Professionally, this past year has impacted all of us in the employee benefits industry on quite a few levels. As I write this, it is the Monday following the passage of the Health Care Reform Act. This 2,500+ page legislation will result in fundamental changes in the field of health and welfare benefits. It is, quite simply, the single most profound law to impact employee benefits since the passage of ERISA itself. We all have our homework cut out for us. Looking forward, I can promise that the online version and future editions of this text will contain significant updates in order to keep you up to date with the dramatic changes coming to the health and welfare benefits landscape. This past year has also seen the Hi-Tech Act under the 2009 Stimulus Act expand the privacy and security rules of HIPAA to include business associates, increase fines and penalties, place authority for enforcement with the Office for Civil Rights, and grant states' attorney general offices wider authority to investigate and litigate actions in violation of the rules. We've provided our analysis of these changes in Chapter 2. The progression of HIPAA--which started as law to facilitate the portability and continuity of health insurance coverage and morphed into a series of security and security rules for covered entities, new rules governing electronic disclosures, and, now, expansion of these rules to cover virtually any entity that comes into contact with protected health information through its normal business--will continue into the future. Personally, I see continuing involvement from the state level and the continued expansion of duties and obligations beyond the originally intended covered entities. I also see an increase in litigation on HIPAA matters.
One other aspect of health and welfare benefits has been impacted in 2009 as well. The Genetic Non discrimination Act of 2008 saw the release of the interim final rules that put some meat on the bones of these new restrictions. Congress also seems to want to continue the 2009 Stimulus Act provisions regarding the extension of the COBRA subsidies into the near future. They've extended it twice as we prepare to go to print, and there is a very strong possibility it will be extended through the end of 2010. Perhaps by the time you are reading this it has been. We give the update through late March in Chapter 2.
2009 also saw the continued tuning of the electronic filing obligations of the Annual Report Form 5500 through the E-FAST electronic filing system. The Department of Labor has provided additional on-line guidance in the forms of questions and answers, and it has updated requirements for filers and their on-line signers. We detail these latest tweaks and upgrades for you in Chapter 1.
Speaking of the Department of Labor, they couldn't seem to make up their mind regarding the investment advice rules and the accompanying prohibited transaction exemption. They issued the final regulations to implement the statutory exemption effective in March and then they pulled the plug on them in November with a formal withdrawal of the final rule. In the end, the DOL made the right decision. The marketplace was of the opinion that the final rules did not adequately protect the participants and beneficiaries from conflicts of interest. The DOL will likely try to make it right and make it better sometime between today and when we go to print with the 2011 edition. The details of what has occurred to date are found in Chapter 4.
It wasn't only the legislature and regulatory authorities who were busy in 2009. As always, the courts kept humming along with cases impacting fiduciary duties and liabilities, fee disclosure, plan investment issues, and participants' rights. As these decisions impacted the world of ERISA, we document them throughout the appropriate chapters.
Given the active nature of the current administration in the White House, everyone in the employee benefits field should anticipate a very busy 2010 and early 2011.
Frank J. Bitzer March 22, 2010