Brittany Huerta, a registered health underwriter (RHU), and registered employee benefits consultant (REBC), has worked for Maniaci Insurance Services for 13 years. Her clients are in the fuel convenience store industry as gas stations and automotive oil changes.
She presents on Day 2 of iFLEX, but NOLN set up this Q and A as an introduction.
NOLN: What is the Consolidated Appropriations Act, or CAA?
Huerta: CAA, the majority of this law took effect at the beginning of this year, Jan. 1, 2022, and it’s a game-changer in the employee benefit space. It's comprehensive and pervasive and impacts all aspects of employee benefit plans and their management.
How did the CAA come into being?
Huerta: Historically there have been many challenges with transparency in health care, and the spirit of the law is inherently good, and I agree with it, because there’s been too much activity behind the scenes in the healthcare industry. So CAA was set forth to help put employers in more control of their healthcare and enforce providers and insurance companies from implementing hidden contracting terms that would have negative impacts on them and their employees. So, not allowing for a doctor, hospital, or insurance company to price fix. The goal of CAA is that it will allow employees to make more informed decisions on their healthcare.
And well, that’s great, but not all the transparency is completely necessary. The nuances of CAA place an overwhelming number of requirements on the employer to verify their specific benefit programs to maintain compliance.
Why should employers have an understanding of CAA?
Huerta: Over 15 years ago, the retirement 401K industry went through similar changes of law requiring transparency and there were many lawsuits that employers faced that resulted in settlements and legal fees exceeding billions of dollars. We fast forward to today, and we have the passage of CAA with similar transparency requirements that impact every single business owner who provides benefits to their employees, and the breach of these fiduciary duties or failure to comply with CAA will subject the employer to litigation by their employees and their beneficiaries, meaning their family members.
Exposure is just not limited to the business owner–the lawsuit can name individual people in your organization, like human resources personnel for not performing their fiduciary duties. It’s very serious.
So the main area of concern for employers will be an abundance of reporting and documentation requirements. The biggest and most serious requirement is a procurement process, this is huge. This is going to be placed on the employer and they are required to publish and document their procurement process to their employees acknowledging that they’ve done their due diligence on collecting and offering cost-effective and high-quality insurance plans that meet the plan’s certain coverage requirements.
And then, the employer must communicate in detail to their employees how the benefit program was developed. Everything has to be documented and published to their employees on why they did all of it … You can see this places a serious burden on the employer.
What should attendees to your session expect, are they walking away fully understanding CAA or is it a starting point?
The biggest take-aways are going to be having an understanding of the law, how to address CAA with timelines and action items for the next three years, and how to address these new compliance challenges and fiduciary duties obligated by CAA. I will be providing them with all of those items and I hope attendees walk away knowing that this law is serious business and it needs to be addressed immediately, which is why AOCA hired our firm to assist their membership with creating a procurement process, because that’s the most important aspect of the law.
