Editor's Note
Are Changes to Benefits Coming?
I don't know if the article post was written before the murder of the United Health CEO, but it likely was. The public frustration with healthcare and health insurers has bubbled up, boiled over and now there's a big political mess around healthcare.
On one hand, it's an opportunity to make positive change to improve healthcare in the US. On the other hand, I'm not sure that's ever really been the plan. The stated goal has been to undo the ACA with "something better."
The details on "something better" are a little squishy. This is partly because there are a lot of conflicting interests involved. Insurers have a lot of money and invest it in politics. And insurance companies are often publicly traded companies whose purpose is to make profits for the shareholders. The way they do that is by collecting premiums and investing them, then keeping as much money invested for as long as possible, which often looks like denying or delaying paying claims.
Employers are the biggest client of health insurers and employers generally want to reduce their healthcare spend. So do their employees. The only way to really do that is to make it cost less or for the government to offset some of the cost through tax benefits.
So far, nobody has been able to figure out how to make it cost less and our current model is not designed to do that. Right now, doctors are paid by insurers either based on how many things they do that can be billed for or by receiving a flat fee based on how many patients they have with some extra bump for procedures. To keep the lights on, doctors either have to do a bunch of stuff they can charge for or have a bunch of patients they hope don't actually need care. Neither is an effective way to promote the health and wellbeing in humans.
It's also not a good business model for doctors who have to hire people to spend extraordinary amounts of time fighting about coverage and payment with the insurers.
There is a different model in some places. Kaiser Permanente is both an insurer and the care provider. At Kaiser everyone's interest is aligned because nobody is trying to make profits from premiums by denying care. Instead, the way they control costs is by using their purchasing power to reduce costs, reducing friction in the system, collecting data, and investing in research, education, preventative care, and early detection. It's in their financial interest to keep people healthy and to provide care that improves outcomes.
Most importantly, there is no conflict of interest between the people providing care and the people who pay them. Everyone benefits, especially patients.
I have Kaiser and generally really like it. It's not perfect. If you need something outside of protocols, it takes a little extra work to get the attention of the right person or find the secret door to further options. Still, I know that Kaiser and my doctor want the best for me and want me to be cared for because it's good for everyone.
But it's unlikely we'll ever get to a universal Kaiser type model because it would eliminate for profit health insurers.
This is an interesting discussion about what to expect with some excellent information and points. I also know that trying to translate political rhetoric to practical reality, especially in healthcare, is fraught.
- Heather Bussing
Details
Although President-elect Trump provided few, if any, specific details surrounding his proposed changes to policies affecting employee benefits during his 2024 presidential campaign, employers and employees should expect a loosening of regulation across government agencies during a second Trump presidency. This will likely bring significant, employer-friendly changes to employment benefits, especially for employee health care plans. They should also anticipate changes in tax and investment policies that may affect retirement benefits, along with the implementation of regulations that make it easier for employers to classify individuals as independent contractors.
Potential Changes
Trump, with the support of a Republican majority in both chambers of Congress when he is expected to take office in January, will likely seek to weaken provisions of the Affordable Care Act (ACA). For example, Trump may seek to eliminate the employer shared responsibility requirement or reduce the penalty for noncompliance to $0 — a policy position that he has included in his prior campaign platforms. Currently, the employer shared responsibility provisions require employers with at least 50 full-time and full-time equivalent employees to offer affordable minimum essential coverage. Trump may also choose to support ending or reducing the ACA’s individual health premium tax credit, which was expanded in 2021 under the American Rescue Plan Act and essentially offers government subsidies to health insurance providers for the purpose of reducing insurance premiums for consumers. Reducing or eliminating the health premium tax credit would almost certainly increase premiums for individuals insured through an ACA health insurance exchange.
The incoming Trump administration has also signaled support to change tax policies that further incentivize employees to contribute to their employers’ 401(k) and 403(b) plans. Similar legislation — including the 2019 SECURE Act, signed by President Trump, and the 2022 SECURE 2.0 legislation, signed by President Biden — has seen bipartisan support. Trump also vowed, in a February 2023 campaign video, to repeal the Department of Labor 2022 final rule, which allowed but did not mandate employee retirement plan advisors to consider environmental, social and governance factors in their investment choices. Similarly, we expect the Trump administration to repeal the recently published final rule titled the “Retirement Security Act,” which is also referred to informally as the “fiduciary rule.” This rule has been the subject of much debate for several years and has historically been revised coincident with changes to Presidential administration.
Finally, Trump will also likely direct the Department of Labor to implement a rule, proposed during the first Trump administration, that would ease the requirements for employers to classify workers as independent contractors. The first Trump administration directed the Department of Labor to enact a rule enshrining the test set forth in the National Labor Relations Board’s 2019 decision in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019), to determine whether an individual is an independent contractor. Notably, the SuperShuttle standard tends to favor classifying “gig economy” workers (e.g., Uber drivers) as independent contractors. However, the Biden administration never implemented the proposed rule. The implementation of this proposed rule could mean that the millions of gig workers throughout the U.S. are not entitled to employee benefits or the more-robust employment-related legal protections applicable only to “employees.”
