What do the election results mean for employer-sponsored benefits? That’s a tough question to answer. Aside from occasional mentions of Medicare and Social Security, benefits-related topics weren’t prominent in the 2024 presidential campaigns. President-Elect Trump’s health messaging focused on making health care better and less expensive as well as minimizing fraud and waste through competition. Retirement plan–related priorities are unclear except for some speculation on tax treatment of retirement savings.

In recent years, new presidential administrations typically impose a regulatory freeze to review regulations in their early stages. Regulations can be withdrawn, essentially reversing what the previous administration had done. Based on what Trump did in his first term, and what Biden did, we have clues about what regulations could change.

With the news cycle rapidly changing, benefit professionals will need to stay nimble. This blog covers some possible regulatory priorities.

Prescription Drugs

A controversial provision of the Inflation Reduction Act was enabling Medicare to negotiate drug prices directly. Those in opposition say that reduced drug company revenue could stifle innovation. The $2,000 annual cap on drugs for Medicare Part D beneficiaries is expected to continue as scheduled. The Trump platform didn’t address PBM reform specifically, although price transparency is expected to be a method to lower costs. Other efforts to lower drug prices are expected to continue. Some potential actions are:

• More prescription drug price caps
• More prescription drugs available over the counter
• Lower reimbursements to doctors for some infused drugs
• Using trade policy to force other developed countries to increase what they pay for drugs
• International reference-based pricing (e.g., reference the European market price).

Health Plans

ACA could be weakened in a variety of ways. If ACA marketplace premium tax credits expire, a lower government subsidy could increase premiums and the number of uninsured people. Regarding ACA’s employer mandates, the Trump platform addressed eliminating the employer shared responsibility requirement or reducing its penalty to $0 as well as eliminating or simplifying employer reporting requirements.

Two alternative health plans could return based on Trump-era regulations reversed during the Biden era.

1. First is longer-lasting short-term health insurance plans. Short-term plans don’t have ACA’s consumer protections but are less expensive. A rough comparison of the different durations (with renewals and extensions) is that a short-term policy could last approximately four years under the Trump administration and only four months under the Biden administration.
2. Secondly, association health plans that allow unrelated small employers to pool together in offering health insurance could be revived.

Individual coverage health reimbursement arrangements (ICHRAs) are expected to continue and possibly become more widely adopted. ICHRAs emerged during the Trump era and were supported under the Biden administration.

Other health plan coverage changes under the next Trump administration could be:

• Restricting telehealth prescribing and/or mailing of abortion medications
• Requiring health plans to cover in vitro fertilization (IVF) treatments (currently, fertility benefits coverage is a state law issue)
• Reversing rules that prohibit federally funded providers and insurers from discriminating based on gender identity.

Retirement

Promoting employee stock ownership plans (ESOPs) is expected to continue being a DOL priority.

At least three DOL retirement plan regulations could be abandoned.

1. Removing barriers to considering environmental, social and governance (ESG) factors in investing (November 2022)
2. Retirement security rule addressing rollovers from ERISA plans to IRAs and other fiduciary investment advice (April 2024)
3. Qualified professional asset manager (QPAM) eligibility (April 2024)

Possible legislative actions affecting retirement plans include pre-tax treatment of retirement savings becoming after-tax. It’s unclear how likely this would be, but tax legislation will be a priority in 2025 as 2017’s Tax Cuts and Jobs Act is set to expire at the end of 2025. Extending those 2017 tax cut provisions and paying for them could mean cutting other tax incentives, specifically pre-tax treatment for retirement savings. Rothification, meaning mandatory after-tax deferrals, was avoided in 2017 but could come up again in 2025.

Other Benefits: Tax Incentives for Paid Leave and Child Care Assistance

During the first Trump administration, paid leave and child care policies were explored. Tax law is seen as the main method of possible bipartisan support. For example, Trump supported a policy that would allow parents to get an advance of up to $5,000 in child tax credits to use toward leave. The 2017 tax law provided temporary tax incentives for employers to offer paid family leave that will expire in 2025 (unless extended). Boosting existing tax credits to employers for providing child care benefits to workers is possible.

Employment Law and Workplace Issues

Peripheral to benefits, Trump might shift away from Biden-era workplace regulations. The following could be reversed or weakened.

• EEOC protections for pregnant and LGBTQ+ workers
• Definition of independent contractor (for gig workers)
• Overtime pay threshold (Note, on November 15, 2024, a federal judge decided that DOL exceeded its authority and blocked this rule nationwide.)
• Prevailing wage for infrastructure projects
• OSHA heat stress standards
• Federal contractor guidance on DEI trainings

In response to federal deregulation, states may establish worker protections for their residents.

Looking back at Trump’s first term and current signals, benefit professionals can expect a rapidly changing news cycle and administrative pushes to rapidly change existing policies. Stay tuned—We will continue to break down what this means for benefit professionals.

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