Compliance July 17, 2006

Current Newsom Health Plan Expands Earlier Coverage Program

July 17, 2006 (PLANSPONSOR.com) - The plan that San Francisco Mayor Gavin Newsom's recently announced to offer a universal health coverage actually represents an expansion of a 10-year-old program that covers medical expenses for lower-income Golden State residents.
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Newsom’s proposed expansion of the state’s Medi-Cal program is a radical one that offers welcoming arms to the estimated 82,000 San Franciscans who are not covered, regardless of income, immigration status or pre-existing medical condition, according to the San Francisco Chronicle.

In 1994, at the urging of the state, the city created a health care management organization for residents served by the Medi-Cal insurance program. The city’s goal was to control costs by better managing the care Medi-Cal beneficiaries received. The health plan now has 52,000 members, 32,000 of whom receive Medi-Cal coverage.

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But before the Board of Supervisors signs off on the Newsom administration’s San Francisco Health Access Program, a majority of supervisors and the mayor will have to agree on how to pay for it.The $200 million that Newsom’s proposal is estimated to cost annually would be paid for primarily with city funds, as well as through a combination of business contributions and member premiums. A local bill would require some companies to pay for employee health care.

According to the Chronicle, the city is still discussing the health needs of the city’s uninsured population and if they would be willing to pay for a plan under which care is provided only in San Francisco and largely at public and nonprofit clinics and hospitals.

One of the plan’s principal objectives, supporters say, will be to promote the advantages of preventive care – regular visits to a gynecologist, for example, and to help beneficiaries establish long-term relationships with primary care physicians – in hopes of persuading the uninsured to sign up.

Compliance July 14, 2006

Broadcom Internal Probe Finds Backdated Options

July 14, 2006 (PLANSPONSOR.com) - The company plans to restate results for the last five years, recording expenses of more than $750 million.
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An internal investigation by Broadcom Corp into its stock options grants to employees prompted the company to announce on Friday that it would restate its financial results for the past five years and record non-cash expenses of more than $750 million.

The company said it found no evidence of improper behavior in the preliminary review, only that for certain option grants awarded during the years 2000 to 2002, the allocations to individual recipients and/or formal corporate approvals had not been completed as of the original accounting measurement dates, according to a news release.

The company, which provides semiconductors for wireless communications, stands next in a long line of technology companies entangled in a federal stock options probe that some have likened to the mutual fund trading scandals, which exploded a few years ago ( Stock Option Probe Biggest Since Abusive Fund Trading Cases ).

In June, US regulators asked Broadcom for documents related to how it grants stock options to employees.

No issues have been identified that affect equity awards issued to Broadcom’s co-founders, CEOs or any member of the Board of Directors. But about 95% of options awards granted since 1998 have gone to employees as part of their compensation packages, according to a release.

According to a release from the company, no equity award has been identified that was not authorized, or where any officer or director approved an individual equity award from which he or she personally benefited.

The company said the additional non-cash stock-based compensation expense will not affect the company’s current cash position, financial condition or previously reported revenues and will be offset by corresponding increases in additional paid-in capital, leaving shareholders’ equity unaffected.

The company has decided to restate its financial statements for the years 2000 to 2005 and for the first quarter of 2006.

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