Health and Human Services (HHS), Department of Labor (DOL), Internal Revenue Service (IRL) and the Plan Sponsor

The role of HHS with the Affordable Care Act (ACA) is really interesting. They are the driving force of all of the regulatory agencies. There are a lot of them. There are HHS, the IRS, the Department of Labor, the Employee Benefits Security Administration, which is a division of the DOL, the state insurance commissioners as well as the state regulatory authorities. HHS is the mother ship. It is where the ACA rules are being released. Directives are coming from HHS. They are involved with some enforcement activity, but not as much as the IRS and some of the other agencies. It is interesting that there are so many competing agencies with overlap between them. For example, there were some directives issued in terms of final rules on a specific part of ACA, and HHS, the IRS and another agency all released the rules. So, they are kind of all over each other with regard to releasing final guidance to employers on how to comply with ACA. However, all the regulation basically spawns from HHS. It is like the mother seed of ACA.

Compliance, relative to the regulatory agencies, is a very interesting question with ACA because a number of these agencies such as the Department of Labor, HHS and the IRS are starting to set out their enforcement mechanisms. There are are 16,000 new IRS agents. They will be involved at the employer level as well as with making sure all individuals have health care plans and that people are compliant. The way for plan sponsors to be prepared for an audit from any of the regulatory agencies is to make sure plan documents are up-to-date and ensure compliance in terms of minimal value affordability. It is important to have up-to-date summary plan descriptions so that when a regulatory person walks in the door the employer can hand over current documents that show thoughtful planning with regard to compliance. If there is no smoke, there is no fire, so the auditor can be on his or her way after it is established that there are no violations.