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

The council says the employee benefits field has become wellknown for excessive administration burdens, and this perceptionhas undermined the voluntary employer-maintained benefit plansystem.

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

The group goes on to emphasize that American workerssubsequently take on adverse effects of excessiveadministration burdens, as plan participants bear those coststo comply, along with plan sponsors.

The letter is in response to a requirement that HHS must solicitcomments following interim regulation. As mandated under ExecutiveOrder Executive Order 13563, the Department of Health and HumanServices is required to seek comment that will help with its reviewof existing regulations. The aim is to guide the federal departmentshould it need to modify, or even repeal regulations, and to makethe regulatory process less burdensome.

The American Benefits Council concedes it’s necessary to issueprompt guidance when it comes to new laws, but the time factorshould not override the need to have guidance that is clear –which provisions under the health reform law are not, theyargue. What’s more, any subsequent efforts to explain or amendfinal interim regulations have made compliance adherence even morecomplicated.

“In an effort to alleviate uncertainty, the Department has nowissued three separate Technical Releases (Technical Releases2010-01, 2010-02, and 2011-01) in its attempt to explain the properimplementation of this interim final regulation and ensure thatparties 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 finalregulations. As a result of this series of guidance, a plan orissuer attempting to comply with the PPACA interim appeals andexternal 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 finalregulations.

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

The council goes on to highlight inconsistencies, and points tofederal rules regarding wellness programs: “The Department, theDepartment of Labor and the Internal Revenue Service have allissued guidance allowing for wellness programs under the HIPAAnondiscrimination rules,” the council states. “Per PPACA, whichcodified the HIPAA wellness rules and provided for some importantexpansions thereof, Congress has expressly indicated its supportfor wellness programs. Notwithstanding, the Equal EmploymentOpportunity Commission (EEOC) continues to create uncertainty forplans and issuers by questioning the validity of certain incentiveor award programs that otherwise comply with HIPAA and GINA.

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

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

Overall, the council urges HHS to step back and consider theadministrative burdens of compliance. "As the pace of legislationaffecting plans has accelerated, it is inevitable that new ruleswill have both intended and unintended consequences," the councilstates. "Regulations should be crafted with an eye toeffecting legislative intent while limiting and mitigating theunintended consequences and burdens for plan administration."

Employers have recently voicedconcern that they're not keeping employees up tospeed on what's changing with health care programs post-PPACA;A HighRoadsstudy found while 88 percent of employers reported that theyhad increased their employee communications to address health carereform, many were still worried that the communications might nothave been enough.

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