Although the recent $1.2 trillion appropriations bill contained a massive $400 million funding cut for the U.S. Department of Labor (DOL), the Employee Benefits Security Administration (EBSA) escaped the slash in funding. EBSA, the arm of the DOL that oversees employee benefits, will receive the same amount of funding in FFY 2024 that it received in FFY 2023, or $191.1 million.
Many see the flat spending allocation to EBSA as maintaining the status quo, but also as a nod to the agency’s recent focus on mental health care, an issue which enjoys bipartisan support. The spending deal passed the House by a wide margin before a midnight deadline to fund the government before a previous temporary funding measure expired.
Nonetheless, Congress allowed EBSA’s projected shortfall in staff funding to remain. EBSA warned lawmakers just a few weeks ago that supplemental funding for 117 staff members expires at the end of the year. A lack of funding for these staff members, who enforce crucial healthcare laws such as the No Surprises Act and mental health parity laws, could lead to reduced enforcement efforts. In 2020, Congress allocated $500 million in supplemental funding for implementing healthcare laws such as these, which is what led to EBSA’s ability to fund staff to enforce these laws.
Finally, an explanatory statement that accompanied the appropriations bill reiterated the “expectation and request” of Congress to EBSA concerning employee stock ownership plans (ESOP). Congress authorized these initiatives in passing Secure 2.0, which reformed retirement plan legislation in 2022. However, as EBSA noted last year, Congress did not provide additional resources to fund these initiatives, and although it authorized millions in grants in Secure 2.0, the FFY 2024 appropriations measure still lacks such funding. Therefore, while EBSA has begun staffing a new Division of Employee Ownership and is using existing resources to increase access to information about such initiatives, funding is still lacking.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
