In several “Star Trek” series, an alien villain known as the Borg travels the galaxy, assimilating creatures from all walks of life into its space-borne collective. Serious fans know that it's almost impossible to escape the Borg and its nefarious designs. The Borg's catchphrase, “resistance is futile,” has since been assimilated into the lexicon.
When it comes to the matter of compliance, benefits professionals across the nation must be feeling exactly like those brave men and women from Federation starships who had the misfortune of coming across the Borg. From the Affordable Care Act to ERISA to the EEOC to a number of other alphabet-soup agencies and regulatory bodies, 2017 is shaping up to be the year of compliance.
Brokers and agents simply need to accept it.
For most benefits professionals, the ACA will dominate compliance issues that are top of mind. The ACA, at least for the time being, is still the law of the land. While House Republicans tried earlier this year to repeal and replace the ACA with the American Health Care Act (AHCA), they came up short thanks to internal disagreements. After the initial failure, they redoubled their efforts and passed the American Health Care Act. The AHCA will now head towards the Senate, where its future is impossible to predict.
While the political wrangling makes for an uncertain compliance environment, brokers and agents should keep their clients in compliance with the ACA.
“No matter what you predict, it will not happen that way,” says David Contorno of the Hilb Group's Lake Norman Benefits in Mooresville, North Carolina. “We have a set of rules and we operate within those rules—that's our obligation to clients. That's our job. Our job is not to predict what will happen, it's to help advise our clients on their options and what they should be doing at the end of the day.”
In 2017, industry sources say benefits professionals should also be ready for the IRS. Everyone's favorite tax collection agency will start checking to make sure employers offered health insurance to their employees and that the packages met ACA requirements. Brokers and agents may have been lulled into thinking the regulations weren't going to be enforced over the past couple of years, but the IRS is ready to start penalizing non-compliant employers after acting leniently during the ACA implementation.
“The IRS just released some information about how they’re going to be pursuing penalties now,” says Arthur Tacchino, chief innovation officer at SyncStream Solutions, an ACA reporting and compliance company. “They’ve had a lot of problems with the reporting but they’ve worked through that and as intended all along, they’re going to start issuing penalties for non-compliance.”
Another hot compliance topic in the benefits world is known simply as the “fiduciary rule”—an Obama-era law that changed ERISA's definition of an “investment advice fiduciary.” Basically, brokers and agents professionals who work with retirement plans or offer financial advice would be treated as a fiduciary under ERISA, which mean that they would be held to the same legal and ethical standards. Brokers and agents working on commission would be affected most by the change.
Some brokers and agents see the need for the rule. Others think the rule will only drive up costs. The Trump administration asked for a delay in implementation, but again, it's a scenario where brokers and agents should be prepared to comply with the law.
“I don't sell a product because I know I’m getting a bonus,” says Joni Reents, president of the Reents Insurance Agency in Broomfield, Colorado, and president of the Colorado State Association of Health Underwriters. “I feel like I’d lose a client if I steered them one way when another product will work better for them. I know there are some people who do that, but the rule does make our jobs a little more complicated.”
Another compliance issue facing some benefits professionals comes courtesy of the EEOC. In 2016, the commission began requiring employers to report more demographic data in order to fight pay discrimination and identify industries where the issue runs rampant. That means there will be more to report in a company's Employer Information Report, or EEO-1 statement. The rule mainly affects employers with 100 or more employers.
“It's very hard to know how to plan for the future, because we have no idea what's going to change,” Reents says. “It's just kind of in a state of limbo. We stick with what we’ve been doing—ACA is the law of the land—but you’re also supposed to plan for down the road, and that's a little difficult to do right now.”
And the compliance issues don't end there. Reents’ client roster, for example, is dominated by employers of less than 100. She says she often gets questions about COBRA from clients. The tax code is also likely to change in some way. And no one knows what will come from Trump's next executive orders.
Simply put, there's a lot to keep up with.
In order to survive and thrive, brokers and agents have to employ several strategies for their clients, industry sources say. There probably hasn't been a more critical time to keep up with the compliance news and changes in the industry, even if they’re happening fast. Mainstream media sources are all over issues such as ACA, but keep tabs on other sources such as Healthcare.gov, the Department of Labor, and NAHU for the latest information.
“If I’m an advisor, I’m taking the proactive route and educating myself on what's happening so when the bill gets finalized, you know what's in it,” Tacchino says. “There are lots of news organizations and professionals covering it. For brokers and agents, the more they can do for employers, the more it enhances the value they offer.”
Another important strategy is to make sure to document compliance. Plenty of companies out there provide ACA reporting programs, and many industry professionals recommend using them. Some even say that it should become a cost of doing business.
In the final analysis, ACA compliance and other compliance-related issues may be the biggest factor contributing to a fundamental shift in the way brokers and agents perform their jobs. The days of simply selling products and going over options with clients on spreadsheets is over.
Now, benefits professionals are more likely seen as advisers or consultants.
“I think the whole thing has gone into a consultative period with brokers,” says Vic Troncalli of Troncalli Insurance Solutions in Villa Rica, Georgia. “I have a brokerage, I have every known license—I work to pay for licenses—but I’ve always worked it like a consultant. You sell a product, but when you’re dealing with financial products or insurance, you find a solution for the risk factor and then you fix it.”
“Some brokers and agents have evolved with the role voluntarily and shifted their model,” Tacchino says. “And there are some being dragged into that role. It's more important now more than ever. It's going to be chaotic for employers to know what they need to do. And as an advisor, you’re going to be more important than ever.”