Here are the benefit changes to expect this election season
The benefits space is changing: Consider the presidential candidates and their extraordinarily different views on how to fix the country’s healthcare system. The Affordable Care Act will be challenged for a third time in the U.S. Supreme Court. Surprise billing and drug prices are being tackled. So is the transparency about the quality of healthcare services and costs.
There are numerous changes awaiting HR professionals that may or may never materialize. Still, the anticipation of what could or should happen is probably turning some into insomniacs.
Meanwhile, HR professionals should not try to expect immediate changes, says James A. Klein, president of American Benefits Council.
“Just because somebody gets elected who has a dramatic change in mind doesn’t mean the person will succeed,” he says. “Even after someone wins, things won’t change immediately. The Affordable Care Act took a few years before it went into effect.”
Still, it’s hard for HR professionals to wonder and wait. Klein shares his perceptions about what HR professionals should expect in this highly charged political climate.
HRE: There’s so much legislative gridlock. Are any benefit changes occurring?
There’s a great deal more regulatory activity at the federal and state levels. So, the dynamics of how employee-benefits policy is being developed is undergoing some significant changes. It’s not limited to the fact that this is an election year. Broad changes are taking place.
Regulatory changes will impact retirement, drug prices and transparency disclosure on the part of healthcare providers and health plans. Efforts are being made to track down missing participants in retirement plans.
At the state level, states are trying to circumnavigate ERISA’s federal preemption features that permit benefit plans to be offered in a uniform way. For example, some states have adopted laws restricting telemedicine. In addition, there’s a myriad of state and local laws relating to paid leave. This is a real challenge for large employers that operate in more than one jurisdiction.
HRE: You mentioned a wild card that could produce significant changes.
Klein: The U.S. Supreme Court accepted to hear a case that arises out of Texas, which found the ACA’s individual mandate unconstitutional. This is the third time in 10 years that the U.S. Supreme Court has evaluated the ACA. That’s going to have extraordinary implications if it finds that the individual mandate is unconstitutional and that the entire law has to be invalidated.
HRE: Surprise billing is also gaining attention. What’s happening here?
Klein: Both parties are interested in surprise billing—when someone goes to a hospital in their network, has surgery, but then gets bills from different providers, like the anesthesiologist or radiologist who are out of network. The charges are extraordinarily higher than the regular reimbursement rates under their plan. Congress hopes to address it in one of two ways: develop a median benchmark rate that out-of-network providers are permitted to charge or send these cases to arbitration. Health sponsors and health plans are very concerned about the latter, saying it will lead to lengthy arbitration and high expenses.
HRE: Retirement is also a hot topic. How is Congress helping employees save more?
Klein: Sens. Rob Portman (R-Ohio) and Ben Cardin (D-Md.) are developing the next generation of retirement legislation. It will make it easier for employer plan sponsors to develop a plan and for employees to save more in their plans.
Congressman Richard Neal (D-Mass.), the chair of the tax writing committee in the U.S. House of Representatives, is also very committed to retirement security. He’s contemplating an approach that would require every employer to either sponsor a plan or have a payroll deduction into an individual retirement account for employees.
HRE: Are any members of Congress focusing on paid leave or drug prices?
Klein: Some are proposing a federal law that mandates a minimum level of days off for paid leave. States and localities can add additional requirements. But the primary objective for employers is consistency. Some are warming up to the idea of a federal minimum requirement to avoid having to comply with inconsistent laws.
Both parties want to say they’ve done something in the area of lowering drug costs but it’s unclear whether anything will cross the finish line before the election.
HRE: What key benefit issues still need to be addressed?
Klein: If health-reimbursement accounts take off—where employers put money into an account that employees use to purchase healthcare coverage in the individual marketplace—it could dramatically change the way employers provide healthcare coverage to workers.
Income inequality, the growth of the gig economy and providing retirement security for gig workers are all part of the next frontier. Benefit professionals are asking how they can provide health and retirement security to that growing segment of the working population. Both policy-makers and companies are going to be wrestling with these issues.