Preview of December Compliance Guide: Year in Review

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2017 has been a year of surprises, confusion, and about-faces with regard to employer-sponsored benefits. Executive Orders seeking fewer regulations crossed paths with new regulations. Promised guidance continued to remain promised throughout the year. All of these challenges – and many others – impacted employers as they sought to take the correct steps toward compliance.

In spite of these challenges, if you are committed to becoming a destination employer, you must keep pace with evolving legislative and regulatory initiatives that may pose risks to meeting cost targets, developing strategic benefits and compensation programs, and attracting and retaining top talent. As a trusted advisor, Gallagher will help you navigate the ever-changing landscape of employee benefits compliance issues. Check out our overview of happenings during 2017 that promise to keep employers on their toes in 2018 and beyond.

1. Ready, set, wait (or stop) for action based on regulatory guidance or court decisions. 

In the past, Congress passed a law, regulators wrote regulations, and plans took steps to comply. But 2017 was different – it was a year of change – not just for new regulations, but also for delaying or even stopping requirements. The Department of Labor (“DOL”) decided to delay regulations for disability claims until April of 2018, the Department of Health and Human Services (“HHS”) withdrew a requirement for certain health plans to certify compliance with a HIPAA electronic transaction rule, and a district court judge ordered the Equal Employment Opportunity Commission to review their 2016 wellness regulations under the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”). These actions may cause employers to feel as if there were caught in a traffic jam. Will you be ready when the delays are over and it is time to take steps to comply?

2. Keep your eye on HIPAA: When one HIPAA regulation fails to launch, another is thrust into overdrive. In January 2014, HHS issued a proposed regulation titled, “Administrative Simplification: Certification of Compliance for Health Plans,” that would have required certain health plans to submit documentation demonstrating compliance with certain electronic transaction rules under HIPAA. However, in October 2017, HHS announced that it was withdrawing the proposed regulations in light of issues that were raised in the public comment process. Even though one HIPAA compliance initiative was put on the backburner, another has hit the afterburners. HHS enforcement of the HIPAA Privacy, Security, and Breach Notification Rules is moving forward full throttle through both an audit program and the compliance resolution process. In fact, HHS has announced its intention to begin additional audits, which are likely to include on-site audits, in early 2018. So, while one part of the HIPAA Privacy and Security requirements has stepped back, another is moving forward. Is your organization in compliance with the HIPAA Privacy, Security, and Breach Notification requirements in the event of an audit?

3. Be aware of important regulations still “missing in action.” Although regulators have continued to issue guidance in a number of areas such as the Patient Protection and Affordable Care Act (“PPACA”) and the Mental Health Parity and Addiction Equity Act (“MHPAEA”), there are still some important requirements that do not yet have specific guidance. For example, we’ve been waiting for several years for final cafeteria plan regulations, and we’re also waiting to receive guidance on simple cafeteria plans. Further, HHS continues to promise to release guidance under the HIPAA Privacy minimum necessary standard and accounting for disclosures, but that guidance remains outstanding. No guidance has been provided for PPACA’s Quality of Care Reporting, nondiscrimination rules for non-grandfathered fully insured health plans, or certain areas for counting hours. And while the “Cadillac Plan” tax is not effective until 2020, the only guidance so far are two IRS Requests for Information in 2015. Since these are not new requirements, regulators may begin issuing guidance at any time. If guidance is issued in the near future, will you be able to digest the new rules and make any needed adjustments in a timely manner?

4. Stay tuned for further announcements on the delayed repeal and replace efforts. While many predicted the swift demise of PPACA after the Republican Party regained the Presidency and also retained the majority in both chambers of Congress in November of 2016, reality has failed to meet those expectations. After months of drafting legislation, on May 4, the House of Representatives passed the American Health Care Act by a narrow margin (217 to 213). However, the Senate failed to pass any of the four repeal and replace bills put forth for a vote. For the remainder of 2017 and the early parts of 2018, it is expected that Congress will turn its attention to tax reform and other matters. Sometime in 2018, it is reasonable to assume that one or more repeal and replace bills may be put forth for a vote. Are you following the repeal and replace efforts in order to understand how the possible outcomes may affect your business?

5. Add the potential impact of the Administration’s Executive Orders into your planning itinerary. While passing legislation related to repealing and replacing PPACA has proven difficult, the Administration has been busy issuing Executive Orders to introduce new healthcare reforms. For instance, on October 12th, President Trump signed an Executive Order that directed the Secretary of Labor to consider expanding access to Association Health Plans, which could potentially allow groups of small businesses to pool together to buy health insurance. The ultimate impact of the Executive Order will depend on any new regulations written as a result of the order, but overall, the Administration seeks to make less expensive plans available to small employers. Administration officials said they didn’t expect any new regulations to be implemented before the end of 2017. Does your benefits itinerary for 2018 include options made available as a result of the President’s Executive Orders?

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Compliance is a journey, not a destination. As a trusted advisor, Arthur J. Gallagher & Co. has developed this Compliance Guide series to help you map a path through employee benefits compliance issues as part of an overall compliance plan. Employers should carefully evaluate their health and welfare plans to determine if they are in compliance with both federal and state law. If you have any questions about one or more of the compliance destinations listed above, or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits in order to support employers in their compliance efforts, please contact your Gallagher Benefit Services representative. This is a preview of the December issue of the Compliance Guide. If you would like the full version of the Compliance Guide or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits and supports employers in their compliance efforts, please contact your Gallagher Benefit Services representative or click here to Contact Us via ajg.com.

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The intent of this analysis is to provide you with general information. It does not necessarily fully address all your organization’s specific issues. It should not be construed as, nor is it intended to provide, legal advice. Questions regarding specific issues should be addressed by your organization’s general counsel or an attorney who specializes in this practice area.