Employers have been exiting the retiree health business for a decade-and-a-half, amid rapid inflation in the cost of health care and increasing mobility of workers. But some feared the pace would quicken amid recent changes that boost benefits provided by Medicare, the government's health insurance program for the nation's 43 million elderly and disabled people.

"There is definitely more change in the air now that Medicare Part D has come into play. There are fewer companies that are not planning on doing anything at all," said Cara Jareb, director of retiree medical at Watson Wyatt. "The willingness to eliminate the benefit is clearly increasing."

Changes in the Medicare program include adding prescription drug benefits, known as Medicare Part D. Experts feared that with a richer government benefit, employers would be more likely to stop offering coverage.

About a third of U.S. employers offered current workers retiree coverage in 2005, down from about two-thirds in 1988, according to a recent study by the nonprofit Kaiser Family Foundation.

According to Standard & Poor's, plans for retiree benefits at S&P 500 companies, excluding pensions, were underfunded by $321 billion, meaning promises to retirees are only 22 percent funded.

EMPLOYERS WEIGH EXITING

About three-quarters of U.S. companies polled are accepting a Medicare subsidy from the government intended to keep employers in the business of helping workers defray health costs when they retire.

"The question is, is the bribe enough?," said Mark Pauley, a health economist at the Wharton School at the University of Pennsylvania. "My distinct impression is that a fair number of employers did adjust their own contributions around the Medicare benefit. But the numbers completely abandoning it are small."

Most companies are skimming the benefits they do offer. A quarter of employers are tightening eligibility for current workers, and a similar amount are offering more expensive plans.

About 40 percent of employers said they believed the best way to solve their retiree health cost problem is to exit it altogether, although most continue to offer benefits because of practical considerations, the study found.

The same amount, about 40 percent, said taking the government subsidy is the best way to keep costs down. Jareb said it showed that even though companies might think exiting the business would help with costs, most are unlikely to do it at this point.

"In essence the numbers indicate that -- whether due to employee relations, benefits philosophy or collective bargaining -- exiting retiree heath is not a viable option for the majority of employers" the study said.

The report calls for completely smoke-free buildings and public places, saying that separate smoking sections and ventilation systems don't fully protect nonsmokers. Seventeen states and more than 400 towns, cities and counties have passed strong no-smoking laws.

But public smoking bans don't reach inside private homes, where just over one in five children breathes their parents' smoke - and youngsters' still developing bodies are especially vulnerable. Secondhand smoke puts children at risk of sudden infant death syndrome, or SIDS, as well as bronchitis, pneumonia, worsening asthma attacks, poor lung growth and ear infections, the report found.

Carmona implored parents who can't kick the habit to smoke outdoors, never in a house or car with a child. Opening a window to let the smoke out won't protect them.

"Stay away from smokers," he urged everyone else.

Even a few minutes around drifting smoke is enough to spark an asthma attack, make blood more prone to clot, damage heart arteries and begin the kind of cell damage that over time can lead to cancer, he said.

Repeatedly questioned about how the Bush administration would implement his findings, Carmona would only pledge to publicize the report in hopes of encouraging anti-smoking advocacy. Passing anti-smoking laws is up to Congress and state and local governments, he said.

"My job is to make sure we keep a light on this thing," he said.

Still, public health advocates said the report should accelerate an already growing movement toward more smoke-free workplaces.

"This could be the most influential surgeon general's report in 15 years," said Matthew Myers of the Campaign for Tobacco-Free Kids. "The message to governments is: The only way to protect your citizens is comprehensive smoke-free laws."

The report won't surprise doctors. It isn't a new study but a compilation of the best research on secondhand smoke done since the last surgeon general's report on the topic in 1986, which declared secondhand smoke a cause of lung cancer that kills 3,000 nonsmokers a year.

Since then, scientists have proved that even more illnesses are triggered or worsened by secondhand smoke. Topping that list: More than 35,000 nonsmokers a year die from heart disease caused by secondhand smoke.

Regular exposure to someone else's smoke increases the risk of a nonsmoker getting heart disease or lung cancer by up to 30 percent, Carmona found.

Some tobacco companies acknowledge the risks. But R.J. Reynolds Tobacco Co., which has fought some of the smoking bans, challenges the new report's call for complete smoke-free zones and insists the danger is overblown.

"Bottom line, we believe adults should be able to patronize establishments that permit smoking if they choose to do so," said RJR spokesman David Howard.

And a key argument of some business owners' legal challenges to smoking bans is that smoking customers will go elsewhere, cutting their profits.

But the surgeon general's report concludes that's not true. It cites a list of studies that found no negative economic impact from city and state smoking bans - including evidence that New York City restaurants and bars increased business by almost 9 percent after going smoke-free.

To help make the point, Carmona's office videotaped mayors of smoke-free cities and executives of smoke-free companies, including the founder of the Applebee's restaurant chain, saying business got better when the haze cleared.

In addition to the scientific report, Carmona issued advice for consumers and employers Tuesday:

-Choose smoke-free restaurants and other businesses, and thank them for going smoke-free.

-Don't let anyone smoke near your child. Don't take your child to restaurants or other indoor places that allow smoking.

-Smokers should never smoke around a sick relative.

-Employers should make all indoor workspace smoke-free and not allow smoking near entrances, to protect the health of both customers and workers, and offer programs to help employees kick the habit.

Over the past few days, the jurors have watched a defense attorney and a prosecutor pantomime masturbation. A doctor has lectured on the lengths the defendant was willing to go to enhance his sexual performance.

The white-handled sexual device sits before the jury box for hours at a time. Occasionally an attorney picks it up and squeezes the handle, demonstrating the "sh-sh" sound of air rushing through the contraption's plastic tubing.

The jurors sometimes exchange awkward looks and break into nervous laughter when the testimony takes a lurid turn.

Thompson, 59, is charged with four counts of indecent exposure, each punishable by up to 10 years in prison. If convicted, he would also have to register as a sex offender, and his $7,489.91-a-month pension would be in jeopardy.

Thompson's former court reporter, Lisa Foster, wiped away tears as she described tracing an unfamiliar "sh-sh" in the courtroom to her boss. She testified that between 2001 and 2003 she saw Thompson expose himself at least 15 times.

"I was really shocked and I was kind of scared because it was so bizarre," said Foster.

She testified that during a trial in 2002, she heard the pump during the emotional testimony of a murdered toddler's grandfather.

The grandfather "was getting real teary-eyed, and the judge was up there pumping on that pump," she said. "It was sickening."

The allegations came to light after a police officer who was in Thompson's court heard pumping sounds and took photos of the device during a break in the proceedings.

Thompson took the stand in his own defense, saying the device was a gag gift from a longtime friend with whom he had joked about erectile dysfunction. He said he kept the pump under the bench or in his office but didn't use it.

"In 20-20 hindsight, I should have thrown it away," he said.

The R-rated testimony has produced occasional outbursts of laughter and surreal scenes. A man who once served as a juror in Thompson's court testified that he never saw the device, but figured out what it was based on movies he had seen.

The comment sent sidelong glances through the courtroom.

"It sounded like a penis pump to me," Daniel Greenwood testified. He said he had seen such devices in "Austin Powers" and "Dead Man on Campus."

Dr. S. Edward Dakil, a urologist called as an expert witness, repeatedly prompted laughter from the jury when discussion turned to the penis pump. Dakil defended use of the device after defense attorney Clark Brewster said it was an out-of-date treatment for erectile dysfunction.

"I still use those," Dakil testified.

Brewster paused.

"Not you, personally?" he asked.

"No," Dakil responded as jurors laughed. "I recommend those as a urologist."