Regulatory Madness: We Have a Winner!

Mar 21, 2012

It was neck and neck to the end, but Health Care Region dark horse the Essential Health Benefits Package beat out the favorite out of the Financial Region, the Consumer Financial Protection Bureau (CFPB).

Combining and Facebook voting totals, Essential Health Benefits narrowly defeated what Chamber President and CEO Tom Donohue called the "mother of all regulations." CFPB is an agency with power, money, and virtually no accountability, and it gave Essential Health Benefits Package a run for its money.

But Essential Health Benefits Package refused to be counted out or called a Cinderella. Breaking down its performance, this underrated regulation came to play and earned its title as the most maddening of all.

The package requires all plans in the small group and individual markets to cover a uniform essential health benefits package. This is a regulation with a talented bench that had legs to go deep into the game. Why? An expansive regulatory definition of “essential” threatens to limit flexibility and raise costs. Businesses and consumers are already buckling under the weight of health care costs, and this regulation helps ensure that millions would be unable to afford coverage. When the tournament clicked down to the final minutes, it became clear that Essential Health Benefits Package would be cutting down the nets.

Bryan Goettel, expert bracketologist, was shocked by the upset win over CFPB. "When time ran out, I thought CFPB would be the regulation left standing," Goettel said. "It had all the ingredients of a champion: single director, budget with limited oversight, and layers of bureaucracy."

"It goes to show you that you can't overlook a deep bench," said Greg Galdabini, bracketologist. "I was wary of going with a favorite in this tournament because when you have so many maddening regulations, you just can't count any one out."

*Note: Regulations in the bracket include those being considered, proposed, and final.

Labor Region

National Labor Relations Board’s Ambush Election Rule:

  • Shot: The “ambush election” rule would expedite union elections in as few as 10-21 days.
  • Foul: This rule is about making it easier for unions to win elections by cutting off free speech rights of employers to educate employees about the effects of unionization.

National Labor Relations Board’s Poster Rule:

  • Shot: The poster rule would require businesses to post notices explaining employees’ rights to unionize.
  • Foul: This rule violates federal labor and regulatory laws and First Amendment rights—it’s a classic case of a governmental agency overstepping its bounds.

DOL Persuader Rule:

  • Shot: The “persuader” rule is supposed to provide greater transparency in the union organizing process.
  • Foul: The rule, straight from the labor wish list, would make it virtually impossible for employers to obtain the legal advice they need to safely exercise their statutory rights to express their views during union organizing campaigns.


  • Shot: It sounds like an extra from Star Wars, but the I2P2 rule would mandate that all employers “find and fix” workplace hazards, even if they are not currently regulated.
  • Foul: Uncertainty and confusion, not to mention giving OSHA carte blanche to issue citations, are the concerns with this open-ended requirement.

Financial Region

The Volcker Rule:

  • Shot: The Volcker Rule would prohibit banks from engaging in long-established financial activities such as proprietary trading, private equity, and hedge fund activities.
  • Foul: Many experts believe that such a rule would inhibit market making activities, resulting in increased costs of raising capital for companies and municipalities, higher bank fees for consumers and businesses, and potentially concentrate risk.  

Consumer Financial Protection Bureau (CFPB):

  • Shot: The CFPB was created to regulate the market for consumer financial products and services.
  • Foul:  The CFPB is an unaccountable, solitary federal agency with a $500 million budget led by a single Senate-confirmed director who is unconfined by a traditional system of checks and balances.

Derivatives Regulation:

  • Shot: Regulations will force main street businesses to adhere to bank-like regulations such as posting margin on trade.
  • Foul: Companies use derivatives to manage everyday business risk, such as exchange rates across countries. The pending regulations could divert precious working capital from job-creating activities, including R&D and business expansion.

Money Market Funds Regulation:

  • Shot: Potential reforms to money market funds, such as imposing capital cushion requirements and new share price valuation rules, would change the fundamental nature of the product.
  • Foul: Money market funds are important to meeting the short-term capital needs of businesses. The potential rules would come on top of enhancements enacted by the SEC in 2010, creating another government mandate that would threaten to wipe out a vital and safe source of business financing.

Health Care Region

Medical Loss Ratio

  • Shot: The medical loss ratio provision dictates that health insurers spend 80-85% (depending on market size) of premiums on what the government considers health care expenses.
  • Foul: The rule implementing this provision improperly classifies many large mandated expenses as administrative (i.e. not health care), making it nearly impossible for insurers to meet the requirement.

Essential Health Benefits Package

  • Shot: The statute requires all plans in the small group and individual markets to cover a uniform essential health benefits package.
  • Foul: An expansive regulatory definition of “essential’ health benefits will limit flexibility and raise costs, ensuring that millions would be unable to afford coverage.

Summary of Benefits Coverage (SBC)

  • Shot: The SBC provision requires all plans to provide enrollees, applicants, and policy holders a short (no more than four-page), undefined “plain language” summary of benefits and coverage details.
  • Foul: The regulation implementing the SBC language mandates compliance within a near-impossible 7 months and requires the content to be provided in an exceedingly rigid and difficult template.

Grandfathered Plan Regulations

  • Shot: The broad “grandfathered plan” provision was enacted to allow people who like their current health care coverage to keep it.
  • Foul: The regulation implementing the broad provision restricts the conditions under which a plan can remain grandfathered, effectively negating the ability of people to keep the plan they had.   In fact, the regulation itself estimates as plans make the typical annual changes, up to 70% of plans will lose their grandfathered status by 2013.

Environment and Energy Region

Utility MACT (Maximum Available Control Technology):

  • Shot: Coal-fired and oil-fired power plants would have to severely limit their emissions of mercury, arsenic, chromium, hydrochloric acid, and several other substances.
  • Foul: With just three years for plants to meet the new standards, there isn’t enough time to replace, retrofit, or convert power plants from coal-fired to other sources, which could result in major power grid failures.

Coal Ash:

  • Shot: EPA wants to regulate everyday coal ash as a hazardous waste.
  • Foul: Coal ash is recycled and used for a variety of products, including drywall and concrete, but classifying it as hazardous waste would eliminate that possibility. The American Coal Ash Association reported that in 2007, 43% of coal ash found beneficial uses.

Cooling Water Intake Structure Rule:

  • Shot: The EPA has proposed that existing power plants and manufacturing facilities undergo a complex assessment of their fish protection standards.  
  • Foul: EPA failed to properly estimate costs and to conduct the required jobs impact evaluation, and was thus unable to prove that the proposed rule was the least burdensome regulatory alternative available.

Boiler MACT:

  • Shot: Boiler MACT sets emission limits for air pollutants from industrial boilers and process heaters used by a wide range of manufacturers.
  • Foul: The rule would set emission limits at levels that are barely detectable and possibly unachievable. It requires the installation of four different air pollution control devices that conflict with existing control requirements, a costly provision that could result in lost jobs.




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