What the Election Outcome Could Mean for Employee Benefits

Bruce Ashton, partner at Drinker, Biddle and Reath LLP, said if Hilary Clinton wins the election, the Senate may flip to Democratic control, but the House won’t. The fiduciary rule will go into effect; Obamacare stays, but Clinton will try to make tweaks; and there will be ramped up enforcement on service providers. Ashton said it may be difficult for Clinton to make tweaks to Obamacare if legislation is needed; Congress may fight her. He also noted that enforcement on service providers will not start immediately, but will happen over the course of her administration.

Ashton shared what Democrats have promised:

• Fight against any attempt to roll back the fiduciary regulation;
• Fight to protect pension benefits in multiemployer plans;
• Defend the rights of workers to collect their defined benefit (DB) pensions and make sure they get “priority and protection” when plans are in distress; and
• Fight efforts to weaken Social Security and, in addition, expand it.

As for health care, Democrats have promised to:

• Crack down on “runaway” prescription drug prices;
• Fight efforts to roll back women’s health and reproductive rights;
• Create a “public option;”
• Permit those older than 55 to opt in to Medicare;
• Empower states to create waivers under the Affordable Care Act (ACA) to develop locally tailored approaches to health coverage; and
• Repeal the excise tax on high-cost health insurance.

According to Ashton, if Donald Trump wins the election, Republicans will probably keep both the Senate and House. Obamacare will be gone. The fiduciary rule will be gone. Ashton questioned whether anything would replace them.

Ashton shared what Republicans have promised:

• Cut taxes, which may reduce the incentive to save for retirement through workplace plans;
• Consolidate and reform multiple different retirement savings provisions in the Internal Revenue Code—Ashton said this will likely impact 403(b)s and 457s the most;
• Explore more general savings vehicles outside the employer based system and possibly in addition or lieu of IRAs.

As for health care, Republicans have promised to:

• Repeal Obamacare; replace it with an approach “based on genuine competition, patient choice, excellent care, wellness and timely access to treatment;”
• Return to the states the regulation of local insurance markets, limit federal requirements and promote a “robust consumer market;”
• Cap non-economic damages in medical malpractice suits to lower health care costs;
• Reform the FDA – Ashton says the idea is that the Food and Drug Administration is putting lives at risk by delaying the development of certain items.

“These are my thoughts, but anything could happen,” Ashton said, noting that “Whoever wins will have a significant impact on the benefits industry.”