The American Benefits Council wrote a letter Thursday that urges the Department of Health and Human Services to scale back a complex regulatory regime that has “grown exponentially” in recent years.

The council says the employee benefits field has become well known for excessive administration burdens, and this perception has undermined the voluntary employer-maintained benefit plan system.

The council wants the federal department to take steps to simplify and minimize any administrative burden that the new health reform law, especially, imposes.

The group goes on to emphasize that American workers subsequently take on adverse effects of excessive administration burdens, as plan participants bear those costs to comply, along with plan sponsors.

The letter is in response to a requirement that HHS must solicit comments following interim regulation. As mandated under Executive Order Executive Order 13563, the Department of Health and Human Services is required to seek comment that will help with its review of existing regulations. The aim is to guide the federal department should it need to modify, or even repeal regulations, and to make the regulatory process less burdensome.

The American Benefits Council concedes it’s necessary to issue prompt guidance when it comes to new laws, but the time factor should not override the need to have guidance that is clear – which provisions under the health reform law are not, they argue. What’s more, any subsequent efforts to explain or amend final interim regulations have made compliance adherence even more complicated.

“In an effort to alleviate uncertainty, the Department has now issued three separate Technical Releases (Technical Releases 2010-01, 2010-02, and 2011-01) in its attempt to explain the proper implementation of this interim final regulation and ensure that parties have sufficient time to comply,” writes Kathryn Wilber, senior counsel, health policy for the American Benefits Council. “The Department has also promised an amendment to the interim final regulations. As a result of this series of guidance, a plan or issuer attempting to comply with the PPACA interim appeals and external review provisions must now trace their obligations through (1) the interim final regulations, (2) Technical Release 2010-01, (3) Technical 3 Release 2010-02, (4) Technical Release 2011-01, and (5) once issued, the amendment to the interim final regulations.

“Any benefit gained by the Department’s prompt issuance of the interim final regulations has, no doubt, been vitiated by the confusing and complicated nature of the subsequent guidance.”

The council goes on to highlight inconsistencies, and points to federal rules regarding wellness programs: “The Department, the Department of Labor and the Internal Revenue Service have all issued guidance allowing for wellness programs under the HIPAA nondiscrimination rules,” the council states. “Per PPACA, which codified the HIPAA wellness rules and provided for some important expansions thereof, Congress has expressly indicated its support for wellness programs. Notwithstanding, the Equal Employment Opportunity Commission (EEOC) continues to create uncertainty for plans and issuers by questioning the validity of certain incentive or award programs that otherwise comply with HIPAA and GINA.

“Until all of the relevant agencies are able to come together and speak with one consistent voice regarding wellness programs, including those with incentive or reward components, employers and issuers are unlikely to embrace wellness programs to their fullest potential.”

Not only are regulations confusing and inconsistent, the group argues, but many have unrealistic effective dates. "Legislation may, for example, have an effective date that is earlier than it is possible for the Department to issue interpretive guidance. Thus, plans are often put in the position of having to comply with unclear or ambiguous rules. Moreover, employers typically have a range of options from which to choose and therefore must analyze, price, seek approval, negotiate with the unions, communicate with employees, implement with service providers and amend plans in order to satisfy these law changes. These steps take time, particularly for large employers"

Overall, the council urges HHS to step back and consider the administrative burdens of compliance. "As the pace of legislation affecting plans has accelerated, it is inevitable that new rules will have both intended and unintended consequences," the council states. "Regulations should be crafted with an eye to effecting legislative intent while limiting and mitigating the unintended consequences and burdens for plan administration."

Employers have recently voiced concern that they're not keeping employees up to speed on what's changing with health care programs post-PPACA; A HighRoads study found while 88 percent of employers reported that they had increased their employee communications to address health care reform, many were still worried that the communications might not have been enough.

The biggest communication concern was a lack of federal guidance on what the requirements are or how any changes in guidance during the year might change what has been communicated to employees.

Instant Insights /

Benefits council urges HHS to tone down compliance burdens

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