Based on current election results, it looks like the most probable outcome of the election is a divided government. No major legislative changes are expected should this hold true. However, this does not mean things will remain the same for the foreseeable future. Here are the main events and issues Research and Compliance is currently monitoring:

1. Affordable Care Act

The Supreme Court will hear the current ACA challenge this week about whether the ACA is still constitutional even though the individual mandate has a $0 penalty. A decision from the Court can come as soon as February, but there is also a chance we will not have a decision until the spring.

  • Things should remain the same in the employee benefits world if the Court either decides that the ACA is still constitutional or that the individual mandate is unconstitutional while the rest of the ACA remains valid.
  • However, if the Court strikes down the entire ACA as unconstitutional, there will be massive implications for employer sponsored health plans. The reaction of the legislative and executive branches to a decision that invalidates the entire ACA will depend, in part, on the composition of those branches. We may see some sort of compromise legislation passed, regardless of what the government looks like, because ACA provisions like the prohibition of pre-existing condition exclusions are immensely popular across the country and political spectrum.

2. Executive Maneuvers from President-elect Joe Biden

Operating under the assumption that President-elect Joe Biden is sworn in on January 20, 2021, there are a few possible executive maneuvers we will be looking for:

  • Employee premium reimbursement plans were prohibited by the agencies under the Obama administration as being noncompliant under the ACA. They were then revived by the agencies under the Trump administration in the form of ICHRAs. It is unclear where ICHRAs will stand with a Biden administration, but they may not fare well considering the Obama administration’s position and that they have not been around long enough to gain major market traction.
  • New transparency rules were released at the end of October that will require, among other things, that 1) group health plans provide in-depth personalized pricing information to plan participants through an online database for an initial list of 500 different medical services by January 1, 2023; and 2) group health plans must publicly disclose information such as in-network negotiated rates and the negotiated rates for prescription drugs covered under the plan by January 1, 2022. There are various industries that dislike the new transparency rules (resulting in some litigation) and it is unclear whether lobbyists for these industries will have enough pull with a Biden administration to have them scrapped or substantially altered.
  • Further, plan sponsors are likely to see an increase in costs from TPAs and carriers. Plan sponsors are also likely to shoulder the burden of establishing and maintaining the new databases, which may create some momentum behind scrapping or altering the transparency rules.

In Addition

It should also be noted, the agencies state that the authority for the new transparency rules comes from a portion of the ACA. That means the transparency rules will not come to fruition if the ACA is invalidated in its entirety by the Supreme Court.

  • It is common for the regulatory agencies to change their focus with a change in administration. President-elect Biden did not run on a platform of deregulation and it is possible employers will see an increase in investigative and enforcement actions by the regulatory agencies under the various health and welfare statutes, rules, and regulations.

This document is provided for general information purposes only and should not be considered legal or tax advice or legal or tax opinion on any specific facts or circumstances. Readers are urged to consult their legal counsel and tax advisor concerning any legal or tax questions that may arise.


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