Over the last two years, a compliance tidal wave has loomed over employers and their benefit advisors. The crest of this massive wave has begun to touch down upon fiduciaries of employer groups, most notably in the recent class action lawsuit against Johnson & Johnson. But what Rules and Acts led to this surge of compliance obligations, and how can benefit advisors stay dry?

2020: The year the compliance wave took shape

Four key dates have shaped the employer-sponsored health insurance (ESHI) space over the last 80 years. First was ESHI's introduction in 1943, when the IRS issued a private ruling holding that employer-provided health insurance benefits were not subject to federal income taxation. Second, in 1974, the Employee Retirement Income Security Act (ERISA) was passed, which provided necessary protection for plan participants. Fast forward to 2010, the enactment of the Affordable Care Act and the pursuit to provide health insurance access for all. Finally, in 2020, when the Transparency in Coverage Rule and Consolidated Appropriations Act of 2021 were published and passed, two main factors contributed to the current compliance tidal wave's growth and reach. 

These two executive and legislative efforts could have an even greater impact on employers and benefit advisors than the ACA. The Consolidated Appropriations Act of 2021 includes key provisions like the No Surprises Act, the prohibition of gag clauses between employers and health plans, and the required disclosure of direct and indirect compensation to benefit advisors. Each element of the Act requires active engagement from employer fiduciaries responsible for overseeing health care spending. Notably, the CAA of 2021 also includes a requirement that employees have access to a cost-comparison shopping tool.