New GAO Report Finds There is Still Much to be Done for State-Based Exchanges

The Centers for Medicare & Medicaid Services (CMS) are schedule to operate a health insurance exchange in the 34 states that are not setting up their own exchanges. CMS has indicated that it will carry out additional exchange functions for states are not ready. The Government Accountability Office (GAO) has found that: “CMS completed many activities necessary to establish FFEs by October 1, 2013, although many remain to be completed and some were behind schedule. CMS issued numerous regulations and guidance and took steps to establish processes and data systems necessary to operate the exchanges. The activities remaining cross the core exchange functional areas of eligibility and enrollment, plan management, and consumer assistance.”

The report also indicated that while a lot of work has been done, there is still a lot left. GAO stated “Much progress has been made, but much remains to be accomplished within a relatively short amount of time. CMS's timelines provide a roadmap to completion; however, factors such as the still-evolving scope of CMS's required activities in each state and the many activities yet to be performed--some close to the start of enrollment--suggest a potential for challenges going forward. And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so. CMS recently completed risk assessments and plans for mitigating risks associated with the data hub, and is also working on strategies to address state preparedness contingencies. Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined.”

A copy of the GAO report is available here.

New GAO Report Says Government Agencies Could Improve Rollover Process

The Government Accountability Office (GAO) has issued a report to Congress about the rollover process for 401(k) plans. The GAO states that around 95% of money contributed to individual retirement accounts (IRAs) in 2008 came from rollovers and were primarily from employer-sponsored retirement plans.

The GAO reported that the current rollover process discourages participants from rolling their funds into other retirement plans – and instead favors rollovers into IRAs. They stated that this may result from:
Plans including waiting periods before processing employees’ requests for rollovers.
The processing time for a rollover to a plan frequently takes longer than for an IRA. The procedures used by plans to verify the tax-qualified status of the funds to be rolled over can be long and complex.
Employees often receive less help when rolling their assets to another plan than to an IRA. Furthermore, they may not receive unbiased information about rolling their funds into another plan compared to an IRA.
The wide variety of distribution forms used by plans may be confusing for participants. Additionally, information regarding distribution options may be complex.

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A copy of the GAO report is available here.