JUNE 18, 2002              BREAKFAST – 7:30 A.M.
                                                      HARASSMENT JEOPARDY
       Wednesday, June 5                                   moderated by Neil Alexander
        EMA Meeting
            See page 9              Are you familiar with the new Court decisions affecting your workplace?
                                    Join us for the June 18th breakfast meeting (7:30 a.m.) for an employment
         Tuesday, June 11           law update, primarily in the areas of harassment and discrimination
   Board of Directors Meeting       litigation, in an entertaining, informative, Jeopardy parody format. There
  7:30 a.m at Gallagher & Kennedy   will be a review of twenty new cases from the federal courts and U.S.
                                    Supreme Court, including decisions under the Americans with Disabilities
     Wednesday, June 12             Act and Family Medical Leave Act. Recently the Courts have issued
  North Valley HR Association       many important decisions affecting your day-to-day compliance with
    7:30 a.m. Breakfast Meeting     federal laws.
                                    Come and hear an update of new case decisions on:
     Tuesday, June 18                     ADA
  MPHRA Monthly Breakfast                 Harassment
         __________________               FMLA
       Tuesday, June 18             The panel will be hosted by Neil Alexander of Littler Mendelson, the
  July Newsletter Articles Due      largest firm in the country that limits its practice to representing
         __________________         management in labor and employment law disputes. Joining him will be
                                    his partner, Patrick Hicks; and Larry Bellar of Larry Bellar and Associates;
     Thursday, June 27              and Joanne Stark, an immigration attorney with Sacks Tierney. The topics
   ADA Mediation Workshop           include harassment, discrimination, famous quotes (to avoid!), the “blame
 Info: Ruth Peterson 602/640-5047   game”, and legal compliance for severance agreements and waivers. Play
         __________________         alongside our distinguished panel and remember, please phrase you answer
Register for AZSHRM Conference      in the form of a question!
            See page 3                                        __________________________
                                     WHEN Tuesday, June 18 – 7:30 a.m. breakfast
 Metro Phoenix HR Association             8:00 – 9:00 a.m. program, 9:00 a.m. new member orientation
        P. O. Box 7631                COST $20 for guest with reservation received by noon Fri., June 14
 Phoenix, Arizona 85011-7631               $30 for guest with late reservation
 602/417-8963 fax 602/285-0120             No charge for members; no reservations needed
        www.mphra.org               WHERE Marriott Hotel, 1101 N. 44th St., just north of the 202 freeway
                                     from the president                                  MPHRA 2002
    100 HR professionals attend
     an informational meeting for the North Valley affiliate chapter                 BOARD OF DIRECTORS
    90 HR professionals attend the MPHRA Executive Liaison dinner
    102 HR Professionals attend                                                                President
     the MPHRA Legislative Action Committee’s strategic workshop                          Deborah Wahl, SPHR
                                                                                           Gallagher & Kennedy
    186 HR Professionals attend the May MPHRA membership meeting
    This overwhelming response to recent MPHRA programs and initiatives is
                                                                                            Vice President
indicative of the renewed interest and energy of our association and its members.
At the beginning of the year, I discussed the Board’s priority of maximizing the          Connie Wood, SPHR
                                                                                          Arizona State University
value of your membership. With that commitment in mind, we concentrated
our efforts in identifying relevant program topics and credible expert speakers to
present those programs. Our North Valley expansion initiative is striving to                   Secretary
meet the needs of many current MPHRA members who live in that area, as well               Lenny Sanicola, SPHR
as offer new opportunities to other HR Professionals who have yet to discover                  WorldatWork
the value of association networking and career development.                                    480/348-7212
    We placed great importance on identifying and developing future association                 Treasurer
leadership. In June, your Board will host its second annual Succession Social,
                                                                                           Jack Milligan, SPHR
an opportunity to give members information and insight regarding leadership            Leathers Milligan & Associates
positions within the association. Any professional member interested in                        602/274-0711
chairing a committee or running for a board position, now or in the future,
is encouraged to attend. Details will be forthcoming.                                       Past President
    As you can see by our new home page, MPHRA launched a new, more                          Patricia Berg
contemporary identity with the release of its new logo at the May membership          MFS Investment Management
meeting. This logo exemplifies our enthusiasm for the future of the association                602/322-7922
and our optimism, in general, for the HR profession in the years ahead. A big
thank you to our Public Relations Committee – Chair, Vicki Grove – and our                      Directors
sponsors in the launch – Bernard Hodes Group, Fishel & Bocker HR Associates,                   Fred Bocker
and Leathers Milligan & Associates. We also wish to recognize our Communi-           Fishel & Bocker HR   602/266-5600
cations Committee, Chair Kristyn Olson, and our technology partner, WOW!
HR Communications, for their creative and visionary efforts in developing a               Christine Cervantes
valuable and friendly web site. Congratulations to all of You!                            ASU 480/965-4250
    In June, your Board of Directors will conduct a mid-year review. This review            Rena Cruse, SPHR
is to evaluate our original 2002 initiatives for relevance, check our progress on    Schaller Anderson    602/659-1150
identified projects, and ensure that we are meeting the fiscal requirements
                                                                                           John Guettler, SPHR
established early in the year. If necessary, the Board modifies its annual plan to
                                                                                       HRGroup, LLC 480/753-6188
more appropriately meet the needs of our members and guarantee a balanced
budget at year’s end. We encourage you to contact your Board at any time if               Sue Hutchison, SPHR
you have questions or recommendations about MPHRA activities.                                  480/515-3560
                                                                                           John Perkins, SPHR
                                                                                         Human Resource Partners
Our plans will support MPHRA’s Mission Statement and desired                                 602/264-7875
image                                                                                         Laura Piel, PHR
  Our initiatives will support our plans and serve our member’s needs                   Renaissance Personnel Group
     Our budget will support our initiatives and desired outcomes                              602/263-5100

                                               Deborah Wahl

2                                                                                                             MPHRA
                 We’re raising the bar. Are you ready?
                                                          One of the many 2002 Conference features would
                                                          include our “HR Champions Workshops.” This four-
                                                          hour workshop opportunity is based on SHRM National
                                                          keynote speaker David Ulrich’s inspiring book, HR
                                                          Champions. It is a stimulating management education
                                                          program focused on making strategy happen.
                                                          You’ve established yourself as a vital resource within
                                                          your organization. At the same time, you’re always
Join us at the Sheraton Conquistador Resort in Tucson
                                                          striving to take your abilities and contributions to a
for this exciting event. Whatever your career stage in
                                                          higher level. At the Arizona Society for Human
HR, this conference will help you “raise the bar” in
                                                          Resource Management (AZSHRM) and Arizona
order to be an even more valued strategic partner for
                                                          Healthcare Human Resource Association (AHHRA) we
your organization. There will be an array of
                                                          understand that. That’s why our conference on
educational sessions and speakers specifically selected
                                                          September 3rd and 4th is “Raising the Bar from
and sequenced to help you add to your unique skills
                                                          Practitioner to Partner.”
portfolio. Your horizons will be broadened and
professional potential heightened as you network with               Register on line at www.azshrm.org
other top HR professionals.                                 or contact Mysti Anderson at 480/968–6790 x-4311

                                                             Professional Recruiting & HR Consulting
                                                                 QUALITY HR RECRUITING ! !
                                                                QUALITY HR CONTRACTING ! !
                                                                   Company is owned and managed by
                                                            former HR Directors who are also leaders in
                                                            SHRM Chapter, State Area organizations.
                                                                   We have a 30 year tradition of successful
                                                             HR Recruiting & HR Contracting in the vital
                                                             expertise areas of:
                                                                    RECRUITING / EMPLOYMENT
                                                                  EMPLOYEE / LABOR RELATIONS
                                                                  TRAINING / ORGANIZATION DEV.
                                                                    COMPENSATION / BENEFITS
                                                                       DIVERSITY / EEO / AAP
                                                                        SAFETY / SECURITY
                                                           Call FRED BOCKER, President & COO at
                                                           602/266-5600 or e-mail fbocker@fishelhr.com

MPHRA                                                                                                              3
     If You Want To Close Gaps In Performance – Stop Focusing On Results!
                                                       by Neil Dempster

For those of you in attendance at the May 21st MPHRA                people don’t meet deadlines – something changes!
luncheon, this opening proclamation had the desired                 What changes is this thing called “work ethic.” Work
effect – it almost caused a corporate aneurism! After               ethic can be defined as the level of effort a person sees
making the controversial statement, I scanned the                   as appropriate for a particular work environment or
audience and was met with many looks of disbelief.                  situation. If you think otherwise, ask yourself “Why
Why? Because it flies in the face of everything we are              did the person show up on time the first day?”
told to focus on . . . and expected to get! Although I              Because s/he knew it was right! It was our work
may have said it for “shock value,” it doesn’t change the           environment that told this person what to do next!
reality . . . our exclusive focus on results is actually            That means our accountability is to start
getting us less results because we are losing sight of the                                                         
                                                                    communicating the Behavioral Expectations we
activities and behaviors which make the difference                  want through our behaviors, NOT through memo, e-
between mediocrity and peak performance. Remember                   mail, or policy manual.
. . . good is the enemy of GREAT! Yet how many of
our employees are lulled into a false sense of                      Second, as a result of previous (current??) manage-
accomplishment simply because they think they are                   ment practices, measurement systems, and coaching
doing “good enough” or “better than the next guy.” Our              feedback models, employees have formed an
organizations will never get to GREAT if we don’t start             inappropriate opinion as to what is considered
“behaving” the language of results. The main focus of               acceptable performance. So when we communicate
my keynote, “Whiners to Winners”, was to help convey                that we need more production, better quality, faster
                                                                   service, or simply present the dreaded “do more with
the power of Behavioral Expectations and to provide
                                                                    less” speech, it is no wonder that employees think we
several methods to close gaps in performance. In this
                                                                    are never satisfied, and we expect more production for
article, I will attempt to offer two additional
                                                                    the same pay. The easiest way to overcome this
perspectives on this performance imperative.
                                                                    obstacle is never to let the employee form this opinion
First, let’s discuss the issue around “work ethic.” I often         in the first place! One way to deal with this situation
have people tell me value systems have changed – that               is to make the first line in every employee’s job
people entering the work force just don’t have a work               description: “To be incrementally better tomorrow
ethic any more. But when I ask groups, “Where does                  than you are today.” and be consistent in supporting
work ethic come from?” typical responses include, “they             the initiative. This conveys volumes! Why? Using
learn it at home,” or “it comes from school,” or “it’s all                                
                                                                    the Results Formula presented during the keynote
about their upbringing,” reflecting a lack of                       (Results = Ability x Effort x Systems), if someone is
understanding of how behaviors are learned. Although                learning something new every day (Ability), and
there is a certain amount of truth in their responses, the          applying it consistently (Effort), better results are the
actual answer to the question is – work ethic comes                 outcome. It would be difficult to deny the logic in this
from . . . WORK! Let me explain. With very few                      formula. And since learning never stops, a Behavioral
exceptions, on the first day of a new job people show up                          
                                                                    Expectation of continuous improvement becomes
on time, come back from their breaks on time, and do                the norm, instead of the “flat-lining” that is more
their work on time – on the first day. It’s the second day          typical. An additional benefit of this approach is that
where we see the change start to occur because when                 the employee will see coaching feedback as
s/he shows up on time and looks around and sees that                developmental feedback instead of seeing it as
other people don’t seem to care about coming to work                criticism.
on time – something changes! Or when he comes back
from his breaks on time and sees that other people don’t            Neil Dempster is a keynote speaker, seminar developer, and
come back on time – something changes! Or when she                  trainer with Clearview Performance Systems. For copies of his
does her work on time only to find that other                       handout or the EffortSteps and LEARNlinks® “royalty-free”
                                                                    worksheets, he can be reached at 480/598-9000 ext. 101 or e-mail
                              . . . continued, next column          him at Neil@ClearviewOnline.com.

4                                                                                                                           MPHRA
                                         LEGISLATIVE UPDATE – 2002
                                             by Michele Tyler, Fennemore Craig, P.C.

With the end of the 2002 regular legislative session in            Governor’s Council on Workforce Policy. The new
sight, the Arizona legislature is considering a few                council would assume the old council’s responsibilities
remaining employment-related bills. The legislation                and develop guidelines for criteria to determine the
currently getting the most attention at the capitol                annual qualifying wage rate per county so the rate
includes –                                                         reflects current economic conditions and local business
SB 1042 - Broadcast Employees Non-compete Clause                   needs in the county. To receive certain grants and
Since last month’s report, this bill has been further              awards, a business must pay employees at least the
amended to prohibit broadcasters from entering into                county’s qualifying wage rate. The bill was approved
non-compete agreements with any of their employees.                by both the House and Senate and sent to the Governor
This bill was sent to the Governor on May 15, 2002.                on May 16, 2002.
SB 1201 – Wages, Immigration Status, National Origin               HB 2353 - Arizona Civil Rights Act Revisions As we
The House Ways & Means Committee adopted this                      reported last month, this strike-everything amendment
strike-everything amendment that would require                     adds “mental disabilities” to the list of classifications
employers to pay employees wages due regardless of                 protected by the Arizona Civil Rights Act and prohibits
their immigration status or national origin. Arguably              most pre-employment medical examinations and
this restates existing law. Rumor has it this amend-               inquiries. It does not, however, enhance the damages
ment may be stripped off in conference committee, but              available to a prevailing plaintiff for a violation of the
may reappear as an amendment to another bill.                      Act, in contrast to prior versions of the bill. Possibly
HB 2265 - Job Training Programs This bill would                    because a cost to the state General Fund has been
replace the Arizona Job Training Council with the                  identified, the bill has been in limbo since both Senate
                              . . . continued, next column         caucuses reviewed it on April 17, 2002.

MPHRA                                                                                                                           5
                                           MANAGEMENT IN REAL LIFE
                                                            by Kevin Herring
    Choice. When should employees have it? How much                       Employees knew that voicing disagreement would
    should they have? Within what purview should it be                    not be tolerated. But unspoken consensus was
    granted? The questions themselves rather infer that                   declared overwhelmingly through inaction as “no!”
    employees only have choice when someone else allows it
                                                                          If end-users had been asked, they could have
    – as if in the absence of permission, no choice exists.
                                                                          responded verbally the same as they did non-
    But is this true? Do employees only have choice when
                                                                          verbally. The outcomes would have been the same
    supervisors and managers say they do?
                                                                          in either instance – no implementation. The only
    In a client meeting, I once heard a staff manager                     difference is that by not asking, the organization
    complain about the lack of success with all of the                    spent significant resources, including time and
    programs “rolled out” to the organization during the                  money, trying to force implementation that was
    previous several months. He stated that despite the                   doomed from the start.
    apparent support of operations managers and meetings to
    explain the merits of each program, the programs failed               To be sure, offering choice can be risky from the
    miserably.                                                            standpoint of relinquishing control. But sometimes
                                                                          we kid ourselves into believing that when others
    When I asked how many of those impacted by the                        nod their heads affirmatively we have control and
    programs were involved in the decisions to implement                  commitment. We drift off into some management
    them, I was told that the operations managers were                    fantasy land where we dictate and people respond,
    expected to return to their respective operations and                 like pushing buttons on a machine. This truly is
    “sell” the programs to the rest of the work force. This               delusional thinking. Even in the most autocratic
    staff manager said that getting “buy-in” should not have              environments, such as in the military, we know that
    been a problem since the managers were all “on board.”                soldiers exercise choice sometimes at the literal
    I then made a suggestion that I’m sure was taken, at least            expense of their leaders.
    initially, as management school heresy. I asked the staff             So, do employees have choice? Maybe we are
    manager to consider what would have happened had he                   asking the wrong question. Perhaps the question
    held a meeting with end-users prior to implementation                 ought to be, “Do supervisors and managers have
    and asked them whether or not the program should be                   choice?” Or, put another way, “Whose driving this
    implemented. His response was predictable, “What?                     ship anyway?”
    Give them a choice? What if they choose ‘no’?”
    The fact of the matter is they had already chosen “no.”
                                                                          Kevin Herring is President of Tucson-based Ascent Manage-
    They just hadn’t verbalized it. The staff manager                     ment Consulting, committed to creating management, culture,
    assumed that because operations managers were                         organization, and governance systems that enable personal
    compliant that they and their staff were committed.                   fulfillment and organization effectiveness. For information
                                                                          contact Kevin at 520/742-7300 or KevinH@AscentMgt.com.
                                        . . . continued, next column

6                                                                                                                               MPHRA
                                                         by Martha I. Finney
The events of the last year have changed all our lives                   Mature companies are cutting huge numbers of
forever. And they have changed the HR profession                         employees, and I’m worried they may be losing
forever. While this country has experienced unspeakable                  valuable talent that could otherwise help them build
tragedy, fear, and scandal before, never before have so                  their future.”
many events impacted American business and the                           Understand and promote the intrinsic value of
economy so profoundly as they have in recent months.                     your company. No business will prosper unless its
And never before have they impacted HR so directly.                      purpose adds value to the world in a meaningful way.
From the economy, to September 11, to Enron, every                       People are not your company’s most valuable asset,
terrible headline has gone to the heart of humanity. And                 after all. Their passion is. Curtis Carlson, president
that means it goes straight to the heart of the human                    of SRI International, said this about the power of
resources department.                                                    intrinsic motivation: “It’s when you create an organi-
In an effort to gain some understanding of how to move                   zation that taps into that need that you find people
forward in unstable times, I interviewed some of the                     who are incredibly resilient. They’ll work incredible
nation’s top business thinkers for my new book, In the                   hours. They’ll suffer a hundred defeats because they
Face of Uncertainty. Every one of them said the future of                see the opportunity to make a significant impact.”
their business depends on the sustained passion, optimism,               Forget the quick-money dream of the so-called
and mission focus that their people bring to work every
                                                                         New Economy. Joe Galli, president and CEO of
day. As a leader in one of the most profoundly affected
                                                                         Newell Rubbermaid, had this to say: “The worst thing
functions in your company, you can let other people
                                                                         that can happen to our economic environment is the
struggle with the answer to the question, “What do we do
                                                                         notion of easy money. The best thing is the
now?” and then tell you what to do. Or, you can use the
                                                                         restoration of a values system that says that effort will
following insights and advice and take the lead yourself
                                                                         be rewarded in the long term. We have to get back to
— dynamically driving your company out of these
                                                                         reading, studying, applying ourselves...and trying to
uncertain times and toward a brighter, more promising
                                                                         become the best we can be. When we get back to that,
                                                                         we can perpetuate a great society.”
Here’s how to make this time HR’s shining hour:
                                                                         Remember that being a learning organization
Take a global, long view perspective. Marilyn Carlson                    doesn’t stop at merely acquiring new knowledge.
Nelson, Chairman and CEO, Carlson Companies, Inc.                        New data reflects a changing world. And it’s the
said, “America and its businesses are so young compared                  changing world itself that will drive the future. Relish
with others in the world. We are only now learning to                    that change. Theodore G. Shackley, Assoc. Deputy
take the long view and act accordingly. It is a new role for             Director of Operations (retired), Central Intelligence
us, but one we must play if we are to be truly understood                Agency, said: “Stay educated and remain receptive to
and embraced in the long term by other countries,                        outside ideas and information. Don’t get locked into
companies, and cultures.”                                                the thought that the way things are is the way things
Give leadership a chance throughout the ranks. Steve                     will continue to be.”
Harrison, president of Lee Hecht Harrison, said, “Great                  Be a student of resilience. Resilience will get you
leadership comes from entirely unexpected places. It’s                   through everything and anything the business world
understatement; it’s dignity; it’s service; it’s selflessness.           throws at you. Managing Transitions author William
Business has a lot to learn from the average American.”                  Bridges said: “Beyond whatever doubts you have,
Focus your perspective on the middle future. If you                      you must have an underlying faith that you can start
respond only to the immediate emergencies, you risk                      all over...that you can bring it all to a close and then
losing mission-critical talent. James Madden, chairman,                  begin again.”
CEO, and president of Exult, said: “Let’s not make                       Martha I. Finney is a management consultant, speaker, and
decisions today that we’re going to regret tomorrow.                     author of In the Face of Uncertainty: 25 Top Leaders Speak Out
                                                                         on Challenge, Change and the Future of American Business.
                                    . . . continued, next column         Contact her at Martha@MarthaFinney.com.

MPHRA                                                                                                                                     7
                                                                  WHAT DO VOLUNTEERS HAVE TO DO
        MEET OUR NEW MEMBERS                                      WITH CONFERENCES? EVERYTHING!
                   by Kristie Lindeman, SPHR

Darla Brassel is responsible for the HR functions at the       Only with the help of volunteers can there be an
Edward Jones Regional Headquarters in Tempe. She               Arizona State SHRM Conference. The chair people
joined the financial services firm over four years ago after   and committee members are all volunteers who give
graduating with a Bachelor’s degree in HR Management.          their time so year after year the state SHRM con-
                                                               ference is a worthwhile event for all HR professionals.
Jennifer Hartranft, PHR, is the staffing manager at            This year we again ask for volunteers to help with the
Spectrum Astro, a satellite manufacturing company with         State SHRM Conference in Tucson in September. If
500 employees. She is a graduate of Rutgers University         you think giving your time to help stuff packets, work
and is presently studying for her M.Ed. in instructional       in the bookstore, or be a guide sounds like fun, contact
technology at ASU.                                             CFillmore@mindspring.com for more details.
Ellen Jacoby, PHR, is the HR Manager responsible for
employee relations and recruiting for Orthopedic Device
Manufacturer. Ellen is a member of SHRM.

Giancarlo Picorelli is the HR Manager for Porcher/
American Standard. It manufactures bathroom fixtures.
Giancarlo was a member of the Central Florida HR
Association before relocating to Chandler.

Diane Scroggin is the Director of Corporate Affairs and
Human Resources for SOHO Resource Group, Inc., an
emerging benefits management and services company for
the self-employed.

Christopher Sierra, PHR, has over nine years of HR
experience and is currently the HR Manager for Payment
Systems for Credit Unions. His Bachelors of Business
Administration degree is from the University of New

Mary Supplee is the Corporate HR Manager of Howard
S. Wright Construction Co., where she oversees all HR
functions for six offices in four states. She has been in
HR for 15 years and is enrolled in the HR Management
program at the University of Phoenix.

           8                                                                                                    MPHRA
               submitted by Lenny Sanicola, SPHR                                by Brian Eastwood

"Employer Practices in Providing Employee Health
Benefits and the Employer Role in Covering More of
the Uninsured" will be held on Thursday, June 13, from
8:30 a.m. until noon in room 200 at St. Luke's Health
Initiatives, 2375 East Camelback Road, Phoenix.
This meeting is part of national research conducted by
the non-profit Employee Benefit Research Institute           Five Shoes Waiting to Drop on Arizona: a
(EBRI) to explore employee and community health             look at the trends impacting HR & business
issues. Phoenix-area employers and employee benefits
                                                           Please join us for the June breakfast meeting and be
professionals are invited to discuss ideas for expanding
                                                           treated to a dynamic presentation by Mary Jo Waits,
the number of Americans that have health insurance.
                                                           Associate Director of the Morrison Institute for Public
If interested in participating or receiving information,   Policy. Ms. Waits has received much acclaim for her
contact: Karl Polzer, polzer@ebri.org or Ray Werntz,       presentation of the present trends that are well under-
werntz@ebri.org EBRI Consumer Health Educ.Council.         way in Arizona, but that we can’t quite see yet. These
                                                           trends could overwhelm us if we don’t spot them now
                                                           and use our knowledge to plot a positive course for
                                                           the future. Ms. Waits deals with issues such as
                                                           availability of workforce talent, education, and issues
                                                           of vital importance to business in Arizona.
                                                           The Morrison Institute is the “think tank” of the
                                                           nation’s fourth largest university – ASU. Ms. Waits
                                                           oversees the Institute’s project development, publica-
                                                           tions, research, and analysis. She is principal author
                                                           of “Five Shoes Waiting to Drop,” a publication in the
                                                           Institute’s Arizona Policy Choices series.
                                                           Ms. Waits is an executive board member of the
                                                           Governor’s Strategic Partnership for Economic
                                                           Development (GSPED) and served four years on the
                                                           North American Development Bank’s Advisory
                                                           Board. The Business Journal repeatedly selects Ms.
                                                           Waits for its list of “Most Influential People” in the
                                                           Phoenix Metropolitan Region. Her Master’s degree in
                                                           public administration is from USC.
                                                           Date    Wednesday, June 5, 2002
                                                           Time    7:30 to 9:30 a.m.
                                                           Place   200 E. Van Buren St., 4th Floor
                                                           Parking Validated parking for the lot off 2nd St., N.
                                                                   of building. Bring ticket for validation.
                                                           Cost    $15 SHRM/EMA Member • $20 EMA
                                                                   Member • $25 Non-Member
                                                           RSVP    Register online at www.ema-az.org or
                                                                   e-mail jennifer.ellis@rada-adv.com

MPHRA                                                                                                                9
                                           by Neil M. Alexander and Peter C. Prynkiewicz

 A survey by the Arizona Family Planning Counsel in                   share the entity’s religious tenets, and 3) is a non-
 2000 found that 62 percent of Arizonans’ health care                 profit organization as described in section
 plans did not cover contraceptives to the same extent as             6033(a)(2)(A) of the Internal Revenue Code of 1986,
 other prescriptions. There have been several attempts to             as amended. Religious employers whose religious
 address this situation at the state and federal level. For           tenets prohibit the use of prescribed contraceptive
 example, approximately 17 states have passed                         methods may require that the entity providing health
 legislation specifically outlawing any discrimination in             insurance coverage for its employees provide a
 health plans. Supporters of the legislation “got a rise”             contract that does not include coverage for all federal
 out of the fact that these plans covered prescription                food and drug administration approved contraceptive
 Viagra use, but not prescription contraceptives for                  methods. To qualify for the exemption, a religious
 women. Insurance plans that cover federal employees                  employer must submit a written affidavit to the health
 are already legally required to cover contraceptives on              insurance company stating that it is a religious
 an equal basis to other prescriptions. Support is also               employer. Upon receiving the affidavit, the company
 growing for the federal Equity in Prescription Insurance             shall issue a health insurance contract to the religious
 and Contraceptive Coverage Act which would require                   employer that excludes coverage of prescription
 all insurance plans to cover contraceptives equally in the           contraceptive methods.
 private market                                                       It is unlikely that hospitals, health plans, and other
 On April 21, 2002, Governor Hull signed Arizona’s                    privately run companies that have historically been
 Contraceptive Equity Act (the “Act”) into law. Thus,                 funded by religious organizations (many of which
 Arizona has become the latest state to address this issue            have excluded contraceptive coverage) will meet the
 through legislation. The Act does not require insurance              exemption. Competent counsel should be consulted
 companies to provide any specific coverage and does                  on a case-by-case basis.
 not address the extent or level of coverage that an                  Any religious employer that invokes the exemption
 insurer or employer must provide. It does, however,                  must provide prospective subscribers with written
 require that insurance plans that provide coverage for               notice that the religious employer refuses to cover all
 prescription drugs also provide coverage for                         federal food and drug administration approved
 contraceptive prescriptions on the same basis. In other              contraceptive methods for religious reasons. The
 words, if a group insurance plan covers prescription                 exemption does not exclude coverage for prescription
 drugs, it must also cover any prescribed drug or device              contraceptive methods that a health care provider
 that the United States Food and Drug Administration                  orders for medical indications other than to prevent an
 has approved as a contraceptive. Similarly, if an                    unintended pregnancy.
 insurance contract provides coverage for outpatient
 health care services, the contract must also provide                  The Act applies to all contracts, policies, and
 coverage for outpatient contraceptive services. The Act              evidences of coverage issued or renewed from and
 defines outpatient contraceptive services as “consulta-              after December 31, 2002. Employers should consult
 tions, examinations, procedures and medical services                 their group health plan brokers to ensure they are in
 provided on an outpatient basis and related to the use of            compliance. Penalties for non-compliance include
 United States Food and Drug Prescription Contraceptive               suspension or revocation of an insurer’s certificate of
 methods to prevent unintended pregnancies.” The Act                  authority, which would prevent it from conducting
 only applies to group health insurance coverage; it                  further business in Arizona. Civil penalties in lieu of,
 specifically exempts contracts issued to individuals on a            or in addition to, suspension or revocation include
 non-group basis.                                                     fines of up to $1,000 for each unintentional violation
                                                                      (not to exceed $10,000 in any six-month period), and
 The Act includes an exemption for a “religious
                                                                      up to $5,000 for intentional violations (not to exceed
 employer.” A religious employer is an entity that 1)
                                                                      $50,000 in any six-month period).
 primarily employs persons who share the religious
 tenets of the entity, 2) primarily serves persons who                Neil M. Alexander is a Shareholder with Littler Mendelson in
                                                                      Phoenix. Peter Prynkiewicz is an Associate. If you would like
                                 . . . continued, next column         additional information, call Neil or Peter at 602/474-3600.

10                                                                                                                           MPHRA

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