HighRoads Study Shows Less than Half of Employers Are Ready to Distribute Health Care Reform Summary of Benefits & Coverage Materials

BOSTON (February 7, 2012) —HighRoads, the industry leader in employer health care compliance and benefits management, today announced findings from its annual survey of U.S. companies and their current and future compliance communication plans and processes, focusing on Summary Plan Descriptions (SPDs). Key findings show that while 81% of employers plan to update their SPDs for plan design and Affordable Care Act (ACA) changes this year, they continue to wrestle with cost containment and resource strain for the implementation and review process required to execute SPD changes.

“Cost containment was clearly top of mind for our respondents this year,” said Kim Buckey, SPD Practice Lead, HighRoads. “Employers are taking steps to reduce both the hard and ‘soft’ costs of producing SPDs even if they don’t have a handle on how much they’re actually spending.  It is clear that those responsible for SPD costs have been given a mandate to reduce spend. Given the anticipated expense of producing the ACA required Summary of Benefits and Coverage (final regulations are expected to be released Friday, April 13) and other ERISA and ACA-related communications, this is no surprise,” she added.

The study results show that more than 60% of respondents don’t know their average spend per participant to create, store and distribute SPDs (30% estimate they are spending between $10 and $20).  Other highlights from the third annual survey include:Employers are recognizing that SPDs serve as a valuable source of information for employees.

– Less than half of respondents expect to be ready to distribute Summaries of Benefits and Coverage (SBCs) by the end of March, the deadline for initial SBC production at the time of the survey.

– The number of employers using electronic distribution (either email, posting to a portal or intranet, or CD) continues to hover around 81%.

– As employers continue to search for alternatives to print distribution, posting to a portal (with a note that a paper copy was available on request) was the preferred method, with 88% of respondents reporting that they took this approach for active non-union employees.

“With the increased communications requirements of ACA and the DOL’s fee disclosure rules, employers need to take steps to reduce costs in every area.  This means producing fewer documents, designing simpler documents, and utilizing technology to reduce the costs of managing, maintaining, and distributing content,” said David O’Connell, Principal Analyst, Nucleus Research.  Mr. O’Connell went on to say, “Through increased automation, companies can achieve and document their compliance while also reducing costs.”

“The ACA places an increased focus on the importance of accurate, timely and easy to read communication documents,” said Thomas Barker, Partner, Foley Hoag LLP and former General Counsel at the United States Department of Health and Human Services. “All employers both large and small need to build in protective processes to assure that they are ready to comply with new and changing requirements as the policies for ACA continue to become available.”

“New policies have been put into motion to increase the enforcement of ERISA compliance,” said Mary B. Andersen, CEBS, Founder, ERISAdiagnostics, Inc. “No company is immune to the guidelines and as a result every employer needs to ensure that it has the resources and processes in place to efficiently manage the SPD process to avoid costly penalties and even law suits.”

Mid- to large-sized employers throughout the United States, representing approximately 2.2 million total plan participants responded to the HighRoads Third Annual SPD Survey. These companies were asked specific questions pertaining to electronic communications of plan information, the Affordable Care Act (ACA) and other required, time-sensitive communications and their processes for timely production and distribution of their SPDs. Companies responding to the survey include but not limited to: United Technologies Corporation, Ferro Corporation, Compass Minerals, Bodycote Thermal Processing, Carlson Worldwide, Arch Coal, Temple-Inland, DISH Network, The Toro Company, Ericsson, Inc., Applied Materials, Dick’s Sporting Goods, and Broward Health.

Download a PDF version of the report here http://www.highroads.com/resources/

About HighRoads
The world’s leading employers choose HighRoads to gain complete control over their health care costs and compliance.  With HighRoads’ service, employers have online access to benefits plan information and pricing, competitive benefits benchmarks, and complete benefits management.  The privately-held company is headquartered in Woburn, MA. For more information, visit www.HighRoads.com.