The impending transition from the Biden administration to the Trump administration will undoubtedly affect all facets of American life. However, the shift, along with Republican control of the Senate and potentially the House, is likely to result in major changes for employer-sponsored health and welfare plans.
The Affordable Care Act
First, the Biden administration worked to maintain and strengthen the Affordable Care Act (ACA), which consists of a public exchange system and premium tax subsidies to allow Americans to purchase affordable health insurance. Trump supported repealing the ACA during his first term but was unsuccessful. Republicans have doubled down on repealing the ACA this time around, but residents of two Republican-led states, Florida and Texas, are heavy users of ACA exchange systems through HealthCare.gov.
Trump could immediately move to kill the ACA exchange system altogether. Alternatively, he could compromise by keeping it in place but curbing expansion efforts or keeping the COVID pandemic-era extra premium tax credits in place. Allowing the ACA exchange plan system to remain could assist benefit plan administrators in setting up individual coverage health reimbursement arrangement (ICHRA) programs. These programs allow workers to utilize money from their employers to purchase their own individual health coverage, which is guaranteed without any underwriting based on health status.
Alternatives to Group Major Medical Insurance
The Biden administration has taken steps to prevent “anti-selection pressure” in the ACA exchange system. This term refers to the risk that employers with few employees or health employees will avoid using fully insured health insurance, which, in turn, increases the average risk level of employers using the fully insured market. To that end, the Biden administration sought to regulate and restrict some alternatives to group major medical insurance, such as short-term insurance policies, hospital indemnity insurance, and multistate association health plans.
Some major health insurance companies have backed these regulatory efforts to curb competition. However, Republican candidates have been critical of health insurance companies, and the Trump administration is not likely to continue efforts to regulate and restrict alternatives to group major medical insurance policies.
Prescription Drug Caps
The Biden administration has worked to cap out-of-pocket spending on prescription drugs for enrollees in Medicare benefit plans. The administration also has enabled the Medicare program to negotiate the price of popular prescription drugs with pharmaceutical companies. Trump supported Medicare program drug price negotiations during his first term in office, so his administration may continue those efforts.
Pharmacy Benefit Managers
Independent pharmacy groups have supported both Democrats and Republicans in the new Congress. Those groups seek to keep pharmacy benefit managers (PBMs) from limiting their participation in PBM pharmacy networks or pushing consumers to use their mail-in pharmacies. Regulation of PBMs may find bipartisan support in the new Congress, as litigation continues over states’ efforts to pass laws regulating them.
Health Account Programs
The Biden administration has not prioritized regulating or restricting health account programs, such as health savings accounts, health reimbursement arrangements, or flexible spending arrangements. Republicans tend to support these programs, which often provide tax benefits to higher earners. As a result, expansion of existing health account programs – or development of new ones – could occur during the Trump administration.
Long-Term Care
Trump proposed improving in-home support for older Americans and creating a tax credit for family caregivers during his campaign. Any implementation of these proposals could create new opportunities for private long-term care benefits options.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and H.R./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.
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