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Curtis Lumber grows into the largest independent lumber dealer in New York
BALLSTON SPA — In 1822, Capt. Isaac Curtiss built a sawmill near Ballston Spa. Little did he know that 191 years later it would become the largest independent lumber dealer in New York state. Robert K. Curtis, the fourth generation of eponymous owners, incorporated the business as the Curtis Lumber Co., Inc. in 1949. (His […]
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BALLSTON SPA — In 1822, Capt. Isaac Curtiss built a sawmill near Ballston Spa. Little did he know that 191 years later it would become the largest independent lumber dealer in New York state.
Robert K. Curtis, the fourth generation of eponymous owners, incorporated the business as the Curtis Lumber Co., Inc. in 1949. (His grandfather, Elmer A. Curtiss, dropped the second “s” because he thought it was a waste of time.) In 1952, when the company built a new office, it had only nine employees. In 1966, it opened a store in Schuylerville, which marked the beginning of the company expansion. “In 1971, when I joined Curtis Lumber as a part-time employee, we had four stores,” says Jon Hallgren, vice president for sales and operations. “By 1981 we had six, and in 1989 nine stores.” Hallgren became a full-time employee in 1977.
In 1992, Jay Scott Curtis bought the retail operation from his father and became the president of Curtis Lumber. “They split the assets,” says Hallgren. “Robert took the wholesale lumber business and the truss-fabrication shop [forming Saratoga Lumber Traders, Inc.]. The wholesale business also operated a reload facility for the transportation and storage of lumber and other building materials.” In 2003, Robert Curtis’s son, Todd, became president of Saratoga Lumber Traders.
Thirteen years after acquiring the retail business, Jay Curtis moved aggressively to expand the enterprise and its geographic footprint via acquisition of two chains. He closed the first deal on Jan. 1, 2005, with the purchase of Webb & Sons. “We had seven home centers in the chain,” says Lindsay LaRuffa, Curtis Lumber’s director of sales and operations for the central region.
LaRuffa started with Webb & Sons, stocking shelves in Norwich. “Our stores were located in Delhi, Greene, Hamilton, New Berlin, Norwich, Sherburne, and Waterville,” she says. At the time of the acquisition, which did not include a sister corporation called Lok-N-Logs, the annual sales of Webb & Sons totaled $30 million. Curtis subsequently sold the Greene store and continues to operate the remaining six.
On Oct.1, 2006, Curtis closed on his second deal, purchasing Gregory Supply, with stores in Plattsburgh and Ray Brook, and two located in Vermont at Williston and Burlington. At the time of the acquisition, Gregory Supply generated approximately $40 million in annual sales. Terms of both deals were not disclosed.
Company scope
Today, Curtis Lumber has grown into a company with 21 locations, 550 employees, and consolidated revenue of $162 million (year-end 2012). The company’s central region, which stretches between Utica and Binghamton, “… employs 80 and generates more than $20 million a year,” says LaRuffa. “The business [Curtis Lumber] has more than 1 million feet [of covered space],” adds Hallgren. “All of the real-estate is owned except for the Sherburne store, which is leased.
“We have more than 8,000 contractor accounts and inventory somewhere between 25,000 and 28,000 [discrete] items, ranging from cabinetry, decking, doors, fencing, and flooring to masonry, paints, plumbing, roofing, stairs, and windows. Curtis operates 154 forklifts, and there are 112 trucks in daily use, all owned by the company and maintained in three mechanic shops. We also have a variety of backup vehicles not included in the count,” notes Hallgren. LaRuffa adds that “the annual revenue ranges from $1.6 million in the smallest store to $48 million at headquarters in Ballston Spa.”
“The Curtis product line focuses on commercial-building supplies for the housing industry; remodelers, both professionals and do-it-yourselfers; and retail [buyers],” says Hallgren. “Our goal is to grow all of these areas. In the capital region, the ratio is 65 percent contractors and 35 percent retail. Up north, it runs closer to 80/20.” LaRuffa says “… the central region is about 60/40.” Hallgren notes that “… since the recession in 2007, we have focused more on pursuing larger projects or pieces of projects to compensate for the loss in our retail sales. We bid more on [state] government work and on RFPs (request for proposal) for items such as window, door, and siding packages.”
Curtis Lumber has plenty of competition. “On the commercial side, we compete with companies like Erie Materials, 84 Lumber, and Jay-K,” notes Hallgren. “On the retail side, we compete with the big-box stores like Lowes and Home Depot. We find that the contractors prefer independent stores like Curtis, because our employees have a lot of product knowledge. Curtis Lumber also has a competitive advantage because we belong to a national purchasing coop (Lumbermens Merchandising Corp. or LMC), which allows us to buy directly from the mills. Today LMC has 365 [stockholder] companies and an annual sales volume of $3.5 million to $4 billion. The coop often uses market timing to smooth out what can often be a volatile pricing [environment].”
Curtis Lumber is focused on growing its annual sales to $200 million. The 2013 sales projection calls for growth of 4 percent over 2012 sales.
“We need to focus on filling in our current [geographic] footprint, while developing our core business,” Hallgren notes. “We are always looking for new opportunities to continue our rural/suburban strategy, whether it’s building a new store or acquiring one. The profit margins in this business are slim, so we try to avoid the expensive code requirements of urban areas when picking sites.”
Curtis Lumber uses a variety of marketing techniques to develop sales, including social media. “We have a variety of social-media programs that are targeted at various groups,” says James Carpenter, the director of marketing for the company. “We are currently plotting a social-media program reaching out to professionals in the Burlington, Vt. market. In general, we employ a media mix coupled with relationship building and educational opportunities targeted at professionals.” Hallgren adds that “Curtis still distributes hundreds of thousands of printed flyers, runs ‘infomercials’ on local TV, and tracks the activity on the company website.”
The executive team at Curtis Lumber includes Curtis, CEO; Hallgren, vice president of sales and operations; Sandy Zelka, CFO; Elizabeth Irish, human-resources manager and business administrator; and five regional directors.
“The company spends a lot of time on training,” says LaRuffa, “and it’s not just on product knowledge. We train our staff, especially during the winter months, on professional sales, leadership development, customer service, and spend a lot of time on safety.” Hallgren points to “… the SHARP (Safety and Health Achievement Recognition Program) program sponsored by OSHA. This program recognizes small-business employers who operate [an exemplary] injury and illness prevention program. OSHA exempts us from regular worksite inspections [during the period our certification is valid]. We also participate in VPP (Voluntary Protection Programs) with the state labor department and OSHA to control and prevent worksite accidents.”
LaRuffa says that “… all our employees are involved with safety, and we also work to educate even our customers and sub-contractors through a course we call ‘contractor for safety program.’ Any sub-contractor we recommend has to comply with our safety standards … Safety doesn’t stop just in our stores or on worksites; we think it also [extends] to the home.”
Jay Curtis is now joined in the business by his son Christopher, who currently works in the corporate office on safety and cost control. He also works with his daughter, Kylie, a recent graduate of SUNY Cortland. She is the head cashier at the Ballston Spa location. Curtis, 54, and his wife Kendra, live in Galway. Few corporations can claim six generations of family ownership. Curtis Lumber, already the largest independent lumber dealer in New York State, is poised for still more growth.
Contact Poltenson at npoltenson@cnybj.com
Web-based Simple Admit aims to streamline pre-admission process
BALDWINSVILLE — Daniel Coholan recalls it was a simple conversation that led to what is now Simple Admit, LLC, a company he co-owns in Baldwinsville. For much of his career, 26 years, Coholan had been the sole owner of De-Tec, Inc., a distributor of medical equipment. The idea for Simple Admit resulted from a quick
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BALDWINSVILLE — Daniel Coholan recalls it was a simple conversation that led to what is now Simple Admit, LLC, a company he co-owns in Baldwinsville.
For much of his career, 26 years, Coholan had been the sole owner of De-Tec, Inc., a distributor of medical equipment.
The idea for Simple Admit resulted from a quick conversation between Coholan and one of his previous customers, who indicated one of the biggest problem she was having as a surgery-center director “was getting patients in the door,” according to Coholan.
Coholan then began to wonder how his company could make sense of that problem or what it could do to solve it.
“And when we found out the amount of time being spent on that [gathering patient information], we thought that was a real good avenue to pursue to see if we could come up with some sort of fix,” he says.
Simple Admit, LLC, which does business as Simple Admit Management, is a web-based admission system that Coholan started in 2009.
The firm operates in a 4,000-square-foot space at 45 Oswego St. in Baldwinsville in a building that Coholan owns, he says.
De-Tec, Inc. had operated in the same space that Simple Admit now occupies.
Coholan is the majority owner of Simple Admit and business partner, Michael Horning, who had worked in sales for De-Tec, Inc., is a minority owner, according to Coholan.
How it works
When a health-care provider, such as a surgery center or physical therapist, is ready to schedule a patient for a medical procedure, that office will direct the patient to log on to Simple Admit’s website.
The patient will then enter his or her preoperative-health history, providing answers to questions that would have taken a nurse several phone calls and several minutes to gather.
“We’ve now alleviated that part of the process,” Coholan says.
At the patient’s convenience, he says, that person can submit their information online, including medical history and any medications the patient is taking at the time.
“Usually a patient will do that [part] weeks ahead of their scheduled procedure, which gives the facility the ability to contact that patient if any changes need to be made,” Coholan says.
When patients prepare for a physical-therapy procedure, for example, they spend half of their first office visit filling out paperwork before the therapy even begins, he says.
An average surgery center schedules about 500 procedures per month, according to Coholan, who contends Simple Admit saves those centers about 20 minutes per patient.
“You can let your nurses be nurses, not have them chasing patient information,” he says.
As of July 11, 120 facilities in 32 states, including surgery centers, physical therapists, and hospitals, are using the Simple Admit technology, and a few million patients have used the system, Coholan says.
In Central New York, Upstate Orthopedics, LLP and Syracuse Orthopedic Specialists, both located in DeWitt, are among the company’s clients, he says.
Simple Admit clients pay a monthly subscription fee for the web-based service.
“It depends on the size of the facility [and] number of patients; there’s a lot of variables in there,” he adds.
Coholan says the fee ranges from $500 per month to higher figures depending on the services a client is buying, which could include an automated-call service for contacting patients, along with patient follow-up, patient-satisfaction surveys, and patient-educational videos that the firm can stream to clients.
Simple Admit is working to boost its sales and marketing staff, but is spreading the word about its product in other ways.
“Most of our business comes from just contacts through trade shows,” Coholan says.
He’s also generated business from contacts he’d made in his earlier days as the owner of De-Tec, Inc., Coholan says.
“We’re too thin as far as staff is concerned to accomplish a lot of things we’d like to, but we’re getting there,” he says.
Hiring plans
Simple Admit employs nine full-time people, including four people who serve in a programming role for the software. Coholan wants to add eight additional full-time employees before the end of 2013.
The company would like to hire three new employees for programming duties, three employees to serve in sales and marketing roles, one to oversee bookkeeping, and another to focus on customer-service duties, he says.
“I expect that we’ll … add about that many people again in the first half of next year,” Coholan says.
CenterState CEO on May 31 announced an award of $150,000 for Simple Admit in the Grants for Growth program. The company will use the grant funding to hire the new employees, Coholan says.
In developing the Simple Admit product, Coholan initially sought help from First Consulting, Inc. of Rochester, a firm operated by Art Roberts, a classmate of Coholan when they attended Westhill High School.
He asked Roberts if his firm could build software that would help health-care facilities become more efficient at getting patients in the door.
A year-and-a half later, Coholan says the thought process evolved from a software package to “a web-based application, a secured, HIPAA-regulated, web-based application that could be continually dynamic, continue to be built, continue to be reviewed as to what the next level of things we wanted to add to it,” he says.
Simple Admit decided to have its own employees continue the work in early 2012, Coholan says.
HIPAA is short for the 1996 Health Insurance Portability and Accountability Act, part of which protects the privacy of information contained in an electronic personal-health record, according to the U.S. Department of Health and Human Services.
Coholan declined to disclose the amount of revenue that Simple Admit generated in 2012 and the amount projected for 2013.
The market that Simple Admit serves has “significant opportunity” because less than 10 percent of the facilities in the market are “doing anything electronically,” he says.
Out of the 6,000 accredited surgery centers nationwide, only about 500 or 600 are using electronic technology. Simple Admit could have contracts with up to 1,000 clients in the next few years, depending on its level of technology, Coholan says.
Contact Reinhardt at ereinhardt@cnybj.com
BlueRock Energy providing electricity for the Buffalo Bills
SYRACUSE — BlueRock Energy, Inc. of Syracuse on July 1 announced an agreement with the Buffalo Bills of the National Football League to become the team’s “official” electricity provider. The deal, which took effect a month earlier, is a “multi-year contract,” says Philip Van Horne, president and CEO of BlueRock Energy. He declined to provide
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SYRACUSE — BlueRock Energy, Inc. of Syracuse on July 1 announced an agreement with the Buffalo Bills of the National Football League to become the team’s “official” electricity provider.
The deal, which took effect a month earlier, is a “multi-year contract,” says Philip Van Horne, president and CEO of BlueRock Energy.
He declined to provide any additional terms of the agreement, but said it’s “significant” for both the team and his company.
BlueRock Energy is headquartered in a 6,700-square-foot space between two floors in The Foundry at 432 N. Franklin St. in Syracuse.
The Bills use plenty of electricity on items that include stadium lights, parking-lot lights, refrigeration, its offices, and practice fieldhouse in Orchard Park, south of Buffalo, Van Horne says.
“Their electricity expenses are a significant item, and the sponsorship items are a significant number for us,” he says.
The Bills made the initial contact with BlueRock about the possibility of becoming the team’s electricity supplier.
“They put some feelers out to people in the energy industry asking who a good partner would be and several others in our industry recommended Blue Rock to them,” Van Horne says. “[It] makes me feel very good.”
The discussions began last October.
The partnership also includes a number of marketing and sponsorship opportunities, Van Horne says.
“We wanted to make sure that we had the right package, both for what they needed and for what we wanted,” Van Horne says.
BlueRock Energy is sponsoring the Bills’ training camp in Pittsford, which involves company banners and a kiosk for distributing marketing materials.
BlueRock is also the “Game Week” sponsor the Bills’ season opener at Ralph Wilson Stadium against the vaunted New England Patriots on Sept. 8.
It is also the first regular-season game for new Bills head coach Doug Marrone, the former head football coach at Syracuse University for four seasons.
“The tickets for that opening day have Coach Marrone’s picture on them next to the BlueRock logo,” Van Horne says.
Inside Ralph Wilson Stadium, BlueRock Energy will have a presence on the facility’s ribbon board that circles the stadium’s interior. When the opponent is facing a third-down situation, a fan-energy meter, called the BlueRock Energy Fan Energy Meter will encourage Bills fans to generate noise, he says.
Following each game, Bills fans will have the chance to vote on Facebook for the “BlueRock Energy Player of the Game.” The team will announce who earns the distinction on its Facebook and Twitter pages on a weekly basis, according to Van Horne.
The company’s agreement with the Bills will provide plenty of exposure for the BlueRock Energy brand, Van Horne says.
“This is obviously the largest marketing activity of any of the other things we’ve done,” he adds.
About BlueRock
BlueRock Energy, which supplies both electricity and natural gas to residential and commercial customers, uses a “consultive” approach when dealing with potential energy customers, Van Horne says.
The firm meets with the customer and determines the client’s energy needs, goals, and budget, and then crafts a custom package to provide the electricity or natural gas.
All providers in New York purchase their electricity through the Albany–based Independent System Operator (NY ISO), which oversees the state’s power grid and is the market clearinghouse for all the electricity that providers buy and sell in the state, Van Horne says.
BlueRock is among about 50 electric-supply companies that are approved to conduct business in New York, Van Horne says.
National Grid serves as the delivery company, he adds.
“They own the wires, they own the gas pipes, and so, for all the supply companies, all the energy retailers, we all supply to the customer through National Grid,” he says.
If a customer, residential, commercial, industrial, institutional, doesn’t choose a supplier, the default is back to National Grid, he adds.
BlueRock competes with companies that include Hess Energy, Van Horne says. Hess Energy, part of the New York City–based Hess Corp. (NYSE: HES), operates an office in Syracuse.
Blue Rock employs 38 people, and all but two serve on a full-time basis, Van Horne says. Blue Rock also works with three contract employees.
Van Horne would like to hire between two and five new full-time employees before the end of the year, he says.
Blue Rock Energy leases its work space from 432 North Franklin Street Properties, LLC.
Van Horne declined to disclose the firm’s revenue figure for the latest fiscal year, which ended on June 30, but he says growth has been “very strong” each year of operation since the company’s start in 2003.
He is projecting 30 percent revenue growth for the new fiscal year that just started.
Van Horne is among 21 total shareholders who own BlueRock Energy. He holds the largest amount of shares but declined to disclose his ownership percentage.
BlueRock Energy serves about 14,000 customers in New York, with the exception of Long Island, he says.
Contact Reinhardt at ereinhardt@cnybj.com
MAMI, OCC partner to offer medical-interpreter training program
SYRACUSE — Understanding a diagnosis or the doctor’s instructions on how to treat an illness are crucial to receiving good health care, but are often a challenge for those who don’t speak or are not yet fluent in English. And while health-care providers are required to offer translation services, there is a shortage of well-trained
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SYRACUSE — Understanding a diagnosis or the doctor’s instructions on how to treat an illness are crucial to receiving good health care, but are often a challenge for those who don’t speak or are not yet fluent in English. And while health-care providers are required to offer translation services, there is a shortage of well-trained interpreters to do the job.
That’s why Multicultural Association of Medical Interpreters (MAMI), based in Utica, has partnered with Onondaga Community College (OCC) to offer a new medical-interpreter training program to be held weekends starting Sept. 14. Tuition for the 135-hour course is $1,260, with tuition-assistance funding available for eligible candidates through CNY Works.
MAMI has locations in Utica, Syracuse, and Albany, and Executive Director Cornelia Brown estimates there are about 30,000 refugees from other countries in each of those areas. “We estimate that at least half of those people are limited-English proficient,” she says.
That constraint leads to a host of complications from the patients not being able to tell the doctor exactly what is wrong with them to not understanding the doctor’s treatment plan for their ailment, Brown says. “They may not understand the seriousness of the problem,” she adds.
On top of that, cultural differences often create barriers. Refugees may feel more comfortable using treatments popular in their home country without understanding that those treatments may be risky, she says. Or they may feel it’s impolite to say that they don’t understand something the doctor is saying.
That’s where a well-trained interpreter really comes into play, Brown notes. Not only do these interpreters translate language between the two parties, but they are also trained in the cultural aspects of different countries so that they may also interpret body language, facial expressions, and other non-verbal cues to help ensure the patients truly understand what’s happening in the examination room.
That understanding is not only important for the patient, but also for the health-care provider, who could be held liable if the interpreting services are sub-standard, Brown says. Simply finding someone who speaks the needed language is not enough, she says. They need to understand all the legalities that surround medical interpreting.
Course
The new 135-hour course at OCC will provide that training through a multi-phase approach that not only covers topics such as language and communication dynamics, ethical principles, overview of the health-care system, laws and regulations, medical terminology, and skills for mediating cultural differences, but also provides opportunities for students to practice what they are learning. The program also teaches students how to self-monitor to ensure they are providing accurate interpreting services, Brown says.
Students in the program must be fluent in at least two languages and pass language-skills screening. The $75 cost of the screening will be deducted from tuition once a student registers for the class. Some of the languages that MAMI sees the most need for include Albanian, Arabic, Hindi, Japanese, Punjabi, Sapo, Somali, and Spanish.
The program needs a minimum of 17 students and can take a maximum of 25, Brown says, adding that she doesn’t think there will be a problem filling the class due to the high need for well-trained interpreters.
To help spread the word about the class, MAMI is reaching out to community centers and other organizations that serve refugees to make people aware of the program. About 95 percent of MAMI’s approximately 150 independent interpreters are former refugees who have become fluent enough in English to offer interpreting services to the roughly 100,000 people that MAMI serves annually.
Brown says her hope is to employ new graduates of the program in one of MAMI’s three locations. Interpreters are typically employed as independent contractors, but can become staff members in time based upon need and performance, Brown notes. MAMI currently employs 35 people between its three locations.
Brown hopes that students graduating from the program will be ready to obtain national certification as a medical interpreter.
Interested students may obtain more information online at www.sunyocc.edu or by emailing the college at lifelong@sunyocc.edu or MAMI at info@MAMIinterpreters.org.
Along with the new medical-interpreting program, MAMI is also working to ensure there are enough trained interpreters to help in legal settings. Currently, MAMI has four certified legal interpreters, but is hoping to expand that number with a training course it hopes to hold in the fall or next spring, Brown says.
Headquartered at 309 Genesee St. in Utica, MAMI, a tax-exempt 501(c)(3) corporation, reported on its 2011 IRS Form 990 total revenue of $1.4 million, up from just over $1 million the year before. Of that revenue, $1.3 million comes from program service revenue. Typically the health-care providers and other organizations that require interpreter services pay MAMI for the cost of interpreting.
MAMI reported expenses of $1.3 million, up from $942,265 the year before, with $694,937 going toward salaries. MAMI reported a fund balance of $525,323, up from $422,045.
Contact The Business Journal at news@cnybj.com
Nearly half of local Bryant & Stratton students pursue health-care degrees
SYRACUSE — As the nation moves closer to insurance requirements in the federal health-care reform law, students in the health-care degree programs at Bryant & Stratton College know it’s an issue they’ll deal with as they pursue jobs. “We talk about that … in every class that we teach,” says Sherry Pearsall, faculty member and
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SYRACUSE — As the nation moves closer to insurance requirements in the federal health-care reform law, students in the health-care degree programs at Bryant & Stratton College know it’s an issue they’ll deal with as they pursue jobs.
“We talk about that … in every class that we teach,” says Sherry Pearsall, faculty member and practicum coordinator at Bryant & Stratton’s James Street campus.
Bryant & Stratton operates local campuses at 953 James St. in Syracuse and at 8687 Carling Road in Clay.
A combined total of about 1,100 students are enrolled at the two campuses, about 45 percent of whom are enrolled in medical-degree programs, according to the school.
Bryant & Stratton College offers health-care degree programs that prepare students for jobs in medical administrative assisting, medical assisting, and health-services administration.
The medical-degree programs have the highest enrollment of any of the programs offered at the two local campuses, according to Bryant & Stratton. The majority of students pursuing degrees in these fields attend class at the campus on James Street.
And those students are finding jobs upon completing their degree, according to Bryant & Stratton.
“It’s just not at all difficult to place a student that has a medical degree,” Pearsall says.
Over the past five years, Bryant & Stratton graduates in all degree programs in the Syracuse–area campuses have a job-placement rate of 88 percent in their field of study, more than 30 percent higher than the national average for college graduates, as determined by the Bethlehem, Pa.–based National Association of Colleges and Employers, according to the school.
About the health-care programs
The medical administrative-assisting program provides students with experience in operating a medical office, says Pearsall.
“They receive content in medical-office procedures, anatomy and physiology, medical terminology,” Pearsall says.
Graduates pursue jobs in physician offices, urgent-care settings, and in the financial-aid department of hospitals, she says.
The medical-assisting program combines administrative and clinical work, Pearsall says.
The course work includes the same classes as the program for the medical administrative-assisting degree, but also clinical course work.
“So, this individual could run the front office for a doctor and then also work in the back with patients,” she says.
That could mean assisting the doctor with the treatments and procedures, histories and physicals, doing electrocardiograms, checking a patient’s vital signs, helping with minor- surgical procedures, and coordinating all patient-care activity, Pearsall says.
Bryant & Stratton College also offers a bachelor’s degree program in health-services administration, with classes on both campuses.
“That prepares a student to be able to enter the health-care field [in] entry-level management,” she says.
Students are required to have internships. Those in the medical administrative-assistant degree program will intern in a medical office, completing 90 hours of administrative experience. Medical-assisting students complete 160 hours.
“When they go to this internship, it’s our expectation that they work as a staff member, and they’re to treat that as a job,” Pearsall explains.
Bryant & Stratton works to help its graduating students find a job within 90 days of earning their degree, says Shaunna Arnold-Plank, associate director of career services for the college’s James Street campus.
“Placement is fairly easy for them just because [of] their internship experience,” Arnold-Plank says.
Contact Reinhardt at ereinhardt@cnybj.com
Upcoming Health-Care Reform Tax
The Patient Protection and Affordable Care Act (PPACA) created the Patient Centered Outcomes Research Institute (PCORI), a nonprofit corporation which will, according to regulations, “assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings.”
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The Patient Protection and Affordable Care Act (PPACA) created the Patient Centered Outcomes Research Institute (PCORI), a nonprofit corporation which will, according to regulations, “assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings.” So, what does that mean? Essentially, the PCORI was designed to advance research on prevention, diagnosis, treatment, monitoring, and management of health conditions.
To fund the PCORI, the IRS will begin collecting a fee from health plans and insurance companies. The IRS issued final regulations on Dec. 6, 2012, and recently issued a revised IRS Form 720, which parties will use to report the fee. While the Form 720 is the existing excise-tax reporting form that is filed quarterly, for PCORI purposes, parties will file that form only once each year by July 31.
The PCORI fee applies to group accident and health plans, both self-funded and fully insured. Excepted benefits such as stand-alone vision and dental plans and most health flexible-spending accounts will be excluded from the calculation. However, there is no exception for stand-alone retiree plans or COBRA coverage. The fee applies to governmental entities as well, but not exempt governmental programs such as Medicare. Stop-loss policies are not subject to the fee. Self-funded plans specifically designed to cover employees who work and reside in another country are also exempt.
The fee will apply to plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019. The fee is $1 multiplied by the average number of lives covered under the health plan for plan years ending before Oct. 1, 2013. The fee will increase to $2 for plan years ending before Oct. 1, 2014. And, for plan years ending on or after Oct. 1, 2014, the fee increases based on the projected per-capita amount of national health expenditures.
The party responsible for paying the fee is the policy-issuer in the case of a fully insured plan, or the plan sponsor in the case of a self-funded plan. Plan sponsors and issuers will report and pay the fee on IRS Form 720, by July 31 of the calendar year following the last day of the plan year. That means, for calendar-year plans or policies that ended Dec. 31, 2012, the filing deadline is July 31, 2013. Plan years ending in 2013 will report and pay the fee on July 31, 2014, and so on.
There are four permissible methods in which insurers can determine the average number of covered lives: (1) the actual count method; (2) the snapshot method; (3) the member-months method; or (4) the state-form method. Sponsors of self-funded plans may use one of three alternative methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. The final regulations also permit self-funded plans to use any reasonable approach to determine the average number of lives covered under the plan for plan years beginning before July 11, 2012, and ending on or after Oct. 1, 2012. However, the regulations require both plan sponsors and insurers to apply the same method for the duration of the plan or policy year.
Employers self-funding, multiple-plan arrangements may treat such plans as a single plan for purposes of calculating the fee, provided the plans have the same plan year and the same plan sponsor. For example, if an employer sponsors a self-funded medical plan and a health-reimbursement arrangement (HRA), and both plans have the same plan year, participants enrolled in both plans will only count once for purposes of calculating the fee. This would not be the case if the HRA was offered with a fully insured medical plan.
Finally, after some apparent indecision on the part of regulators, the IRS released a memorandum on June 7, 2013, stating that the PCORI fee is deductible as an ordinary and necessary business expense.
Amy Zell is staff attorney and plan-benefit analyst for POMCO Group. Contact her at azell@pomcogroup.com or view her blog posts on health-care reform at go.pomcogroup.com/blog
Benefits consultants: employer-mandate delay brings mixed reaction
Area businesses with 50 or more full-time employees now have an extra year to make sure they are ready to meet the national health-care reform law’s mandate to provide health insurance for employees. Employee-benefits consultants have been busy in the last few weeks making sure their employer clients understand what the delay involves. The Obama
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Area businesses with 50 or more full-time employees now have an extra year to make sure they are ready to meet the national health-care reform law’s mandate to provide health insurance for employees.
Employee-benefits consultants have been busy in the last few weeks making sure their employer clients understand what the delay involves.
The Obama Administration on July 2 announced it would delay by one year the employer-mandate requirement in the Patient Protection and Affordable Care Act (ACA).
When approved in 2010, ACA required that companies with 50 or more full-time workers begin providing those employees health insurance in 2014, or face costly penalties. The mandate is now scheduled to take effect Jan.1, 2015.
The announcement led to a mixed reaction among employer clients, according to a representative of one firm.
“I think you would say it’s equal parts relief, concern, and confusion,” says Thomas (Tom) Flynn, a principal with Mercer who is based in Rochester and works with clients across upstate New York.
The delay targets the shared-responsibility penalties that don’t apply now until 2015, and it also includes a delay on information-reporting requirements for a year, Flynn says.
The premium subsidies to help consumers pay for their insurance will still be available, Flynn says, noting some companies were also confused about that component of the law.
Clients have expressed “some relief” to have the extra time to prepare for the employer mandate, says Vanessa Flynn, vice president of client services at POMCO Group in Syracuse.
“There’s still a lot of work to be done by everyone, so having the benefit of some extra time is a very positive thing, quite frankly for all of us in the industry as we look forward,” Vanessa Flynn says.
Tom Flynn advises companies to keep preparing to deal with the ACA’s employer mandate, even though the penalty stipulation is on hold for 12 months.
“So, take this time as … we don’t have to hurry, not we don’t have to do,” he says.
Paying fees
Some businesses were also confused about the upcoming fee payment for the Patient-Centered Outcomes Research Institute (PCORI), known as the PCORI fee.
“People were confused on whether or not there was a delay on that, which there’s not,” Mercer’s Flynn says.
It’s actually a fee for the Patient-Centered Outcomes Research Trust Fund, according to the IRS.
The agency describes it as “a fee on issuers of specified health-insurance policies and plan sponsors of applicable self-insured health plans that helps to fund the PCORI. The institute will assist, through research, patients, clinicians, purchasers and policy-makers, in making informed-health decisions by advancing the quality and relevance of evidence-based medicine. The institute will compile and distribute comparative clinical-effectiveness research findings,” according to the IRS.
That fee is due at the end of the month.
The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. For policy and plan years ending after Sept. 30, 2012, and before Oct. 1, 2013, the applicable dollar amount is $1. For policy and plan years ending after Sept. 30, 2013, and before Oct.1, 2014, the applicable dollar amount is $2, the IRS said.
Besides the PCORI fee, employers and other sponsors of self-funded plans, and the insurance companies offering health-insurance plans are subject to the health law’s transitional-reinsurance fee. That responsibility starts in 2014 and continues through 2015 and 2016.
This fee is designed to fund reinsurance payments to health-insurance issuers that cover high-risk individuals in the individual market.
Both fees apply to all plans, Vanessa Flynn says, regardless of whether they are a self-funded plan through a third-party administrator such as POMCO Group or a fully insured plan through a health insurer.
“The one thing that’s been consistent about this is that we’re really not surprised about anything,” she says.
Delay details
Mark Mazur, assistant secretary for tax policy, made the announcement July 2 in a blog posting on the website of the U.S. Department of the Treasury.
Mazur’s post was entitled “Continuing to Implement the ACA in a Careful, Thoughtful Manner.”
“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so,” Mazur said in the blog post.
The one-year delay is intended to accomplish two goals, Mazur said.
“First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees,” Mazur said.
The Affordable Care Act includes information reporting by insurers, self-insuring employers, and other parties that provide health coverage. It also requires information reporting by certain employers regarding the health coverage offered to their full-time employees.
The Obama Administration expects to publish proposed rules implementing these provisions this summer. That will follow a dialogue with stakeholders, Mazur said.
The stakeholders include employers that already provide their full-time workers with coverage exceeding the minimum employer-shared responsibility requirements, he said.
Once these rules have been issued, the Obama Administration will work with employers, insurers, and other reporting entities to “strongly” encourage them to voluntarily implement this information reporting in 2014, in preparation for the full implementation in 2015, Mazur said.
One national business group that opposed the health-care reform law in arguments before the Supreme Court last year says the delay just proves the law is not workable.
“This is simply the latest evidence that implementation of this terrible law is going to be difficult if not impossible, and the burden is going to fall on the people who create American jobs,” Amanda Austin, director of federal public policy at the National Federation of Independent Business (NFIB), said a news release. “Temporary relief is small consolation. We need a permanent fix to this provision to provide long term relief for small employers.” Mike Durant, NFIB/New York state director tweeted out Austin’s statement today.
Contact Reinhardt at ereinhardt@cnybj.com
Le Moyne College is the new home of a business-ethics program
DeWITT — Le Moyne College recently announced that it is the new home of a program focused on ethics in business. And the program cited the school’s work in creating the Jesuit Case Series, a group of business cases with “particular attention to issues of ethics, leadership, and sustainability,” in choosing Le Moyne to house
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DeWITT — Le Moyne College recently announced that it is the new home of a program focused on ethics in business.
And the program cited the school’s work in creating the Jesuit Case Series, a group of business cases with “particular attention to issues of ethics, leadership, and sustainability,” in choosing Le Moyne to house the organizations.
The Pedro Arrupe S.J. Program of Christian Social Ethics in Business is now operating as part of Le Moyne’s Madden School of Business. The program will be housed under the Center for Reflective Leadership and Business Ethics, one of three centers within the Madden School of Business.
The Arrupe program includes the chapters of the Woodstock Business Conference (WBC), which Le Moyne describes as a “key component” of Arrupe and the signature project housed within the program.
“They (the programs) chose Le Moyne,” says James (Jim) Joseph, the incoming dean of the Madden School of Business.
Le Moyne will install Joseph, the former president and CEO of Oneida Ltd., as dean in early 2014, he says.
The Arrupe program previously operated at the Woodstock Theological Center at Georgetown University, which closed as of June 30.
An “anonymous foundation in Europe that supports Catholic initiatives” approved the move because it controls the endowment for the program, says Joseph.
That foundation’s board met in Europe on July 9 and voted to transfer the seven-figure endowment from Georgetown to Le Moyne, Joseph says.
How it came about
Joseph learned about the program during a two-day international conference that John Fontana, a senior fellow of the Arrupe Program, conducted back in October, he says.
Fontana also now serves as the director of the WBC.
The WBC includes a total of 16 chapters, including those located in London, England and Winnipeg, Canada, according to the website for the Woodstock Theological Center. The WBC provides a network for exploring ideas related to the integration of faith and work, according to Le Moyne.
Joseph described the attendees as “bright, successful, caring, compassionate human beings that view business as a higher calling,” he says.
The attendees included representatives from the WBC chapter in Scranton, Pa., which is home to the University of Scranton, which, like Le Moyne, is a Jesuit college, according to Joseph.
The Scranton representatives invited Joseph to begin participating in their monthly meetings, which he has done. The dean of the University of Scranton’s Kania School of Business even asked Joseph to speak about the Jesuit Case Series.
After the Woodstock Theological Center at Georgetown University announced earlier this year it would close at the end of June, the WBC and the Arrupe program needed a new home, Joseph says.
Citing the interest in the Jesuit Case Series, John Fontana, director of the WBC, asked if the organization could move to Le Moyne, and the school sees the Arrupe program and WBC chapters as coinciding with its vision for the Madden School of Business, according to Joseph.
“It is going to attract significant thought leaders and speakers to our campus that will speak on issues of business in society,” he says.
Le Moyne will maintain the existing 16 WBC chapters and will add new ones, including one in the Syracuse area, the school said.
The mission of the Arrupe Program in Social Ethics for Business is “to develop, refine, and communicate an empirically-based Christian social ethics for business,” according to the website for the Woodstock Theological Center.
Le Moyne’s Jesuit Case Series provides an opportunity for integration with the work of WBC chapters in the U.S and abroad, Le Moyne Provost Linda LeMura said in a news release.
In collaboration with 93 other Jesuit colleges and universities in the U.S. and around the world, the Madden School said it is creating a platform dedicated to the development and distribution of business cases with particular attention to issues of ethics, leadership, and sustainability.
“Working with their academic counterparts, WBC chapter members will be encouraged to share their stories in case-study format with Jesuit business-school students,” said LeMura.
Contact Reinhardt at ereinhardt@cnybj.com
The Price is Right: a tale of the Merchant Prince of Syracuse
The concept of “you can’t sell anything unless you promote” was the underlying reason behind 19th century businessman Milton Price’s success. His unusual promotion practices ensured that customers flocked to his dry goods store. Milton S. Price was born in 1825 in a small town in Madison County. As a young man, he traveled to
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The concept of “you can’t sell anything unless you promote” was the underlying reason behind 19th century businessman Milton Price’s success. His unusual promotion practices ensured that customers flocked to his dry goods store.
Milton S. Price was born in 1825 in a small town in Madison County. As a young man, he traveled to Chittenango, where he learned about merchandising and the benefits of advertising. He briefly ran a small dry goods store (the precursor of today’s department stores) before moving his business to Syracuse. Price eventually set up business in the Globe Hotel on the corner of Salina and Washington St. (eventually E. W. Edwards and Son) and was joined by a partner, Henry Wheeler. This partnership lasted for almost 10 years before Price became sole proprietor.
Price quickly made a name for himself — The Merchant Prince — due primarily to his unusual marketing practices. Price was not a teetotaler and frequented many of the saloons north of the city. Saloon owners welcomed his presence despite the fact that he regularly rode his horse into the bar and caused a great deal of damage. However, Price always handsomely compensated the owners for that damage while bringing a bit of appreciated notoriety to their businesses.
Occasionally on the way home from one of his nights out, he would stop by the farmer’s market and purchase a cart full of vegetables. The driver was then told to dump his produce in front of Price’s store. Curious people quickly gathered to find out what was happening and subsequently took time to shop.
He was also known to throw unsuspecting youths into the Erie Canal. After rescuing them, he handed them money while instructing them to tell their mothers to spend the money on new clothes sold at his store. One of his more “popular” stunts was to ride his horse into his own establishment to show how durable his rugs were. Again, all these pranks were done as a form of promotion.
Milton Price’s exploits did provide entertainment for all the citizens of Syracuse; however, he was also known for his many acts of philanthropy. There are numerous newspaper articles that detail the contributions he made to the community. He donated 2000 yards of calico to Syracuse‘s orphan asylum and hospitals, teaching materials to the Ladies’ Employment Society, and thousands of dollars and merchandise to local churches and hospitals. Once while crossing Clinton Square, Price turned over a vendor’s push cart full of popcorn, nuts, and candy and told the children playing in the area to help themselves. He then paid the shocked vendor double its worth.
Price was married to Rhoda Lynn in 1842 by abolitionist Rev. Samuel May. The Price mansion stood on the property that is now the Dey Brothers building. It was noted for its beautiful grounds and interesting statuary. In fact, the dog statue that now stands in front of the SPCA came from his property. In 1889, Milton Price’s promotion days came to an abrupt end due to a short illness, but his antics were remembered for years to come.
Karen Y. Cooney is support services administrator at the Onondaga Historical Association (OHA) Museum (www.cnyhistory.org) at 321 Montgomery St. in Syracuse.
VIP Development buys CenterState CEO building
SYRACUSE — VIP Development Associates, Inc. (VIPDA) has announced its purchase of the building that houses the headquarters of CenterState CEO at 572 S. Salina
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