Recently, we wrote about how laws are created in the blog “U.S. Legislative Process: How a Bill Becomes a Law.” After legislation is passed by both the House and the Senate and signed by the president, it becomes law. The next step is for the corresponding government agency to write the rules, or “regulations,” that are written to explain how legislation is interpreted and to create the recommended actions for implementation.

If a law directs a specific agency to act, that agency determines if:

• A regulation is needed at all
• An existing rule can be modified
• A new regulation is required.

Creating a new regulation has three main phases: beginning the rulemaking process, developing a proposed rule and creating the final rule.

Beginning Rulemaking

In this phase, an informal (though potentially complex) process begins. After an agency decides to move forward with a new regulation, internal discussions begin about what initial provisions to include, and a draft document is created. Sometimes at this point, agencies submit an “Advanced Notice of Proposed Rulemaking” (ANPR) to the Federal Register. The ANPR outlines the plan for the regulation and usually asks the public for feedback.

Official notices, including the ANPR, are published in the Federal Register to explain the guidance and educate the public on new developments under consideration. This part of the process allows anyone to comment on the proposal and identify questions or scenarios that the rules could clarify.

Developing a Proposed Rule

The official document announcing a proposed rule is a “Notice of Proposed Rulemaking” (NPRM or just NPR) and explains an agency’s plan under consideration. Federal agencies are required to publish the NPRM to solicit public comments before finalizing regulations. Notices first appear in the Public Inspection version of the Federal Register and then are officially published in the Federal Register several days later. The NPRM includes a detailed summary section that explains the reason the rule is necessary and addresses:

• The impact of the new regulation, including an estimate of the number of entities affected and the cost
• The background of the proposed rules and the steps already taken
• The data or other information already collected
• The alternatives identified or still under consideration.

Generally, the comment period is 60 days after publication, however, it’s possible to have a shorter or longer timeframe when there is justification. Anyone—including groups, companies or individuals—can submit questions or suggestions, so it’s possible for agencies to receive no comments or hundreds of comments.

During this time, interested parties can also request meetings to express their concerns or show support for the proposed rule. Meetings can be scheduled with representatives from the agency creating the proposed rule or with the Office of Information and Regulatory Affairs (OIRA), the department that advises the president during the rulemaking process. OIRA is an authority of the executive branch that oversees rulemaking across all agencies and reviews the draft documents of proposed and final regulations, especially when they are considered important policy changes. Once OIRA approves the information collection, the process continues to create a final rule.

Creating the Final Rule

After the comment period closes, the agency reviews the comments and questions received when deciding the path forward. Considerations of a new rule include if it will:

• Solve the problems that were originally identified
• Accomplish the goals
• Identify alternate solutions that may be more effective or cost less.

During this analysis, the agency could decide to modify the proposed rule or completely abandon the plan to create a new regulation. The process could take weeks, months, or even years in some situations.

When completing the final rule, the document must include:

• A summary of the relevant issues and purpose of the rule
• A summary of the public comments and the agency’s response to questions or concerns
• An in-depth explanation of the final rule
• The effective or applicability date(s).

Once those changes are made, the agency publishes the final regulation in the Federal Register. 

After the Final Rule

After the final rule is published, there may be additional modifications of the document or clarification in supplementary guidance released to provide a better interpretation for the affected parties.

Additional Resources for Regulations

• Log in to the International Foundation website for access to our U.S. Regulatory Updates webpage, featuring selected regulations related to employee benefits.
• Watch for your daily Today’s Headlines emails featuring timely employee benefits–related regulations.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.