch Out

   By Diane S.W. Lee (Illinois Statehouse News) - 4/25/2011 - If you get behind the wheel with traces of illegal drugs in your body, you potentially could face a prison sentence. The Illinois Supreme Court on April 21  handed down the opinion in People v. Martin, reinstating Aaron Martin’s original conviction of aggravated driving under the influence and a six-year prison sentence.
    Peoria County Circuit Court prosecutors convicted Martin of a charge of aggravated DUI because he was driving with methamphetamine in his body when his car crashed into an oncoming car, killing two people on Christmas night 2004.
   The six other state justices unanimously concurred with Supreme Court Justice Mary Jane Theis’ 10-page opinion, which overturned the appellate court decision that ruled there was no “causal connection” to prove the drug had caused the crash, since the effects of the drug had likely worn off.
   “In this case, it was shown that defendant driver caused the accident. Thus, there was no need to prove that he suffered from any degree of impairment which caused the accidental fatalities,” according to the high court's opinion.
    Under the state‘s vehicle code, it is a crime for any person to drive under the influence of alcohol, intoxicating compounds or drugs, including marijuana and meth that would make them unable to drive safely. 
   If they are involved in an accident resulting in a death, then it would “aggravate” the sentence.
   Ronald Smith, professor at the John Marshall Law School in Chicago, said the law has harsh consequences for those who are unaware.
   “The legislature, for whatever reason, decided to go this far,” Smith said.
    The Supreme Court notes that causing physical injury to others by driving under the influence of drugs would turn a misdemeanor DUI into a felony.
    "Any misdemeanor DUI can become aggravated DUI if the violation causes a death," according to the high court's opinion.
    Martin drove home from a Peoria bar at night on Dec. 25, 2004, when he crossed the center of a two-lane state highway, and collided with a car, killing two people. He was hospitalized and given a narcotic painkiller.
    The Illinois State Police tested Martin's blood and urine samples. A forensic scientist found “trace amounts” of methamphetamine in his urine, but no alcohol.
    Martin denied using meth the night of the accident, even though he admitted to using it before. He insisted the state needed to prove whether key ingredients ephedrine or pseudoephedrine, which are used to make medicine and meth, were in his system instead of meth itself.
    "There was evidence, however, that he had used methamphetamine, and evidence that no other substances in his urine could have yielded a false positive result," according to the high court's opinion.
    People are taking a risk if they are under the influence of illegal drugs behind the wheel, Smith said.
    “It sends a message: If you do methamphetamine or some of these other drugs and you drive,” Smith said.   “Regardless, if it has any impact on the way you drive — you have committed a felony, and you can go to prison.”
    Story courtesy of Illinois Statehouse News (originally published April 21, 2011)

Adviser Pleads Guilty in $7 Million Ponzi Scheme

   MICHIGAN - 4/21/2011 - Dante DeMiro, 43, of Milford, pled guilty on April 19 to five counts of bank and wire fraud, United States Attorney Barbara McQuade has announced. Sentencing is scheduled for July 12 at 10 a.m. before the Honorable Lawrence P. Zatkoff in Port Huron, Mich.
   According to court documents, DeMiro was an investment adviser to various municipalities, credit unions, school districts, and trade unions through his Southfield-based companies MuniVest Financial Group and MuniVest Services LLC.
   From August 2007 to September 2010, DeMiro used the MuniVest entities to operate a bank and wire fraud Ponzi scheme. DeMiro falsely promised investor clients that he would invest their funds in various certificates of deposit. He did not invest their funds as promised, but instead, used their funds to purchase personal items and real property, to gamble, to make payments to other investors in the same scheme, and to make loans to several individuals and a local jewelry store.
   DeMiro stipulated that the loss caused by his fraud exceeds $7 million, and that he abused a position of trust in his fiduciary capacity as an investment adviser.
   “We have seen more and more of these investment schemes, which prey upon school districts, municipalities, and unions,” McQuade said. “Our hope is that cases like this one will deter other investment advisers from stealing from these vulnerable investors.”
    The case is being prosecuted by Assistant United States Attorney Erin Shaw. Joining in the announcement was Special Agent in Charge Andrew Arena, Federal Bureau of Investigation (FBI).
    “Today's swindlers artfully conceal their greed with sophisticated marketing and numerous misrepresentations. Investors and pension plan participants must remain diligent in following their money,” Arena stated.
   Source: U.S. Department of Justice release.

CDC Cites Widespread Food Contamination in U.S.

   NEW YORK - (BUSINESS WIRE) - 4/16/2011 - According to the U.S. Centers for Disease Control, up to 48 million cases of illness in the United States each year are caused by spoiled or contaminated food. Many of these come from fresh produce that is consumed in its raw state. Two ways to ameliorate this “epidemic” are to improve our control over the conditions in which food is kept as it moves from farm to consumer markets or to enhance the traceability of food shipments within the supply chain.
   New US legislation (The Food Safety Modernization Act) focuses on the establishment of industry-wide data standards for this information, and requires the FDA to develop and publish regulations that address the prevention of foodborne disease outbreaks.
    According to ABI Research principal analyst Bill Arnold, “RFID (Radio Frequency Identification) systems with temperature sensors can contribute to less tainted produce and provide the same standards-based tracing, while delivering information that could prevent as much as $35 billion/year in wasted produce.”
    Once the initial FDA trials–to be conducted in partnership with industry associations such as the United Fresh Produce Association for produce and the American Meat Institute for fresh meats–are completed, the question will be: which stakeholders in the industry will actually buy and use these systems?
    “That is a very big question,” Arnold said. “It is of most benefit to food retailers, but they don't control the harvest point or the shipper, so it's a matter of who decides they either have the clout or the ability to make it happen. Self-interest and liability limitation will be the motivators. In some cases large retail chains will buy RFID systems and require their suppliers to use them. In other cases, large food brands such as Dole, Hawaiian Tropic, Chiquita and others may invest to promote their food freshness and safety, allowing them to justify a premium price.”
    ABI Research’s new “RFID-enabled Food Safety and Traceability Systems” study (http://www.abiresearch.com/research/1006522) reviews the Food Safety Modernization Act’s impact on food-industry use of auto ID technology in both the short and intermediate terms. It provides forecasts for the use of RFID-enabled data logging devices from 2010 through 2015 in cold chain applications.
    The report is part of the RFID Research Service (http://www.abiresearch.com/products/service/RFID_Research_Service). ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies.

Is Illinois Next in Collective Bargaining Battle?

   By Andrew Thomason (Illinois Statehouse News) 4/10/2011 – Education reform in Illinois has gained serious momentum recently, but a day of meetings between all the major players on April 7 failed to produce a plan everyone could agree on.
   Changes to the firing and layoff processes and tenure have been ironed out, according to Illinois Sen. Kimberly Lightford, D-Maywood, who led the effort in the General Assembly. She said the sticking point now is collective bargaining, the ability for teachers' unions to negotiate items such as pay and benefits.
    “Collective bargaining by rights of union groups, that law hasn’t been touched since it was enacted (in 1983) and we’re really wanting them to do something that they haven’t had to do,” Lightford said. “You want to make sure that you work out as many details as possible and lead yourself into the tough areas that may take more focus and constructive dialog.”
    Plans floated in December would limit teachers’ ability to strike. Without the ability to strike at will, teachers would lose a lot of power at the negotiating table, unions say.
    For their part, the Illinois Education Association, the Illinois Federation of Teachers and the Chicago Teachers Union have been pushing their own reform plan that revolves around performance-based evaluations of teachers and principals, but doesn’t change collective bargaining.
    Illinois Education Association Executive Director Audrey Soglin told Illinois Statehouse News earlier this week that her organization didn’t plan to offer any compromises or changes to a collective bargaining system it views as working the way it was designed to.
    Charles McBarron, director of communications for the Illinois Education Association, said Friday that discussions are ongoing.
    “I think Sen. Lightford has run a fine process. We’re going to respect the process and I’m sure there will be more discussion of this next week,” he said.
    The other major player in changes to education in Illinois is Stand for Children, an education reform group that gained recognition last year in Illinois when it poured money into elections around the state. It has been a loud voice in calling for revamping the state’s education system, especially teacher tenure and the power of teacher unions.
    Much like the unions, Stand for Children was tightlipped about the ongoing talks.
    “Negotiations concerning legislation to improve the quality of public education in Illinois are ongoing. We look forward to a positive outcome," Jessica Handy, Stand for Children's Illinois policy director, said.
     What has been a fairly ad hoc approach to education reform has become finely honed in recent weeks. Lightford emphasized that while collective bargaining changes are what’s causing some delay right now, the big picture involves more than just teachers.
    “This is about the whole administration, the management team, the school board members and the effects leading to the child’s education,” she said.
    Lightford said she hopes to have some plan ready to go before the Senate the week of April 12.
    Story courtesy of Illinois Statehouse News. Originally published 4/8/2011.

Former CEO Pleads Guilty to $1.5 Billion Scheme

   WASHINGTON – 4/3/2011 - Paul Allen, the former chief executive officer at Taylor, Bean & Whitaker (TBW), pleaded guilty on April 1 to making false statements and conspiring to commit bank and wire fraud for his role in a $1.5 billion fraud scheme that contributed to the failure of TBW.
    Allen, 55, of Oakton, Va., pleaded guilty to a two-count criminal information before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Allen faces a maximum penalty of five years in prison for each count when he is sentenced on June 21.
   According to a statement of facts submitted with his plea agreement, Allen joined TBW in 2003 as its CEO and reported directly to its chairman. He admitted in court that from 2005 through August 2009, he and other co-conspirators engaged in a scheme to defraud financial institutions that had invested in a wholly-owned lending facility called Ocala Funding. Ocala Funding raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas , and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own.
   According to court records, shortly after Ocala Funding was established, Allen learned there were inadequate assets backing its commercial paper, a deficiency referred to internally at TBW as a “hole” in Ocala Funding. Allen admitted that in an effort to cover up the hole and to mislead investors, he told a co-conspirator to produce reports that concealed the hole. He also admitted that he knew that these misleading reports were sent to Ocala Funding investors and other third parties.  
   Allen also admitted in court that he kept the chairman of TBW informed of the collateral shortfall, and that in the fall of 2008, Allen was told that the hole had been moved from Ocala Funding to Colonial Bank. At the time that TBW ceased operations, the hole was approximately $1.5 billion. According to court documents, as a result of the Ocala Funding fraud scheme, Freddie Mac, Colonial Bank and Ocala Funding investors believed they had an undivided ownership interest in thousands of the same mortgage loans.
   Court records state that in March 2009, Allen was directed to approach a private equity investor to secure capital to meet a $300 million private capital requirement the U.S. Department of Treasury set for Colonial Bank to receive $553 million from the Troubled Assets Relief Program (TARP).  Although Allen failed to secure the funding from the investor, he admitted in court that the TBW chairman represented to others that the investor was a $50 million participant and that the chairman diverted $5 million from Ocala Funding to an escrow account in the investor’s name.  This deception caused Colonial Bank to falsely announce publicly it had met its $300 million capital raise contingency and to send a letter to the FDIC that all investors had met a 10 percent escrow deposit requirement. Colonial Bank never received any TARP funds.
   In court April 1, Allen also admitted to making false statements in a letter he sent to the U.S. Department of Housing and Urban Development, through Ginnie Mae, regarding TBW’s audited financial statements for the fiscal year ending on March 31, 2009.  In this letter, Allen omitted that the delay in submitting the financial data was attributed to concerns its independent auditor had raised about the financing relationship between TBW and Colonial Bank.  Instead, Allen falsely attributed the delay to a new acquisition and TBW’s switch to a compressed 11-month fiscal year.
   To date, five other individuals have pleaded guilty for their roles in this and related fraud schemes.  
   The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia.  It was investigated by SIGTARP, FBI’s Washington Field Office, FDIC-OIG, HUD-OIG, FHFA-OIG and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.   
   The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
   Source: U.S. Department of Justice (4/1/11)

The Arms Debate

Not All American's Have the Right to Bear Arms

Photo by Steve Rensberry (c) 2018