Why advisers need ‘in-house’ compliance

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With regulatory reporting requirements soaring due to the Affordable Care Act, ERISA and other governmental rulemaking, brokers are turning to their own compliance division to support their clients. Employee Benefit Adviser spoke with Richard Asensio, vice president and director of compliance at Burnham Benefits, about what advisers should be aware of and why he believes having an in-house compliance team is so beneficial.

EBA: Why are brokerages are adding in-house compliance?

Asensio: Having a specialist in-house is almost a necessity. From HR’s point of view, I think [having the expertise in house] is more cost-efficient. We find that by providing these services, clients don’t have to go a third-party. Compliance is part of the package they are buying when they come to us. If they had to go through a third party underwriter, compliance people, legal folks, they would have to pay on a project-by-project basis.

EBA: How has compliance changed for employee benefits in the past year?

Asensio: The biggest thing is we have the Affordable Care Act, which is always changing and evolving. 2015 was the first full year of implementing the employer mandate. With that and the accompanying employer reporting requirements … you have the requirement to track hours to determine who is a full-time employee under the ACA. Those are the big things.

You have the non-ACA laws too. HIPAA Privacy has come back now. The Office of Civil Rights has basically announced they will be instituting their second phase of mandated audits under the HITECH Act. That is another level of requirements.

"It is a big advantage to be able to offer compliance services as part of your overall service package."

ERISA is still here. You also have the ADA, and the EEOC has the whole issue with wellness programs and making sure they comply with both the ACA and the ADA. There are multiple layers of compliance out there.

EBA: How can you help prepare clients for all these requirements?

Asensio: The best thing that we found is to have in-house resources and compliance tools to provide to clients. We are constantly communicating with clients. We provide webinars, publications and legislative updates, as they come along. We try to keep everyone informed of the latest developments and share best practices with them.

EBA: How do clients respond to that?

Asensio: They don’t expect it, but what you find now with many employers, and HR in particular, is that they are much more thinly staffed and have many more responsibilities, including compliance. We are kind of thought of as an extension of HR in many ways.

EBA: What do you say to brokers who don’t have compliance divisions?

Asensio: Having one is a big advantage. It is a big advantage to be able to offer compliance services as part of your overall service package. I know smaller brokers will try to team up with an outside attorney to work with them, and that is always a good arrangement to have. The negative is that outside attorneys have multiple clients or multiple brokers that they can be working for, so you don’t have the same dedication that you can provide by having your own in-house team.

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