Benefits February 25, 2004

Study: DC Web Sites Still Not Up to Snuff

February 25, 2004 (PLANSPONSOR.com) - While defined contribution plan Web sites are adequately meeting basic information needs, many sites are still limited by low usability and suffer a lack of compelling educational materials and disappointing email offerings, according to a study.
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According to the study, Defined Contribution Web Site Trends and Best Practices, only 30% of plan sponsor and 36% of plan participant sites include such basic features as a site map or search engine. Just under half (48%) of the sponsor sites boasted educational sections. For the study, more than 45 web sites were evaluated based on: Branding, Content, Online Services, Usability, and Web Technology.

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While nine out of ten participant sites include educational sections, they can be difficult to use, contributing to the low level of participant usage, according to kasina, a financial services industry consulting firm. Only 4% of the industry provide sponsors with more advanced Web-based communication tools such as e-mail subscriptions (33% for participants).

“The study shows that plan providers need to find better ways to integrate e-business initiatives with their overall business goals,” asserted Derek Evans, Senior Consultant at kasina. “Too often the Web is viewed as simply a place to post account data. Instead, it should be seen as a dynamic tool that can increase plan participation and deferral rates, help investors achieve proper diversification, and support the sponsor’s efforts to fulfill its fiduciary responsibilities.”

The kasina report recommends that providers expand plan sponsor sites to include more interactive reporting capabilities, as well as features that help sponsors manage aspects of their plan. On the participant side, the study notes that many sites lack compelling and integrated educational content, while 27% of providers reviewed fail to clearly indicate that the site is dedicated to defined contribution plans.

Benefits February 24, 2004

MI, VT Drug Partnership Squashed by Washington

February 24, 2004 (PLANSPONSOR.com) - It looks like the Detroit Tigers have a better chance of going to the World Series in 2004 than Michigan and Vermont's program to jointly negotiate lower prescription drug prices from pharmaceutical companies has of being approved by Washington.
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Michigan Governor Jennifer Granholm said she was informed late last week that the Centers for Medicare and Medicaid Services was rejecting the program as a violation of federal procurement procedures. This came as a shock to the Democratic governor currently attending the National Governors Association meeting in Washington, who expected more support from a Bush administration that encouraged states to cut drug costs, according to an Associated Press report.

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“We are just enormously frustrated at the lack of partnership Washington has been providing,” Granholm told the Associated Press. Overall, Michigan spends $600 million a year on Medicaid prescriptions.

Under the partnership, the states were given a rebate on prescription drug purchases of about 5% that was on top of the roughly 20% discount manufacturers provide to Medicaid programs. Michigan estimates savings on drug costs reached about $40 million in 2003, including $8 million from multistate bargaining. Yet with the uncertainty surrounding Washington’s disapproval, neither Michigan nor Vermont officials know whether they will be allowed to collect on the discounts they’re owed if the program should end.

Word of the apparent rejection of the joint programs was news toMary Kahn, a spokeswoman for the federal agency. Kahn said that as of yet, there had been no official response and that the program was still under review.

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