Original content from United Benefit Advisors (UBA)
As expected, the first U.S. government shutdown in 17 years has not been kind to those seeking an afternoon at a national park, researching any internet address ending in “.gov” or attempting to have questions answered about a past tax return. However, as it nears its apparent end, the shutdown’s effect on the employee benefits discipline has been just as broad.
Guidance is Missing
As reported by Employee Benefit News (EBN), Bill Sweetnam, principal at Washington-based Groom Law Group, said, “During the shutdown, we haven’t seen any guidance come out from the IRS or Treasury, which is frustrating to employers and plan sponsors because they want to know what they have to do. The fact that we have a shutdown doesn’t postpone an effective date.”
Fisher & Phillips LLP Partner Bob Christenson told EBN his summation is that, with a skeleton staff in place at the IRS, the voluntary compliance program that many qualified programs use to correct errors likely will remain dormant until the resumption of normal government duties, even if that scenario is not widely broadcast.
“They’re not going to advertise that they don’t have the usual personnel,” he said.
Though a deal to end the shutdown and avoid debt default appears to be imminent, the fallout from the first government cessation since 1996 is uncertain; Garrett Fenton, Miller & Chevalier in Washington, D.C. says even though many employers are currently left in the dark about how to deal with certain regulations, an increase in guidance could follow the shutdown’s end.
“When we have proposed regulations without final regulations, typically the agencies will allow you to rely on those proposed regulations in good faith,” he told EBN. “It’s not an ideal situation when you don’t have final guidance before the effective date, but that does happen relatively frequently, especially in the Affordable Care Act context.”
EBN also touched on the shutdown’s ramifications on health care reform, which is in the early throes of its exchange program. While guidance has been hard to come by during the stoppage, any lengthened shutdown would be even more detrimental.
“If the shutdown became protracted and government was really in a true state of paralysis, I think there’d be concern about whether certain regulations that need to be issued would be issued in connection to the [Affordable Care] Act,” said Steven Friedman of the law firm Littler Mendelson P.C.
Still another concern is the dissemination of information in a smaller time frame than previously planned, once the shutdown does cease.
“When the shutdown is over, if there is a short window of opportunity to get [ACA] guidance worked through the system, we might end up with more FAQ-type guidance, which is not the preferred way, Paul Hamburger of Proskauer Rose LLP told EBN. “They may have to rely more on quicker guidance like that to give people some help in dealing with rules.”