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Cypen & Cypen
August 30, 2012

Stephen H. Cypen, Esq., Editor

1.    BENEFIT REDUCTIONS STILL TOP WORRY FOR AMERICAN WORKERS:     Forty percent of American workers are worried that their benefits will be reduced in the near future, more than say they are worried about being laid off, having their wages reduced or having their hours cut back.  The foregoing results are based on Gallup’s annual Work and Education Poll.  Americans’ worry about all items other than having their job moved overseas spiked in 2009 after the financial crisis, and has remained elevated since.  The relative rank-order of job worries has been fairly consistent over this time, with possible benefit cuts always generating the most worry.  Americans with less formal education are more likely than those with greater educational attainment to worry about losing their job or having their pay or benefits reduced.  Specifically, 34% of college nongraduates say they are worried about being laid off, compared with 18% of college graduates.  There is a slightly larger education gap in terms of worry about having hours cut back, 33% to 14%, and slightly smaller gaps on pay or benefit cuts.  The implication is that most American workers feel secure about their employment situation, even during one of the slower economic times in U.S. history -- perhaps helping to maintain consumer spending enough to prevent a second recession.  U.S. workers feel their benefits are most at risk, which may be the first place employers seek to cut back during difficult economic times.  And workers may be willing to accept such cuts over more severe measures like pay cuts or layoffs. 
2.      COUNTY WELLNESS PROGRAM NOT IN VIOLATION OF ADEA:    Seff filed a class action against Broward County, Florida, alleging that the County’s employee wellness program violated the Americans with Disabilities Act.  The district court granted Broward’s motion for summary judgment, finding the employee wellness program fell within ADA’s safe harbor provision for insurance plans (see C&C Newsletter for April 21, 2011, Item 6).  On appeal to the 11th U.S. Circuit, judgment was affirmed.  Broward offers its employees a group health insurance plan.  In 2009, employees enrolling in Broward’s group plan became eligible to participate in a new employee wellness program sponsored by Broward’s group health insurer.  Participation in the employee wellness program was not a condition for enrollment in Broward’s group health plan.  To increase participation in the employee wellness program, however, Broward imposed a $20 charge on each biweekly paycheck issued to employees who enrolled in the group health insurance plan but refused to participate in the employee wellness program.  The county later suspended the charges.  Seff, a former Broward employee who incurred the $20 charges on his paychecks, filed the class action, alleging that the employee wellness program violated ADA’s prohibition on non-voluntary medical examinations and disability-related inquiries.  On the parties’ cross-motions for summary judgment, the district court granted Broward’s motion, finding that the ADA’s safe harbor provision for insurance plans exempted the employee wellness program from any potentially relevant ADA prohibitions.  Because it found the employee wellness program fell within ADA’s safe harbor provisions, the district court declined to address whether the program imposed non-voluntary examinations or inquiries that would have otherwise been prohibited under ADA.  The appellate court found that the record established that the employee wellness program was part of the contract to provide Broward with a group health plan, was only available to group plan enrollees and the County presented the program as part of its group plan in at least two employee handouts.  In light of these facts, the district court did not err in finding as a matter of law that the employee wellness program was a “term” of Broward’s group health insurance plan, such that the employee wellness program fell within ADA’s safe harbor provision.  Seff v. Broward County, Florida, 23 Fla. L. Weekly Fed. C1432 (U.S. 11th Cir., August 20, 2012). 
3.      THE LOST DECADE OF THE MIDDLE CLASS:      Pew Research Center has released results of a survey entitled The Lost Decade of the Middle Class.  Since 2000, the middle class has shrunk in size, fallen backward in income and wealth and shed some -- but by no means all -- of its characteristic faith in the future.  Fully 85% of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living.  Of those who feel this way, 62% say a lot of the blame lies with Congress, while 54% say the same about banks and financial institutions, 47% about large corporations, 44% about the Bush administration, 39% about foreign competition and 34% about the Obama administration.  Just 8% blame the middle class itself. 
The last decade marks the first time since the end of World War II that mean family incomes declined for Americans in all income tiers. But the middle-income tier, defined as all adults whose annual household income is two-thirds to double the national median, the only one that also shrunk in size, a trend that has continued over the past four decades.  (The foregoing range is $39,418 to $118,255 in 2011 dollars.  Incomes are adjusted for household size, then scaled to reflect a 3-person household.)  In 2011, this middle-income tier included 51% of all adults; back in 1971, using the same income boundaries, it had included 61%.  The hollowing of the middle class has been accompanied by a dispersion of the population into the economic tiers both above and below.  The upper-income tier rose to 20% of adults in 2011, up from 14% in 1971; the lower-income tier rose to 29%, up from 25%.  However, over the same period, only the upper-income tier increased its share in the nation’s household income pie.  It now takes in 46%, up from 29% four decades ago.  The middle tier now takes in 45%, down from 62% four decades ago. The lower tier takes in 9%, down from 10% four decades ago.  For the middle-income group, the lost decade of the 2000s has been even worse for wealth loss than for income loss.  The median income of the middle-income tier fell 5%, but median wealth (assets minus debt) declined by 28%, to $93,150 from $129,582.  During this period, the median wealth of the upper-income tier was essentially unchanged -- it rose by 1%, to $574,788 from $569,905.  Meantime, the wealth of the lower-income tier plunged by 45%, albeit from a much smaller base, to $10,151 from $18,421.  The entire 138-page report can be viewed at
4.      NFL AND ITS INSURERS CLASH OVER DEFENSE OF CONCUSSION-SUIT:      A fight is brewing between the NFL and insurers over who will pay to defend the league against former players’ lawsuits over head injuries, with the league and carriers now squaring off in cases on each coast.  Some Travelers Companies Inc. subsidiaries filed a suit in New York, where Alterra America Insurance Co. had already filed.  Meanwhile, the league sued a list of insurers last week in Los Angeles.  The NFL’s suit, according to, aims to ensure an orderly and comprehensive determination of its insurance rights and its carriers’ obligations.  Lawsuits involving more than 2,400 retired players accuse the NFL of failing to act on medical evidence showing that repeated hits to the head can cause permanent brain injuries and other long-term health problems.  The NFL denies the allegations, and says it has made safety a priority.  Many of the former players’ suits have been consolidated before a federal judge in Philadelphia. 
5.      INDIANAPOLIS MAYOR OKAYS DOMESTIC PARTNER BENEFITS:       After wavering on the issue for weeks, Indianapolis Mayor Greg Ballard signed off on an ordinance providing domestic partner benefits for city and county workers, according to  The mayor overcame his discomfort with inclusion of employees’ unmarried opposite-sex partners, who, as Ballard had pointed out, already have the option of marrying.  His approval ushers in a policy change sought for years by some council members from both parties and by gay-rights advocates.  As a practical matter perhaps 30 or fewer of the 7,450 employees who are eligible for health insurance are expected to sign up their same- or opposite-sex partners, as well as partners’ children, in coming months.  The number is small mostly because of existing restrictions that will bar partners from participating if they already can have insurance through their jobs.  But gay-rights advocates see a symbolic milestone in Indianapolis joining the roster of about 200 municipalities nationally that already offer benefits.  Meanwhile, a larger battle looms next year when gay-rights supporters will fight against a constitutional amendment that would ban same-sex marriages and civil unions. They now are prohibited under state law, but the amendment would safeguard the ban in the Indiana Constitution. 
6.      SAN FRANCISCO RETIREMENT SYSTEM CAN TELL GRAND JURY TO POUND SAND:     A San Francisco jury can tell the city’s employee pension system to change its volatile and risky investment policies, but according an expert in the state judicial system, the fund does not have to listen (see C&C Newsletter for August 23, 2012, Item 6).  More specifically, San Francisco Employees’ Retirement System board members have to listen and respond to the superior court report, but are under no obligation to follow its advice.  The grand jury has no authority to enforce its recommendations, a long-time officer and former president of the California Grand Jurors’ Association told aiCIO.  The conclusions are strictly recommendations, but the power of persuasion can be significant and a large portion of jury recommendations are accepted.  SFERS is in process of reviewing the report and preparing its responses.  As we suspected, the California system is quite unusual:  only Nevada has anything slightly similar. 
7.      INDIVIDUAL RETIREMENT ACCOUNT BALANCES, CONTRIBUTIONS AND ROLLOVERS:      The following data come from the EBRI IRA database for 2010, the latest available year: 

  • In 2010, IRA owners were more likely to be male, especially those whose accounts originated from a rollover or were a SEP/SIMPLE. Among all IRA owners in the database, nearly one-half (45.8 percent) were ages 45–64.
  • The average and median IRA account balance in 2010 was $67,438 and $17,863, respectively, while the average and median IRA individual balance (all accounts from the same person combined) was $91,864 and $25,296.
  • Individuals with a traditional IRA originating from rollovers had the highest average and median balance of $123,426 and $38,138, respectively. Roth owners had the lowest average and median balance at $22,437 and $11,471. The average and median individual IRA balance increased with age through age 70.
  • The average amount contributed to an IRA in the database was $3,335 in 2010. The average contribution was highest for accounts owned by those ages 65–69, and more contributions were made to Roth accounts than to traditional accounts (both those originating from contributions and rollovers). However, the average contribution to a traditional account was higher, at $3,517, compared with $3,240 to a Roth account. Yet, a higher overall amount was contributed to Roths ($2.3 billion for Roths compared with $1.3 billion for traditional accounts).
  • Focusing on those owning traditional or Roth IRAs, 9.3 percent of the accounts received contributions, and 12.1 percent of the individuals owning these IRA types contributed to them in 2010. Among traditional IRA owners, 5.2 percent contributed, while 24.0 percent of those owning a Roth contributed to it during 2010.
  • Of those individuals contributing to an IRA, 43.5 percent contributed the maximum amount. Of those contributing to a traditional IRA, 48.7 percent maxed out their contribution, while 39.3 percent did so with a Roth.
  • The average and median account balances increased from $54,863 and $15,756, respectively, in 2008 to $67,438 and $17,863 in 2010. This represents an increase of 22.9 percent in the average account balance and 13.4 percent in the median balance. The total individual balances also increased for both the average (32.2 percent) and the median (26.2 percent).
  • The average and median rollover amounts were $69,012 and $17,614, respectively, compared with the average contribution of $3,335.

8.      GOLF WISDOMS:    No matter how far its shaft extends, a ball retriever is always a foot too short to reach the ball.           
9.      PUNOGRAPHICS:       What do you call a dinosaur with an extensive vocabulary?  A thesaurus.           
10.    QUOTE OF THE WEEK:   “Need what recently didn’t exist.”  Andrew Boyd 
11.    ON THIS DAY IN HISTORY:  In 1965, Casey Stengel announces his retirement after 55 years in baseball.           
12.    KEEP THOSE CARDS AND LETTERS COMING:  Several readers regularly supply us with suggestions or tips for newsletter items.  Please feel free to send us or point us to matters you think would be of interest to our readers.  Subject to editorial discretion, we may print them.  Rest assured that we will not publish any names as referring sources. 
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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.

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