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Must-Know Compliance Risks for Outfitter Businesses in 2024

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In 2023, many businesses faced numerous compliance challenges that left them scrambling to keep up with the ever-changing landscape of worker protections, AI integration and resilient labor markets. Moving into 2024, outfitter employers are urged to prepare for impending legal changes including potential overtime rule shifts and evolving employee benefits requirements. To stay ahead of these challenges, it’s crucial for outfitters to employ proactive strategies, update their policies and closely monitor the anticipated compliance challenges that lie ahead.

State-Specific Paid Leave Advancements

Numerous states have expanded or introduced paid leave mandates including provisions such as mental health days and unique scenarios like bereavement. Closing out 2023, 11 states and the District of Columbia had implemented paid  family and medical leave programs. Your business must understand the complexities of these mandates including coverage, eligibility, funding and intersections with other leave provisions. Proactive employers can also benefit from the competitive advantages of offering paid leave such as attracting top talent, reducing burnout and increasing retention.

Redefining Employee Classification

Significant changes in employee classification are expected in 2024. The distinction between  employees and independent contractors  will draw intense scrutiny due to its impact on labor laws, benefits and tax rules. The U.S. Department of Labor's (DOL) proposed revisions to overtime exemptions and contractor classifications, may reclassify more workers as nonexempt and escalate employer legal challenges. Additionally, the DOL has redefined employee-contractor criteria, offering more workers protection under the Fair Labor Standards Act (FLSA). With these imminent changes, your business should carefully review its classification practices and compliance strategies.

New Religious Accommodations Standards

Under Title VII, employers with 15 or more employees must accommodate workers' sincerely held religious beliefs unless it causes undue hardship. The 2023 Groff v. DeJoy Supreme Court decision altered this standard. Employers now must demonstrate that granting a  religious accommodation  would result in substantially increased costs specific to their business. The ruling also clarified that employers can’t use coworker morale or disruption as undue hardships.

In 2024, employers must navigate the complex relationship between religious freedom, inclusivity and evolving state and local laws. Your outfitter can maintain compliance and promote respect for diverse beliefs and identities by updating updated policies, taking proactive measures and fostering inclusive workplace cultures.

Expanding Pregnancy-Related Workplace Protections

The recent federal PUMP Act and Pregnant Workers Fairness Act (PWFA)  enhance workplace rights  for pregnant and postpartum employees. The PUMP Act mandates employers offer paid break time and private spaces for expressing breast milk. Additionally, the PWFA makes it mandatory for employers with 15 or more employees to provide reasonable accommodations for pregnancy-related conditions unless it imposes an undue hardship. With these laws extending rights and protections, your business should prepare for greater compliance demands, potential litigation risks and the challenge of navigating diverse state-specific regulations on pregnancy accommodations.

AI Integration: Ethical & Regulatory Considerations

The Artificial Intelligence (AI) integration, while transformative, requires rigorous oversight to mitigate biases and ethical concerns. This is especially true in areas like recruitment processes. Signaling heightened oversight in 2024, many government entities are addressing AI's impact on employment. Initiatives from the White House, EEOC and various agencies highlight responsible AI utilization, particularly concerning discrimination and algorithmic decision-making. While AI offers transformative potential for your business, you should prioritize responsible AI adoption and utilization, ensuring transparency and ethical governance.

We’re here to guide you through this treacherous terrain of compliance risks. Request a CBIZ Adventure Sports Insurance quote today. 

SEC’s Cybersecurity Disclosures

The U.S. Securities and Exchange Commission’s (SEC) new regulations mandate public companies to standardize cybersecurity risk disclosures. Companies must submit a Form 8-K within four business days of discovering a significant cybersecurity incident, including important details such as incident timing, nature, impact on data and operations and remediation actions. Your company is encouraged to bolster cybersecurity practices and consult with a cyber expert to maintain compliance and anticipate potential enforcement actions and future legislation impacts.

NCCI Experience Modification Updates

The National Council on Compensation Insurance (NCCI), overseeing workers' compensation in 36 states, has updated its experience modification factor to include  state-specific adjustments  to the split point and state accident limitations (SALs). While the fundamental formula remains unchanged, it better aligns with state-specific claim costs and reduces the impact of large claims, resulting in a fairer and more efficient rating system. Despite these modifications, NCCI assures an overall "premium-neutral" outcome, though specific impacts will vary among businesses.

ACA’s Dynamic Preventive Care Coverage

Employers should brace for notable changes and considerations of Affordable Care Act (ACA) mandates including:

  • The COVID-19 public health emergency conclusion means health plans no longer universally cover COVID-19 diagnostic tests without cost sharing. Immunizations remain covered but can be restricted to in-network providers.
  • A U.S. District Court decision has challenged aspects of the ACA's preventive care mandate, specifically targeting coverage based on certain U.S. Preventive Services Task Force ratings and preexposure prophylaxis (PrEP) drugs for HIV prevention. Employers should stay vigilant about potential changes.
  • Expansion of the ACA's preventive care mandate on contraceptives could expand due to the FDA's approval of Opill, the first over-the-counter daily oral contraceptive. Employers should monitor evolving guidelines, especially concerning the coverage of OTC preventive products and contraceptives.

Federal Focus on Mental Health Care

The federal government’s concerted efforts to elevate mental health awareness underscores your business’ responsibility to foster a supportive environment and access to care. In 2024, employers should focus on ensuring MHPAEA compliance, particularly on nonquantitative treatment limitations (NQTLs). This involves confirming compliance with health plan issuers, remaining informed on regulatory shifts, identifying potential NQTL issues and considering parity requirements when adjusting coverage. While employers often rely on third parties for compliance, they have a fiduciary responsibility to ensure adherence to laws like MHPAEA. Your company should proactively comply to avoid legal consequences and foster a more supportive workplace culture.

Rising Emphasis on Family Planning Benefits

Several states have enacted reproductive health regulations following the Supreme Court's overturn of Roe v. Wade. This resulted in a  growing emphasis on fertility care  coverage. Historically infertility treatments have been costly and often excluded from insurance coverage. While not federally mandated, nearly 20 states now require insurers to offer some fertility care coverage. Controversy has arisen over the definition of infertility, particularly its implications for same-sex couples seeking treatment. This has led to notable litigation such as the Murphy v. Health Care Serv. Corp. case. As regulations evolve, your business must navigate state-specific requirements and monitor legal developments, particularly around the definition of infertility and ACA Section 1557.

We’re Here to Help You Navigate 2024 Compliance Challenges

In a world where compliance challenges lurk around every corner, we understand that it can feel overwhelming at times. We’re here to guide you through this treacherous terrain of compliance risks. For additional risk management recommendations and insurance solutions for your business,  request a free CBIZ Adventure Sport Insurance quote  today.

This blog may contain scenarios that are provided as examples only. Coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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CBIZ Sattler Adventure Sports Insurance, a division of CBIZ Insurance Services, Inc., is the largest insurer of adventure sports businesses in the United States. As part of an $850 million New York Stock Exchange traded company (CBZ), we developed a policy coverage to meet the needs for those in the recreation and outfitting industries. Our policy is underwritten by an A.M. Best Rated A++ (Superior) company.