1. Business Solutions Webinar
Topic: New Administration Laws
Meeting Facilitator:
Vince Megna - ADP Area Sales Executive
Wednesday, May 13th 2009 at 10:00AM [EST]
Audio Conferencing: (1) 800-924-3217
&
Thursday, May 14th 2009 at 2:00PM [EST]
Audio Conferencing: (1) 800-742-6164

2. Today’s Agenda
Legal Challenges for HR
- The First 100 Days – Eric Gordon Esq., Akerman Senterfitt
Impact of Cobra on Group Plans – Mike Barreto, USI
ADP Cobra Service – Schon Parris
Overview of ADP Workforce Management Solutions
- Kim Heald ADP Broker Channel Manager

3. "LEGAL CHALLENGES FOR HR –
THE FIRST 100 DAYS"
Presented By:
Eric A. Gordon, Esq.

4. The First 100 Days
• President Obama's agenda could have
tremendous impact on businesses.
• Only 9 days into office, made clear that
workplace issues were a top priority.
• Continued to address workplace issues in the
next 91 days, and as part of the stimulus
package signed into law on Feb. 17, 2009.

5. Ledbetter Fair Pay Act
• Applies to all claims of discrimination in
compensation under Title VII, the ADEA, the
ADA and the Rehab Act, that are pending on or
after May 28, 2007.
• Overturns Supreme Court decision.
• Resets SOL every time employee is paid money
based on a prior discriminatory decision.

6. Employee Free Choice Act
("EFCA")
• Currently, two ways a union may become the collective
bargaining representative:
• Voluntary recognition by employer; or
• Secret ballot election
• Once workplace is unionized, employer is required to
negotiate in good faith for a contract.

7. Unemployment Coverage
• Final bill includes a 9-month extension of a
program that offers an additional 7 weeks of
unemployment benefits.
• Increased benefits by $25 per week.
• Also includes a 7-week extension of jobless
benefits – which provides unemployed workers
up to 33 weeks of benefits.

8. E-Verify and the
New Employee Verification Act
• Final bill removed all provisions referring to E-Verify.
• NEVA: Introduced by Rep. Samuel Johnson (R-TX) in
February 2008.
• Currently – Revised Form I-9 in effect.

9. ADA Amendments Act
• Under the Amendments, coverage is to be
to the "maximum extent" possible.
• What this means for employers: when in
doubt, "assume" the employee qualifies as
disabled.
• Mitigating measures
– can now be considered when determining if
someone was disabled
– examples: prosthesis,
medication, corrective lenses

10. Family & Medical Leave Act
("FMLA")
• National Defense Authorization Act
– Military Caregiver Leave
• Leave for up to 26 workweeks
• Care for a member of the Armed Forces
• Medical treatment, recuperation, or therapy, or is otherwise in
outpatient status, for a serious injury or illness.
– Qualifying Exigency
• Leave for up to 12 workweeks
• Due to any "qualifying exigency"
• Active duty
• Contingency operation

11. Genetic Information Non-
Discrimination Act ("GINA")
• Prohibits employers from discriminating against
individuals on the basis of genetic information.
– Prohibits discharging, refusing to hire or other forms of
discrimination
• Mirrors Title VII's enforcement and remedy
provisions for intentional discrimination claims.
• Result for employers: Increased employment-
related claims.

12. The COBRA Subsidy
• What? U.S. Treasury provides a subsidy of 65%
of the cost of the COBRA premium.
• Who? Involuntary termination between Sept. 1,
2008 and Dec. 31, 2009.
• Exclusions? Phased out for individuals with AGI
between 125k and 145k (single) and 250k and
290k (joint).

13. THANK YOU!
Presented By:
Eric A. Gordon, Esq.

15. May 13th, 2009
Discussion Guide
• Employer Concerns
• Employee Concerns
• Vendors and Providers
• Claims and Underwriting Issues
• Top 10 Employer Strategies
• Closing Thoughts

16. May 13th, 2009
Employer Concerns
• Recession, improve top line • Claims costs associated with
revenue and sustain profitability COBRA participants, especially
self-insured employers
• Compliance with COBRA
subsidy • Impact of COBRA on renewals
• Administration of COBRA • Census changes
subsidy
• Carrier underwriting rules
• Significant bottom line impact
• Communicating the changes to
• Difficulty in collecting participants and beneficiaries
premiums

17. May 13th, 2009
A Few Points
• ARRA COBRA benefits include medical, dental, vision, Health
Reimbursement Accounts
• COBRA election rates range from 12% to 15%, before ARRA
(ADP Automation’s election rates in March 2009 are 13%)
• Election rates can increase to 20% or more, expect longer
COBRA durations
• ADP reports COBRA durations of 9 months for 18 month
elections and 18 months for 36 months elections
• COBRA claims can run at 145% to 150% of active employee
claims

18. May 13th, 2009
Disqualifiers
• The individual is eligible for other group coverage, participate
in the spouse’s plan or employer’s plan or Medicare
• Subsidy ends when the individual becomes eligible for
coverage or
• Fails to make a payment or
• After 9 months or
• The maximum COBRA period ends

19. May 13th, 2009
Employee Concerns…Lead to
• Stress from the financial sector, • Increased use of health services
401(k) losses, consumer price
increases, declining housing • Higher utilization for
values, layoffs discretionary treatments,
dental, vision, prescription
• Cost of COBRA and refills, preventive care, lab tests
affordability, fear of not finding
a job • Increased stress related claims,
depression, back pain, use of
• For those remaining, what will EAP
happen to the current benefits
expense, cost, plan design? • Higher disability & FMLA,
workers compensation claims
(protection from layoffs)

20. May 13th, 2009
Vendor and Provider Concerns
• Stock market performance and • Providers exposure to bad debt
lower interest rates have due to the uninsured is
impacted health insurers’ increasing
investment portfolios
• Provider rates for liability
• Health insurers will try to coverage are increasing
negotiate rate increases to cover
their losses in claims and • For the not for profits,
investments donations are down
• Federal cuts in Medicare • Renegotiate rates with insurers
funding • Asking for full payment at the
• Decline in group enrollment time of service
(less group premium) • Looking for new or complex =
• Higher utilization, higher dollar “expensive” treatments
claims and increased claim
severity

21. May 13th, 2009
Claims and Underwriting Issues
• COBRA elections are made by persons willing to pay the high
premiums because they or a covered family member have a
medical condition and need the coverage
• Adding more COBRA cases is likely to cause higher claim
totals, although there could be some benefit of healthier
people enrolling that can normalize some of the risk
• Review carrier eligibility rules regarding the percentage of
COBRA participants relative to the number of eligible active
participants, depending on the size of the group
• Impact on demographic mix can result in rate adjustment

22. May 13th, 2009
Top 10 Employer Strategies
1. Review current versus most recent renewal demographic mix
2. Track and monitor monthly or quarterly loss ratios and
claims for active and COBRA participants
3. Stay ahead of the carrier/renewal six months out
4. Utilize predictive modeling to design future programs
5. Review dependent eligibility files and verification
6. Apply wellness and incentives strategies and plan modeling
7. Review cash flows and funding arrangements
8. Use voluntary benefits to fill gaps in employee coverage
9. Impact of reductions on funding arrangement

23. May 13th, 2009
Change in Enrollment Example
At Renewal Post RIF
Enrolled 500 400 -20%
Expected Claims (monthly) $600 $300,000 $240,000
Minimum Attachment Point 90% of Renewal Enrollment $337,500 $337,500
Maximum Claims 125% $750 $375,000 $300,000
Maximum Annual Claims Liability (by formula) $4,500,000 $3,600,000
Minimum Attachment Point (by contract) $4,050,000
Additional Claims Corridor (employer liability) $450,000
Additional Aggregate Exposure 12.5%

24. May 13th, 2009
10. Individual Coverage
• Cost or ending of COBRA
• Active employees during waiting period or cannot afford contributions
• Is there potentially a lower cost alternative to COBRA?
• Best time to enroll is directly from employer plan
• Underwriting = higher rates, exclusions, limitations, or decline if COBRA
is elected or there is a gap in coverage
• Growing vendor and voluntary market = on-line, AARP, Univers, USI
INCompass™

25. May 13th, 2009
Closing Thoughts for Employers
• Outsource COBRA or review vendor relationships
• Ensure that participants are tracked (eligibility & oversight)
• Clear communications
• HR systems, finding the COBRA participants and collecting
premiums
• Review cost containment strategies
• Dedicated Health Advocate to partner with HR workload
• Clean up eligibility files

26. May 13th, 2009
Thank You
Mike Barreto, MBA
Employee Benefits Practice Leader
USI Southeast Region
786.454.2158
Mike.Barreto@usi.biz
www.usi.biz

27. ADP COBRA Services
ARRA Impact toClient Service Manager
Schon Parris – COBRA

28. ARRA Impact to COBRA
1. Second chance to elect COBRA for
involuntary terms from September 1, 2008.
2. 65% Subsidy for COBRA premiums for
involuntary terms from September 1, 2008
through December 31, 2009. American
3. Subsidy initially paid by employer but
Recovery, and
recaptured via tax credit towards payroll tax Reinvestment
submission. Act of 2009

29. ;;;
COBRA / ARRA Process
Qualified Event ADP sends ADP applies 65%
Client provides ADP processes
sent to ADP Election Packet ARRA
ARRA eligibility continuant election
w/new language subsidy if applicable
ADP mails
ADP collects ADP applies credits/
coverage coupon
premiums and issues refunds
for benefit
updates carriers where applicable
continuance
ADP forwards
ADP provides
premiums to client
detailed support
with detailed
for
support
tax credit filing
CLIENT ADP

30. More Information
ADP www.adp.com
Department of Labor www.dol.gov/cobra
American
Internal Revenue Service www.irs.gov
Recovery, and
Reinvestment
Act of 2009

31. About ADP: Who We Are
Workforce Management Company
40,000
Fortune 200 ADP associates
NYSE: ADP
1 of 4
More than
companies
570,000
AAA rated by
clients
Standard &
worldwide
Poor’s and
World Class Service Moody’s
Electronically move over Pay 1-in-6 U.S private sector
$1 trillion in client tax, workers and 32 million
direct deposit and related people in 50 countries
client funds in FY 2007

32. Workforce Management Solutions
“Managing the Business & Employee Lifecycles from Recruitment to Retirement”
Business Recruitment Time & Labor Payroll HR Benefits Outsourcing
on & Management Management Management Administration Services
Demand Hiring Tools
Accounting • Background • Bio-Metric Devices • Web-based or • HRIS Solutions • Benefits Call BPO
• AP, AR, Financials screening • Swipe Clocks Client Server • Unemployment Center Benefits Processing
• Shipping Drug Testing Payroll Solutions Claims Carrier Bill Outsourcing
• • Web Based •
• Inventory Payroll Banking Management Reconciliation ADP Resource
• Online Timesheets •
• Shipping Complete HR &
Applications • PC Timesheets • Tax Filing Services • Vacation tracking • Benefit Statements
• Web-Based Travel Payroll Outsourcing
& Expense Reports • Job Fit • Non-ADP Payroll • On-line Pay • Performance • COBRA
Assessment Interfaces Statements & W-2’s Evaluations FSA Plan ADP Total Source
eCommerce •
Professional
• Web Store
Testing • Scheduling & • Pay Cards • Training & Administration
Tax Credits Certification Employment
• Web Site • Absence • Check Fraud • Connection to
Processing Tracking Organization
• Customer Portal Management Protection Insurance Carriers
• Vendor Portal Recruitment HR Support 401(k) Administration
• • Phone, PDA & • Wage Garnishment • • Section 125
CRM Services Mobile Employee Administration Tax & Regulatory • Employee Benefits
• Work Comp Plan Design
• Sales Force Data Collection Compliance
• W2 processing Insurance Plan Administration
Automation POS Interfaces Employee &
• Marketing
• • General Ledger • • Benefits Open Supplemental
Interfaces Manager Enrollment Benefits
• Customer Support
Unlimited Custom Self-Service Benefits Statements
• Partner Portal •
• Order Management Report Writing • Company Portal Custom Integration
• New Hire reporting & Internet

33. State Tax Credits and
Incentives
• Tax credit savings vary by state and program
• Individual states may offer different incentive programs to encourage
business to:
• Locate or relocate
• Maintain or expand operations
• Increase or maintain workforce or train new and current employees
• Revitalize economically distressed areas
• Move people from public assistance into employment situations
• ADP Tax Credit Services can help clients determine what, if any, state tax
incentive programs are available and what is required from the client to
capture the credit.
• The Client will also need to review their state tax liability to determine
if they will be able to utilize a specific credit.

34. Tax Credits
• Federal, State and Local governments provide tax credits and
incentives to employers based upon location and employee
demographics.
• Work Opportunity Tax Credit (WOTC)
– Designed to encourage employers to hire individuals from 1
out of 9 different groups.
– Companies nationwide may claim a tax credit of up to
$2,400 per eligible new hire.
• Welfare to Work Tax Credit
– A tax credit against Federal income taxes for businesses
that hire long-term family assistance recipients.
– The potential credit amount is up to $9,000 per eligible new
hire.

35. Tax Credits Continued…
• Federal Empowerment Zone & Renewal Community
Employment Credit (EZ/RC)
• Tax credits that reduce the Federal income tax liability of
companies that hire individuals who live and work in
geographically designated urban and rural areas.
• New, existing, or relocated businesses that operate in an
EZ/RC may claim a tax credit of up to $3,000

36. Contact Info:
Eric Gordon, Esq. Akerman Senterfitt 561-671-3651 Eric.Gordon@akerman.com
Mike Barreto, MBA USI Insurance Services 786-454-2158 Mike.Barreto@usi.biz
Schon Parris ADP 770-619-7321 Schon_Parris@adp.com
Vince Megna ADP 954-717-6954 Vince_Megna@adp.com
Kim Heald ADP 561-625-5819 Kimberly_Heald@adp.com