Former President Donald Trump has won a second presidential term. Employers can expect a number of changes to employee benefits under the new administration. Although the specific policy objectives that are enacted remain to be seen, employers may look to the campaign policies that Trump ran as well as the initiatives that Trump took during his first term in office, as an indication of what is to come.
Furthermore, the Republican party will have majority control of the U.S. Senate and retain a narrow margin in the U.S. House of Representatives, which can significantly impact legislation passed in the upcoming term.
This article summarizes positions on employee benefits-related topics from Trump’s official platforms, public statements on relevant issues and previous public policy records. Any insights are purely speculative and do not indicate or predict future policy.
During his first term, Trump’s administration pursued attempts to replace or partially repeal the Affordable Care Act (ACA). A full repeal or replacement is unlikely in the upcoming term, as the ACA has grown in popularity and was not a campaign talking point like it was in 2016. However, the Trump administration will make decisions that will impact the future of the ACA.
The Biden administration passed the Inflation Reduction Act of 2022, which was largely focused on COVID-19-related relief but also included ACA subsidies. The subsidies cut premiums for millions of plan participants and increased overall enrollment. These subsidies were extended for three years through the end of 2025. Unless Congress chooses to extend them in 2025, they are set to expire at the end of the year. Industry experts suspect that the enhanced subsidies on the ACA that are set to expire at the end of 2025 will be less likely for renewal with a Trump administration. Without the subsidies, enrollment will likely suffer as premiums skyrocket. Additionally, the new administration could alter the ACA in other ways, such as eliminating employer mandate penalties or simplifying the reporting requirements. While large-scale federal legislation does not appear to be likely, the new administration may impact the future of the ACA on a smaller scale.
According to Trump’s platform, his administration will “protect Medicare.” The platform also plans to shift resources back to at-home senior care. During Trump’s previous term, enhancements were made to Medicare Advantage plans, including increasing access to telehealth and expanding supplemental benefits for seniors with chronic diseases.
In 2020, the Trump administration capped insulin to $35 per month through 2023 for qualifying Medicare Part D plans. Not all Part D plans participated. Next, the Biden administration passed a broader $35 insulin cap for Medicare participants through the Medicare Drug Price Negotiation Program. The Trump platform has indicated it will work to lower health care costs for health care and prescription drugs. While the Medicare program negotiations are currently set to continue, many are speculating about how these price negotiations might change under a Trump presidency.
Medicaid is the third-largest program in the federal budget. While Trump campaigned on preserving Social Security and Medicare, Medicaid was not a key talking point for his campaign. Given Social Security and Medicare cuts are unlikely, reductions in Medicaid spending may become necessary to fund Trump’s tax cuts. Trump has previously supported efforts to cap or reduce Medicaid financing. With a narrowly Republican-controlled Congress, Trump may have a path to making significant changes to the program.
As prescription drug costs remain a top concern for many Americans, the Trump campaign would like prescription drug transparency and competition. It has also expressed support for reforming the practices of pharmacy benefit managers (PBMs), which has received bipartisan support. Trump previously targeted PBMs with a plan to eliminate the rebate business structure but did not pursue the policy of ending rebates during his first term.
Under the IRA, the Medicare Drug Price Negotiation Program allows the federal government to negotiate directly with drug manufacturers to improve access to some of the costliest brand-name drugs. The discounts from the Medicare Drug Price Negotiation Program for 10 drugs covered under Medicare Part D will go into effect beginning Jan. 1, 2026. The negotiations will increase to 20 drugs in 2029. While these price negotiations are currently set to continue, many are speculating about how these price negotiations may differ with a Trump presidency going forward.
The Trump platform opposes late-term abortion while supporting policies that advance prenatal care and access to birth control and in vitro fertilization. Furthermore, Trump views abortion as an issue for states to decide. Trump has stated that he is against a national abortion ban.
While federal legislation related to abortion would require a bill passed by Congress, President Trump may choose to effect change through executive order, possibly impacting the delivery and distribution of abortion medications. “Abortion pills” commonly refer to two different medicines taken to end a pregnancy: mifepristone and misoprostol. The Guttmacher Institute estimated that medication abortions accounted for 63% of all abortions in the United States last year. The organization noted that that figure doesn’t include self-managed medication abortions taking place outside of the formal health care system or abortion medication mailed to people living in states that have total abortion bans.
Trump could decide to undo presidential actions from Biden intended to expand access to abortion services. To date, Trump’s campaign hasn’t offered a clear indication that it will pursue such action.
Trump’s campaign showed support for the three main family policies: paid leave, child care and the child tax credit. Specifically, he favors offering paid family leave, reducing the cost of child care and increasing the child tax credit. The child tax credit has the most bipartisan support of the three major family policies. The Trump campaign provided detailed plans to grow the child tax credit, expressing that only parents who meet income tax requirements should receive a credit.
The latest election results may bring significant changes to employee benefits for the next four years and possibly beyond. While only potential implications from a second Trump administration are highlighted here, the recent state and local elections can also significantly impact benefits providers across the country and the employers with which they work.
Any suggested developments are purely speculative, as all changes to employee benefits and health care will require legislation, presidential action or agency activity. Employers should continue to monitor the impact of the Trump administration, as well as state and local activity, to stay apprised of potential changes.
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