Compliance October 2, 2007

House Panel Sets Hearing on Miller 401(k) Fee Disclosure Measure

October 2, 2007 (PLANSPONSOR.com) - The U.S. House Education and Labor Committee will hold a hearing on Thursday to discuss a proposal requiring greater 401(k) fee disclosure by plan sponsors and providers.
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The 401(k) Fair Disclosure for Retirement Security Act of 2007 was proposed by Representative George Miller (D-California), the committee’s chairman, in July (See  Representative Miller Introduces Fee Disclosure Legislation ). At a committee meeting in March, Miller said thatworkers are “simply not in a position to compare plans” and that improving “401(k) transparency is just the beginning of our efforts to ensure that all American have access to a secure retirement.”

Pension industry groups soon weighed in, most of which criticized Miller’s plan as burdensome on plan sponsors with too little real benefit to plan participants, some even arguing that too much disclosure could actually thwart retirement savings efforts (See Retirement Groups Weigh in on Miller Fee Disclosure Proposal ).   

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A SPARK Institute analysis  most recently suggested that fee information is arguably not the most important point participants should consider when they are making investment decisions and also suggested that an over-emphasis on fees and expenses could actually lead to poor investment decisions (SeeSPARK: Fee Disclosure Proposal Too Burdensome).

Some also made arguments that fee disclosure was the job of the Department of Labor or the Securities and Exchange Commission (See   DoL Asks For Advice on 401(k) Fee Disclosures ,  SEC Turning its Attention to 12b-1, 401(k) Disclosures).

Benefits October 1, 2007

Survey Shows CDHP Enrollees More Actively Manage Health and Expenses

October 1, 2007 (PLANSPONSOR.com) - A new survey from the Blue Cross and Blue Shield Association (BCBSA) indicates employees enrolled in consumer directed health plans (CDHPs) are more engaged in wellness programs and are more likely to plan and save for health care expenses than those in traditional health care coverage.
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In a press release on the survey findings, BCBSA said its 2007 CDHP Member Experience Survey found consumers eligible for health savings accounts (HSAs) were 17% more likely to participate in an exercise program than those enrolled in non-CDHP products. In addition, they were also more likely to engage in the following wellness programs: smoking cessation (20% vs. 6%), stress management (22% vs. 8%), and nutrition and diet programs (27% vs. 12%).

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Sixty-three percent of CDHP consumers surveyed tracked their health care expenses and 47% said they are currently saving for future health expenses, according to the press release. Only 43% of non-CDHP consumers said they track health care expenses and only 18% are said they are saving for their future health care expenditures.

Survey findings also indicated CDHP consumers are more likely to seek information about insurance as well as about provider (doctor and hospital) costs and quality. Consumers enrolled or eligible for an HSA reported they are not forgoing care more often than consumers that receive traditional health care coverage.

The CDHP Member Experience Survey was conducted by Knowledge Networks for BCBSA in August 2007 among 3,000 consumers enrolled in Blue Cross and Blue Shield CDHPs, non-Blue CDHPs, and non-CDHP health plans. CDHP participants are defined as consumers enrolled in HSA-eligible health plans.

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