By: HUB's Compliance Team

What could employers expect from Biden presidency? The short answer is “it depends on the Senate.” At this point, the composition of the Senate will not be known fully until January (when two Senate runoffs in Georgia will take place). However, in an effort to give some concrete predictions, this article will assume that Republicans hold at least one of those seats allowing them to maintain a Senate majority.

The Affordable Care Act

President-elect Biden pledged to “protect and build on” the Affordable Care Act (“ACA”). Of course, his administration’s ability to do so will depend on the ACA’s fate at the Supreme Court. Oral arguments were heard on November 10 at the Court and we will likely not know a decision until sometime next year. For practical purposes, we assume that the ACA remains intact (or at least that the most relevant employer rules remain intact).

Legislative Approaches. President-elect Biden proposed adding a public-run health insurance option to the ACA (sort of like a Medicare buy-in) and expanding subsidies/tax credits for individual insurance. The expanded subsidies would be available to more individuals, including potentially those with affordable, minimum value employer-sponsored coverage, and would be more generous. He also proposed lowering the Medicare age from 65 to 60.

With a Republican Senate, these policy goals are likely off the table. He may be able to achieve one of them (increasing the generosity of subsidies seems the most likely) as part of a negotiation in a larger bill, but any of them would be an uphill battle. If the subsidies are made more generous, this could potentially drive employees to seek individual coverage. If individuals can receive subsidies even if their employers offer affordable, minimum value coverage, that could cause even more employees to leave employer-sponsored coverage.  However, as noted, this seems unlikely.

Regulatory Responses. However, a President Biden will likely work through executive orders and regulations to achieve what policy goals he can within the confines of the law. These are expected to have a more limited effect on employers than any legislation. His administration could seek to expand opportunities for individuals to buy coverage through the ACA Marketplaces/Exchanges. This could happen by expanding the open enrollment period for the Marketplaces/Exchanges and modifying the rules that apply to individual coverage. These would likely have minimal impact on employers overall.

On the other hand, a Biden administration could reissue ACA Section 1557 Nondiscrimination Rules, including the now-gone notice requirement. It could also withdraw or limit association health plan rules. Of these, the Section 1557 Nondiscrimination Rule changes could have the most direct impact on employers since it could require plans to cover gender transition items and services and potentially resurrect the notice obligation.

The Obama administration also looked to expand the breadth information required on the Form 5500, which would dramatically increased the effort and cost of preparing those forms for group health plans. Employers and others largely pushed back on these rules and the Trump administration did not pursue them further. A Biden administration could look to revisit these rules.

Some commentators speculate that a Biden administration may seek to undo the Trump administrations Individual Coverage Health Reimbursement Arrangement (“ICHRA”) rules. This is based in part on the fact that the Obama administration (where Biden was Vice President) initially prohibited employers reimbursing employees for the cost of individual coverage. Without a functioning crystal ball, it is hard to say, but a Biden administration could also see ICHRAs as way of increasing enrollment in the ACA Marketplace/Exchanges and thus largely leave them alone.

Another aspect of Trump administration policy that seems even more likely to survive are the health plan price transparency rules. These rules were authorized by the ACA, but were not proposed until November 2019. While they might receive comparatively less focus during the Biden administration (transparency was not addressed as part of President-elect Biden’s platform), and could potentially be delayed, they are unlikely to completely be removed given that they come from the ACA and would appear to support the Biden administration’s overall goal of lowering healthcare costs.

Expected Result: Most of the changes will be regulatory in nature. While compliance costs will likely increase, the aggregate effect may not be felt for several years. Additionally, the ACA Marketplaces/Exchanges could become more robust which may also have indirect effects on employers. ICHRAs and price transparency will likely continue on.

Prescription Drugs

While there is general bipartisan agreement on the desire to lower prescription drug costs, the paths to get there are many and varied. Still, areas of potential bipartisan agreement could include allowing drug importation (provided the drugs are safe) or speeding the ability of generic medications to come to market. The movement for regulatory action in this space appears limited. Therefore, any significant developments are only likely to come through bipartisan legislation.

Expected Result: Minimal changes.

Healthcare Costs Overall

One relatively underreported aspect of President-elect Biden’s healthcare plan was to aggressively use antitrust enforcement authority to potentially break up large hospital and physician practices. Whether a Biden administration ultimately uses this authority remains to be seen, but this has the potential to reduce healthcare costs overall, which could benefit employer plans.

Surprise billing is another area where a Biden administration could find common ground with a Republican-controlled Senate. In fact, there could be action on this front in the lame duck session of Congress. Even if there is not, the Trump administration recently issued an executive order directing federal agencies to address this through regulation. While the regulatory option would likely have very limited effect (perhaps only limited to Medicare and Medicaid), any of these paths could result in surprise billing rules. However, the economic effect of surprise billing legislation on health care costs overall is somewhat speculative at this point.

Expected Result: Perhaps some lowering of healthcare costs resulting in lower premiums/costs for employer plans.

COVID-19 Response

President-elect Biden’s COVID-19 response plan includes a call for more robust testing and contact tracing to keep the virus under control. He also proposes to make tests and treatment free to everyone. However, without Congressional agreement, a Biden administration’s ability to follow-through on these goals will be limited.

A Biden administration will likely continue the Trump administration’s focus on accelerating the development of vaccines and therapeutics. While some of the branding and key players may change, the fundamental goal of bringing these products to market as safely and efficiently as possible will continue.

The wild card here is the lame duck Congressional session that occurs before President-elect Biden is officially sworn in as President on January 20. With the 2020 election now in the review mirror, Congress may be freer to negotiate. Similarly, an outgoing President Trump may want a sweeping relief bill as a way of claiming a legacy for a robust and effective pandemic response. From a benefits perspective, those changes could include, among others:

  • an extension of allowing high deductible health plans (“HDHPs”) to cover telehealth on a first dollar basis without impacting health savings account (“HSA") eligibility,
  • COBRA subsidies for terminated workers, and
  • greater clarity around how plans cover out-of-network COVID-19 testing where the provider does not publicly post its prices (as required by the CARES Act).

Expected Result: Unknown, but if little is done in the lame duck Congressional session, little may be accomplished that is of direct impact to employers.

Conclusion

With an expected Biden presidency and a likely Republican-controlled Senate, the prospects of significant movement are slim on most fronts, but regulatory changes are likely. Employers should keep an eye on the regulatory front to see what changes a Biden administration proposes or undoes. 

If you have any questions, please contact your HUB Advisor. You can also view more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.