Communications About HSAs Need Improvement

July 8, 2014 (PLANSPONSOR.com) – Consumers, including those who currently have health savings accounts (HSAs), do not fully understand them, a survey indicates.

Only 30% of current HSA account holders passed a basic HSA proficiency quiz, and, at a 50% pass rate on the flexible spending account (FSA) proficiency quiz, FSA account holders scored little better. The Alegeus Technologies 2014 Consumer and Employer Healthcare Benefits Survey found that, particularly for HSAs, a lack of understanding of the full account value proposition may be hindering adoption—as more than 40% still view HSAs as spending accounts, exhibiting a lack of understanding of the ability to save beyond the plan year or to invest HSA funds.

Survey findings revealed most employers offer limited benefit support. Sixty-five percent communicate about health benefit enrollment only during the open enrollment period. Nearly 60% rely only on plan summary documents and enrollment forms to communicate benefit plan/account options, and only one-third offer interactive tools such as plan comparison calculators. In terms of quality of communication and support, employers seem to think they are doing a better job than consumers perceive they are doing. In their assessment of the quality of various aspects of employer benefit communications (clarity, depth, format, personalization and frequency), consumer ratings were consistently 20% lower than employer ratings.

Get more!  Sign up for PLANSPONSOR newsletters.

Consumers value a variety of options and freedom to choose the plans, accounts and features that are right for their unique situation. Nearly 70% of consumers indicated they would ideally like a wider array of plan options than is currently offered by their employer. That desire for choice extends beyond plan/account selection to include account features, such as the ability to choose their own HSA custodian. Forty-seven percent want to be able to choose their HSA bank versus having their employer choose for them, and 41% want their HSA managed by the same bank that manages their personal accounts.

Not surprisingly, the research findings confirm that consumers value account features that simplify the health care funding experience. Debit cards and multichannel (Web/mobile) account access were ranked highly by survey participants—with more than 65% rating those features as extremely valuable. Sixty percent of consumers highly value self-service features such as the ability to submit claims via mobile devices. Seventy-five percent value integration of benefit accounts and insurance claim data to streamline the process of reviewing and paying medical bills.

Commissioned by Alegeus, a third-party research firm polled more than 1,000 consumers and 500 employer health benefit decisionmakers for the survey. An infographic summarizing key research findings is at www.alegeus.com/researchinfographic. Alegeus will also share the full results of the research on an upcoming webinar on July 31.

PBGC Puts Hold on Shutdown Enforcement

July 8, 2014 (PLANSPONSOR.com) – The Pension Benefit Guaranty Corporation announced a moratorium, until the end of 2014, on the enforcement of 4062(e) cases.

Employee Retirement Income Security Act (ERISA) Section 4062(e) requires companies with pension plans to report to the PBGC when they stop operations at a facility and employees lose their jobs. In such a case, 4062(e) calls for the company to provide financial security to protect the plan. The PBGC typically requires companies to make additional contributions or provide a financial guarantee.

The agency said the moratorium will enable PBGC to ensure that its efforts target cases where pensions are genuinely at risk.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In November 2012, the agency implemented a pilot program under which it generally took no action to enforce Section 4062(e) liability against creditworthy companies or small plans and targeted its 4062(e) enforcement efforts at companies where the risk remained substantial. However, industry groups expressed concern that the pilot program affected business transactions that weaker companies needed, to recover (see “Industry Groups Urge PBGC to Rethink Shutdown Enforcement”).

PBGC said it will use the moratorium to consider further targeting and to work with plan sponsors to minimize effects on necessary business activities.

“PBGC’s mission is to preserve pensions and jobs,” says PBGC Director Josh Gotbaum. “We have targeted our enforcement efforts to be mindful of both. This latest action will give PBGC time to be more thoughtful and more effective.”

During the moratorium, from this July 8 through December 31, the PBGC will cease enforcement efforts on open and new cases. Companies should continue to report new 4062(e) events, but PBGC will take no action on those events during the moratorium.

In a statement, the American Benefits Council said it has expressed serious concern that, for many years—even after the agency’s 2012 announcement—the PBGC has regularly used its power to require employers to substantially overfund plans or make other large financial commitments in situations outside the scope of Section 4062(e). “PBGC’s enforcement has disrupted normal business activities. That is not what Congress intended; so we commend PBGC for this helpful action today,” Council President James A. Klein said.

Kathryn Ricard, ERISA Industry Committee (ERIC) senior vice president for retirement policy, said, “In our previous comment letter, we urged the agency to proceed with a more rational approach—one that would balance the real risk to the PBGC against unnecessary and additional regulations to all companies regulated by the PBGC.  

“We look forward to working with the agency to create workable rules that enable the PBGC to protect itself against the cost of terminating underfunded plans without imposing unnecessary burdens on employers.”

«