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Compliance Corner

Federal Updates

Biden Administration Freezes Certain Regulations

On January 20, 2021, the Biden Administration’s Chief of Staff Ronald Klain issued a memo to the heads of all executive departments and agencies announcing that there will be a freeze on regulations that fit certain criteria, pending review. All proposed rules in the pipeline but not yet in the Federal Register are put on hold, and all rules published in the Register but not yet effective are candidates for an extended 60-day extension, which could include a new 30-day comment period. Rules subject to this memo are to be reviewed by the heads of executive departments and agencies appointed or designated by the president after noon on January 20, 2021. There are several caveats and conditions that may affect whether these rules will be extended or even pulled off the Register, including whether they are subject to statutory or judicial deadlines and whether they meet some critical health, safety, environmental, financial or national security concern.

The independent contractor is one such rule that may be affected by the 60-day extension because its effective date is March 8, 2021. The proposed wellness incentive rules have already been pulled from the Register pending approval of the new EEOC chair, and it is possible that those rules will be put on hold indefinitely or substantially changed. Both of these matters were covered in the January 20, 2021, edition of Compliance Corner.

In addition to the rules that affect health plan benefits, several rules regarding retirement plans are subject to the freeze. Among them include the prohibited transaction exemption for investment advice, discussed in the December 22, 2020, edition of Compliance Corner, which was supposed to take effect on February 16, 2021, and the interim rule on lifetime income illustrations which was discussed in the September 29, 2020, edition of Compliance Corner, and scheduled for an effective date of September 18, 2021.

In addition to this executive action, Congress may also review federal agency rules issued during the last 60 legislative session days and nullify the ones it doesn’t like by a simple majority vote in both chambers. As of the publication of this article, Congress has not done so.

We will keep you updated on the status of these and other rules as they make their way through the federal administrative process.

Whitehouse Memo »

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