Republican health care bill would increase number of uninsured, maintain stability in individual market, Congressional Budget Office projects

The nonpartisan Congressional Budget Office (CBO) late Monday, March 13, 2017, released its analysis projecting that enactment of the American Health Care Act (AHCA) would increase the number of uninsured Americans by 4 million in 2017, rising to an increase of 14 million by 2018 and to 24 million by 2026.1 Under the AHCA, the total number of uninsured would stand at 52 million in 2026, approximately 19% of the US population under age 65. By comparison, approximately 10% of nonelderly Americans currently are uninsured, and the CBO projects that the uninsured population in the US would remain about that level each year through 2026 under the Affordable Care Act (ACA).

According to the CBO, the nongroup health insurance market “would probably be stable in most areas” under either the ACA or the AHCA.
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House begins consideration of legislation to repeal and replace key provisions of the Affordable Care Act

The House Ways and Means Committee and the House Energy and Commerce Committee today (Wednesday, March 8, 2017) are scheduled to begin marking up the American Health Care Act (AHCA), which would repeal and replace certain provisions of the Affordable Care Act (ACA). House Ways and Means Committee Chairman Kevin Brady (R-TX) and House Energy and Commerce Committee Chairman Greg Walden (R-OR) released the draft legislation late Monday, March 6, 2017.

The House Ways and Means Committee has jurisdiction over tax provisions in the legislation, while the House Energy and Commerce Committee has jurisdiction over provisions related to Medicaid.

In general, the draft legislation would maintain the ACA’s tax credits and states’ option to expand Medicaid in their current forms through December 31, 2019. Under the AHCA, new tax credits and Medicaid funding formulas would take effect beginning January 1, 2020.

The draft legislation in its current form would not make changes to the individual tax exclusion for employer-sponsored coverage, or certain ACA health insurance market reforms, including allowing adult children up to age 26 to stay on a parent’s health coverage and a prohibition on denying coverage or rate setting based on an individual’s pre-existing health conditions.

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Department of Labor issues proposal to delay Fiduciary Rule

On Thursday, March 2, 2017, the Department of Labor published a proposal that would delay the Fiduciary Rule by 60 days; comments will be accepted until March 17, 2017

Introduction

On February 3, 2017, President Donald J. Trump issued a memorandum (the “Presidential Memorandum”) directing the Department of Labor (DOL) to examine its “Conflict of Interest Rule” on fiduciary investment advice (the “Rule”) and related prohibited transaction exemptions (PTEs) to “determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”1 The Presidential Memorandum also raised concerns that the Rule “may not be consistent with the policies of [the] Administration.”

The Presidential Memorandum did not directly delay or order a delay in the Rule’s initial April 10, 2017 applicability date, but directed the DOL to prepare an “updated economic and legal analysis concerning the likely impact” of the Rule.

If the DOL makes an affirmative determination pursuant to these considerations or if it concludes for any other reason that the Rule is inconsistent with the priorities outlined in the Presidential Memorandum, it is directed to publish a proposed rule to rescind or revise the Rule, as appropriate and consistent with law.

On March 2, 2017, the DOL published in the Federal Register a proposed rule that would extend the applicability date of the Rule and PTEs for 60 days (i.e., until June 9, 2017) to allow the DOL to “address questions of law and policy.”2

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Compliance modernization is no longer optional

How evolved is your approach?

More than just a cost of doing business. To Chief Compliance Officers, it’s a refrain they’ve heard for years: a challenge, an ambition, and perhaps a sliver of veiled insult. Few dispute that the resources an organization devotes to keeping out of trouble have the potential to contribute far more than they traditionally have.

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CMS releases proposed rule intended to provide more certainty on health insurance markets, extends deadlines for plans to file products with Exchanges

The Centers for Medicare and Medicaid Services (CMS) on Wednesday, February 15, 2017, released a proposed rule intended to provide health insurers greater certainty about the individual and small group markets in the 2018 benefit year under the Affordable Care Act (ACA). Days later, a CMS division proposed providing plans with more time to file products for the federally-facilitated Exchanges in order to allow time to modify products in response to the proposed changes.

The policies proposed in the regulation generally have been requested by health insurers in previous years.

America’s Health Insurance Plans, a trade group representing insurers, issued a statement, saying, “We appreciate the Administration’s efforts in proposing policies intended to address stability, affordability, and choice, helping consumers get the coverage they need.”

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Regulatory analytics: Keeping pace with the SEC

5 insights into compliance

As 2016 drew to a close, the US Securities and Exchange Commission (SEC) touted its “vastly increased use of data and data analytics to detect and investigate misconduct.”1 The increasing scope and sophistication of analytics employed by regulators compel financial services firms to examine how they can use analytics, both in retrospective “look-back” manner and proactively, to address growing scrutiny and enforcement. Below are five insights that can be helpful in formulating a regulatory analytics strategy.

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White House directs Department of Labor to review Fiduciary Rule

On Friday, February 3, 2017, the White House issued a memorandum to the Secretary of the Department of Labor ordering an updated economic and legal analysis.

Since the Department of Labor’s (DOL’s) “Conflict of Interest Rule” (the “Rule”) and related prohibited transaction exemptions were finalized in April 2016, many impacted organizations have expressed reservations about the timeline and the volume of complex work required in order to be compliant by April 10, 2017.

Due to concerns that the Rule “may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of [the] Administration,”1 President Donald J. Trump issued a memorandum (the “Presidential Memorandum”) directing the DOL to examine the Rule to “determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”

The memorandum does not directly delay or order a delay to the Rule’s applicability date, but it directs the DOL to prepare an “updated economic and legal analysis concerning the likely impact” of the Rule, which shall consider, among other things:

  • Whether the anticipated applicability of the Rule “has harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice,”
  • Whether the anticipated applicability of the Rule “has resulted in dislocations or disruptions” within the retirement services industry that may adversely affect investors or retirees, and
  • Whether the Rule is “likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.”

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Exam priorities for securities firms in 2017

The Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) recently released their annual examination priorities for 2017.  Although the regulators independently develop their areas of focus, there are six overlapping priorities that securities firms may want to address in the near term.

The SEC’s priorities are organized around three thematic areas (two of which, the first and third, were included in 2015 and 2016):  (1) protecting retail investors; (2) focusing on risks specific to elderly and retiring investors; and (3) analyzing issues related to market-wide risks.

FINRA’s high-level focus will be on:  (1) high-risk and recidivist brokers; (2) sales practices; (3) financial risks, including liquidity risk and compliance with recently effective amendments to Rule 4210 (Margin Requirements); (4) operational risks, including cybersecurity; and (5) market integrity.

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What is the role of compliance in battling cyber risk?

Cross-Industry Compliance Leadership Summit eyes the intersection of two disciplines

“It’s called the cloud,” Deloitte & Touche LLP Principal Julie Bernard remarked. “It’s not called the vault. Keep that in mind.”

Bernard and Deloitte & Touche LLP Managing Director Susan Ameel moderated a session at Deloitte Advisory’s recent Cross-Industry Compliance Leadership Summit about the ways compliance and cyber security meet, and how the executives responsible for those areas might benefit by coordinating their efforts.

Many of the industries most subject to cyber attacks are also among the ones that have the most sophisticated regulatory and compliance obligations. Financial services, energy and utility companies, health care organizations, defense and aerospace – they all have to safeguard their own sensitive data, their customers’ information, or both.

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Regulatory, legislative efforts focused on ACA repeal move forward as Congressional Budget Office releases new health coverage projections

Hours after taking the oath of office on Friday, January 20, 2017, President Trump signed an executive order that opens the door for the secretaries of the departments of Health and Human Services (HHS), the Treasury, and Labor, as well as the leaders of other federal agencies, to take regulatory action to ease requirements under the Affordable Care Act (ACA) or waive or delay enactment of certain provisions.

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