The Tillmar Connection
April 2011 In This Issue:
Sign Up for The Tillmar Connection e-Mail Newsletter |
In the Middle of the Night
By Bill Folsom
Warning: this is not about a Billy Joel song ...
As the paramedics pulled me out of the ambulance and snapped the stretcher legs open, a strange thought struck me – I couldn’t recall the actual ride to the E.R. First time in my life I’d ever been inside an ambulance, and I missed the big show. Had I been I a “lights-and-siren” type of a case? Why was I so groggy?
All I could remember was the unrelenting, severe, jagged chest pain that jolted me out of a sound sleep, lancing down my arm, nailing me to the mattress, and scaring the hell out of me. Probably did more emotional damage to my wife.
And then the more punishing realization drifting in from left field: “Why had I joked about my Wellness Screening Report?”
The emergency room doors slid open and I rolled into “the rest of my life.”
It was 2 a.m., September 7.
Strapped into a sitting up position, and peering over the top of a fighter pilot’s type of an oxygen mask, I saw a dozen pair of eyes glance up, quickly appraising the urgency, and three of them waved the paramedics straight ahead.
Wheeled into a room marked “CRITICAL,” I was snatched onto a bed, and then quickly, professionally, stripped, cuffed, probed, tubed, and wired with dozens of leads to a bank of beeping monitors and machines. I had been reduced to a collection of moving graphs, squiggles and numbers.
And then the first of the vampires floated in, stabbing and drawing off tubes of blood.
Physicians and nurses drifted in, re-asking the same questions, studying the graphs, their mouths firmed into non-committal straight lines. X-Rays, sonograms, echo cardiograms were quickly done, interspersed with more vampires.
Finally this fellow strolled in and introduced himself as “my” cardiologist. “My gosh, he looks younger than my son,” I thought.
“Mr. Folsom, you’ve had a serious cardiac event.”
I grasped onto his words and thought, “Oh, thank God! He didn’t call it a heart attack! It’s just an event. I can handle events. I have events all the time. Events are just a notch above incidents, right?” My mind started to rationalize and minimize, even as I lay there.
But, he went on, “you had coronary blockages. Your body reacted automatically, with a heart attack. You have some serious issues, and tonight’s event is probably not life-threatening, but it will definitely be life-altering. We’re going to ship you upstairs to the Cardiac Floor.” He went on to explain what would happen in the next week, and left me in good hands.
Later that morning, stabilized, and laying in bed, I reflected on the previous week ....
Knowing that our group insurance rates were definitely going to jump come October, I saw the new Wellness Program as a sure-fire way to cut my higher premium increase. Just sign up for the program, and the company would pay a good portion of the increase, giving me a worthwhile discount. All I had to do was sign up, answer some questions, have a minimal plain vanilla physical, and I’d be ahead of the curve. It was a no-brainer.
Besides, I felt pretty good. Bit overweight, not as active as I used to be when I was a contractor, still smoking, but no illnesses, ailments or diseases my whole life. I told myself I had plenty of time to get in shape – when it was more convenient.
A week after the physical, my wellness results posted onto my secure web page. Scrolling through, I saw my numbers and the acceptable ranges. Saw that my cholesterols and blood components were pretty OK. Tummy was a little fluffy in the middle. And then came the smoking “thing.”
Smoking with these wellness folks was a Yes-or-No, black-and-white thing. No gray at all. Having any level of nicotine in my blood was enough to hang me. The summation was blunt: “You have an 18% chance of a stroke or heart attack in the next 10 years.” Whoa! That’s cold! My overall score plopped me into the highest risk level of overall wellness.
So, what did I do? Being the most intelligent person I’ve ever met, did I embrace this information and contact my doctor? Did I resolve to quit smoking, again? Did I reach out to the many resources available to me for assistance and guidance?
No, I continued to rationalize, minimize, and side-step reality. I even twisted numbers around and joked that, “my report” said I had a 1-in-5 chance of stroking out in the next hour, almost in a spit-in-your-eye manner. I even went so far as to share that my report was sort of liberating, in a quirky way. Deadlines, calendars, long-term goals were sort of redundant now. I mean, after all, my Wellness Report didn’t have earth-shattering news. I knew I smoked – wish I could quit. I knew I didn’t eat balanced meals – I was busy. I knew I was not at my “young-man” weight. But all of these things could be addressed, in time.
I continued to sail down that big river in Egypt.
One week later, exactly, BAM! Two a.m. Middle of the night. My body handed down its own verdict on my crime of procrastination, and I did have a life-altering moment.
What’s the moral of this little story? What’s the point?
Simple. Take your Wellness Report seriously. It’s not fiction.
If, like me, you tend to embrace denial (it’s not just a river in Egypt), then know that you could well have your own “middle of the night” event. If your report is not flattering, go and see your doctor. Doesn’t matter if your bad friend is diet, or weight, or smoking, or out-of-shape, or anything. Make the changes you know you should. The alternative is not a fun event.
AVI has invested a lot of time and money into improving everyone’s health. Many companies don’t, won’t or can’t. Take advantage of this opportunity that’s been handed to you.
And, by the way, for the record, for the umpteenth time … your Wellness Report …. your scores … the advice given to you … is totally confidential and secure. AVI doesn’t receive any information, and can’t access anything about you. Neither does the insurance company. It’s secure. As Al Gore said, “.… it’s in a lockbox.”
The only way any of your health or wellness information “gets out,” is if you share it with someone. Like I am.
And what’s my current status? After stress tests, MRIs, cardiac catheterization and two stents inserted, I’m much, much better. I’ve ended my long-time affair with Debbie, Betty and the Colonel, and with an Rx for a brand-new drug, Chantix, I’ve been off the smokes, surprisingly with no cravings or withdrawal issues.
I’ve even learned to accept doctors who look younger than my own children.
©William Folsom 2007 Care to comment or share? wfolsom@aviinc.com
Confirming Executive Compensation/Enhancing Reporting Compliance
and Organization Governance at Not-for Profit Organizations
By Scott M. Dettmann / Carlson Dettmann Consulting
Today, not-for-profit organizations operate with heightened awareness of executive compensation. The debate concerning remuneration paid to executives, whether employed by large multi-national organizations or the local hospital, has caused a dramatic shift in attitudes, resulting in heightened sensitivity of key stakeholders of these enterprises.
The past several years we have witnessed the continued interest of public officials in limiting the compensation of organization executives. Despite the shift of power complete this past year in Washington and Madison, it is likely these circumstances will continue. Organizations are well advised to actively test for excesses of executive compensation, as well as any corporate governance deficiencies.
Internal Revenue Code 4958 imposes intermediate sanction taxes on top officials of not-for-profit organizations who receive excess compensation from their respective organization and penalties for board members who approve such payments.
To avoid the consequences of taxes and penalties, the regulations provide a simple procedure for ensuring that all top officials are in full compliance and are not liable for additional taxes and penalties. The procedure is called creating a “rebuttable presumption of reasonableness.“ While this procedure is not required, it will prove to be quite advantageous to individuals and organizations covered by IRC 4958. The basic requirements for establishing the “rebuttable presumption” are as follows:
- The compensation arrangement must be approved in advance by an authorized body of the tax-exempt organization, the body of which is composed of individuals who do not have a conflict of interest concerning the transaction.
- Prior to making its determination, the authorized body obtained and relied upon appropriate data as to comparability.
- The authorized body adequately and in a timely manner documented the basis for its determination concurrently with that determination.
The needed documentation must include: 1) the terms of the transaction and the date of approval, 2) the members present during the debate and vote on the transaction, 3) the comparability data obtained and relied upon, 4) the actions of any members having a conflict of interest and, 5) documentation of the basis for the determination.
Multiple sources of comparability (executive compensation) data will be required in order to establish that executive compensation is not excessive. While IRC 4958 does not specify what data is to be used, the code does make reference to “industry surveys, documented compensation of persons holding similar positions in similar organizations, expert compensation studies or other comparable data.”
Care is necessary in making comparable compensation determinations, as definitions of “compensation” can vary from one survey source to another. Geographic locale, revenue size, as well as employee headcount of comparable organizations are frequent measures used to better define the scope/ applicability of comparability data. Use of outside compensation consultants can help in this process as they will typically have the advanced skill sets and data resources available to help make the competitive determinations necessary to support intermediate sanctions compliance activities.
It is our expectation that disclosure and levels of compensation paid to not-for-profit executives will continue to be scrutinized as time wears on. It is our hope the information provided by this article will assist with your competitive assessment of executive compensation and your Board level compliance efforts.
Scott M. Dettmann consults with employers throughout the US concerning matters of employee compensation, with particular emphasis on Executive Compensation matters. In addition to his consulting activities he is a part-time instructor at the Graduate School of Banking at the University of Wisconsin-Madison. He can be contacted at scott.dettmann@carlsondettmann.com, or 608-215-1237.
Are You Fiscally Fit?
It’s income tax time. Whether you have filed already or have yet to do so, the process might have you wondering about your financial health. It’s a good time to review your financial plan with your financial and tax advisors. The following checklist can serve as a guide such a check-up.
Investment Planning
- Investment Asset Allocation – When it comes to investment planning, review your investment asset allocation to determine if it is still appropriate given your goals and time horizon. Your financial advisor can help you prioritize what is most important for you and your investment portfolio
- Rebalance your portfolio – Even if your target asset allocation is still appropriate, you may need to review how the portfolio is actually structured. Over time, some asset classes outperform others, causing your portfolio to become out of balance and perhaps incur more – or even less – risk than you anticipated.
- Gain/Loss Assessment – Review your net short- and long-term gains or losses. There may be an opportunity to sell a losing stock and offset gains from other sales. If you sell a security for a loss, beware of rules that limit your ability to deduct the loss should you repurchase it either just before or after the sale.
- Margin Interest – Make sure you will have enough interest, and short-term gains to deduct any margin interest you may have paid during the year.
Income Taxes
- Tax Liability Projection – For income tax purposes, review your withholding and estimated payments to make sure you will not be subject to underpayment penalties. On the other hand, make sure you aren’t paying more than you need to now. The goal is to pay what you need to by year-end to avoid penalties, and pay the rest when you file your tax return.
- Deductible Expenses – Determine if it is better to pay deductible expenses, such as property taxes, charitable contributions or state estimated tax payments, before the end of the year or after. Consider bunching certain itemized deductions such as medical expenses and miscellaneous deductions in order to exceed the minimum adjusted gross income limitations.
- Non-Deductible Expenses – Think about restructuring non-deductible interest expense, such as auto loans or credit card debt, to deductible interest, such as a home equity loan. However, be aware of the AMT limitations on these types of deductions (see below)
- Alternative Minimum Tax (AMT) – Review your position with respect to the AMT to determine if exercising stock options or accelerating or deferring deductible expenses is appropriate. The AMT is an alternative tax system that may limit the benefit of certain deductions or cause otherwise tax-free income to become taxable.
Retirement Planning
- Retirement Account Contributions – Make sure you have made the maximum retirement plan contribution for which you are eligible. Also consider making a contribution to your traditional or Roth IRA prior to year-end. Consider converting your traditional IRA to a Roth IRA prior to year-end.
- Take any required distributions – If you are over age 70½, determine if you are required to take any distributions from your retirement accounts before the end of the year.
Other suggestions to help you achieve end-of-the-year fiscal fitness include:
- Gift Tax Exclusion – Take advantage of the annual $12,000 gift tax exclusion by making gifts to family members.
- Education Savings Programs– Establish a Coverdell Education Savings Account or a Section 529 Plan as a way to provide tax-free savings for education.
Since the end of the year is when many people begin to gather their financial documents, this also may be a good time to take care of other items that don’t necessarily relate to year-end:
- Make sure your estate documents are still current. These documents should be reviewed every 5 years or more frequently if there have been significant family changes or tax or estate law changes.
- Review any beneficiary designations on insurance policies, retirement plans, annuities, etc.
- Make a list of where all your pertinent financial documents can be found in the event you become incapacitated.
Article provided byRobert W. Baird & Co. for Dennis B. Engel, Certified Retirement Counselor, Senior Investment Consultant in the Waukesha office of Robert W. Baird & Co., member SIPC. He has 30 years of financial services industry experience, and can be reached at 262/523-5688 or 800/711-6127. Robert W. Baird & Co. does not provide tax or legal advice.
Invest in Prevention
(This opinion piece appeared in the Sunday, April 3, 2011 Milwaukee Journal Sentinel)
By Dick Tillmar
After more than 45 years in the health insurance industry, I've learned a few things about controlling health care costs. It's simple: Prevent chronic disease. Like the famous bank robber Willy Sutton supposedly said when asked why he robbed banks: "That's where the money is."
Nationally, eight of every 10 health care dollars are spent on chronic disease treatments. In Wisconsin, chronic disease causes two-thirds of all deaths and almost $1.2 billion in direct Medicaid costs every year.
From Wisconsin's County Health Rankings, released by the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation, it's clear that the conditions in which we live, work and play are important to how healthy we are. The promotion of healthier environments in our communities - including workplaces - will help prevent high blood pressure, diabetes, stroke, heart disease and cancer.
By funding programs in Wisconsin communities that increase opportunities for physical activity, access to healthy foods and smoking cessation, Wisconsin could reap a return of more than $6 for every $1 spent in the course of five years translating to a yearly potential savings of $338 million - a conservative estimate.
Employers can do a great deal to create conditions for healthy employees. One example is Milwaukee's Well City Initiative, in which local businesses collectively employing more than 50,000 people are offering support for tobacco cessation, physical activity, weight management, self-care and stress management.
Investing in prevention programs and policies in Wisconsin communities and work sites will help prevent chronic diseases, improve health and lower health care costs.
Read more about the real costs in a recent McKinsey Quarterly newsletter, from which the above chart is borrowed.
Read our February 2011 issue of Tillmar Connection
Read our December 2010 issue of Tillmar Connection
Read our November 2010 issue of Tillmar Connection
Read our October 2010 issue of Tillmar Connection
Read our Summer 2010 issue of Tillmar Connection
Before you leave TillmarConnect.com:
- Please send a link to www.tillmarconnect.com to three of your peers.
- Call Dick Tillmar to discuss an opportunity, 414-690-2232.
- Send your observations about the web site to Dick at tillmar@tillmarconnect.com.