Products January 10, 2017

Acquisition Poised to Help Employers Save on Health Care Costs

Patient Care’s advocacy and transparency services help employees better understand the complicated health care system and make informed decisions about health care spending.
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DirectPath, a provider of employee health care engagement and compliance tools, has signed an agreement to acquire Patient Care, a Milwaukee-based health care advocacy and transparency company.

With the acquisition, DirectPath will expand its suite of services for employers, offering them a complete solution for affordable health care.

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DirectPath’s strategic engagement services help Fortune 1000 employers experience a significant return on their benefits investments by increasing employee participation in consumer-driven health plans. Patient Care’s advocacy and transparency services help employees better understand the complicated health care system and make informed decisions about health care spending. The acquisition of Patient Care expands DirectPath’s services; employees of DirectPath’s customers can now receive guidance for selecting the most affordable, high quality procedures covered under their plans.   

“Once a health plan has been selected, employees still need guidance on making the most cost-efficient care decisions. For more than 15 years, Patient Care has performed this invaluable service, helping employees become informed health care consumers,” says Michael Byers, executive chairman of DirectPath. “Patient Care’s leading advocacy and transparency services are a natural complement to our active engagement services, allowing us to help employers and their employees control costs every step of the way, from the plan they enroll in to treatment choices.” 

For more information about DirectPath’s services, visit www.directpathhealth.com. 

Participants January 10, 2017

TDFs Keep Participant Trading Steady in 2016

While there was some reaction to major events in 2016, 401(k) participants mostly stayed the course in their investments.
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In 2016, world events including Brexit and the U.S. elections drove spikes in 401(k) trading followed by long lulls in activity, according to the Aon Hewitt 401(k) Index.

There were 28 days of above-normal trading activity in 2016, slightly less than the past five and 10-year averages (32 and 35 days, respectively). Nearly one-third of the higher-than normal trading days for the year occurred in the weeks leading up to the U.S. Presidential election. 

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A net total of 2.13% of balances traded in 2016, slightly higher than the trailing five year average (2.02%). The percentage of assets in target-date funds (TDFs)  rose to 24.1% in 2016, up from 23.1% in 2015.

The percentage of assets in company stock continued to decline. Company stock represented 8.7% of total 401(k) assets, down from 9.5% in 2015. After reflecting market movement, contributions and trades, the percentage of balances in equities (65.4%) and fixed income (34.6%) at the end of 2016 remained unchanged from year-end 2015.

“The rise of assets in target-date funds accounts for some of the light-trading in 401(k)s we saw in 2016,” explains Rob Austin, director of retirement research at Aon Hewitt. “While we did see some reaction by 401(k) inve,stors to major events in 2016, it was more measured than what we have seen in prior years. By and large, investors stayed the course and kept their eye on their long-term investment goals.”

NEXT: December trades favored equities

December was a light trading month for investors in defined contribution plans according to the Aon Hewitt 401(k) Index—a sharp contrast to November, which saw the highest trading activity in over three years. There were zero above-normal trading days in December. On average, 0.017% of balances traded each day, and when participants made trades, they favored equities over fixed income funds.

Small U.S. equity funds saw $130 million in inflows in December, followed by Large U.S. equity funds ($102 million) and Mid U.S. equity funds ($71 million). Company stock funds saw the most outflows during the month, at $163 million. Bond funds posted outflows of $114 million, while Stable Value funds posted outflows of $49 million.

After combining contributions, trades, and market activity in participants’ accounts, the percentage of balances in equities was 65.4% at the end of December, up from 65.0% at the end of November. New contributions continue to favor stocks, but at a lower rate than in the past. In December, 65.2% of employee contributions were into equities—a decrease from 65.7% in November.

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