Donald Trump has secured a second term as president, with Republicans taking control of the US Senate and retaining their majority in the House of Representatives. This shift in leadership could lead to revisions in key policies like the Affordable Care Act (ACA), Medicaid, and more, redefining how organizations design and deliver benefits. For employers and HR professionals, staying informed on these developments will be critical for navigating upcoming challenges, seizing new opportunities, and effectively supporting their workforce. 

Potentially Impacted Employer Health Policies

As regulatory shifts continue to unfold, the following insights can help employers start preparing for potential changes that may impact their health plans and employee benefits strategies. 

The Affordable Care Act (ACA)

The ACA mandates that employers with 50 or more full-time employees provide affordable health coverage to full-time employees and their dependents. When it was created in 2010, it established health insurance marketplaces (also called exchanges) where individuals and families can shop for health insurance. It also expanded Medicaid, a government program that provides insurance to low-income individuals, allowing millions more Americans to qualify for coverage. Under the Biden administration, enhanced subsidies—financial assistance that helps lower-income individuals and families pay for insurance premiums—helped stabilize enrollment numbers and affordability for many. 

However, the ACA has faced challenges, such as rising premiums for some individuals, limited choices in certain areas, and ongoing political opposition. Some states have also struggled to expand Medicaid, leaving millions without coverage. Although Trump previously attempted to repeal the ACA, his administration is expected to modify the framework rather than dismantle it entirely. This shift could bring changes to the subsidies, Medicaid expansion, and the overall structure of the ACA to address its limitations while aligning with Republican priorities. 

Potential Changes To The ACA

The Trump-Vance administration may weaken the ACA by promoting alternatives that draw healthier, low-risk populations away from traditional ACA plans. These alternatives could include Association Health Plans (AHPs), which allow small businesses to group together for coverage, and expanded Individual Coverage Health Reimbursement Arrangements (ICHRAs), enabling employees to purchase insurance independently with employer contributions. 

Such moves could reduce costs for some employers but destabilize the ACA marketplace by increasing adverse selection, which occurs when healthier individuals opt for cheaper, less comprehensive plans (e.g., AHPs, ICHRAs). This leaves behind a higher proportion of sicker individuals in the ACA pool. As a result, insurance companies may have to raise premiums for those remaining in the ACA marketplace to cover the increased costs of insuring individuals with greater health needs. 

The Republican administration may also eliminate enhanced subsidies introduced during the Biden administration, affecting millions who rely on subsidized coverage. Catastrophic health plans—covering major medical expenses while excluding broader ACA protections—may see renewed support.  

Medicaid 

Medicaid, which provides health coverage to low-income individuals, has expanded significantly under the ACA. The ACA allowed states to extend coverage to more low-income adults, covering millions of uninsured Americans who were previously ineligible for Medicaid. The Biden administration encouraged this expansion and supported states introducing innovative programs, such as Medicaid buy-in options, which allow individuals who are not traditionally eligible for Medicaid to purchase Medicaid-like coverage at a market rate. However, ten states, including Texas, Georgia, and Florida, have yet to adopt Medicaid expansion. 

Potential Changes Medicaid

The Trump-Vance administration may implement block grants and per-capita spending limits for Medicaid. These measures would allocate fixed federal funding to states, allowing them to design programs tailored to local needs. For example, a state with a high population of elderly individuals might prioritize long-term care services, while a state with more low-income adults might focus on expanding access to primary care. 

However, this approach could lead to reduced benefits or stricter eligibility criteria if the fixed federal funding doesn’t keep pace with growing healthcare needs or costs. During economic downturns, states could face higher demand for Medicaid as more individuals become eligible due to job losses, but with limited federal funding, they may have to cut services or eligibility. Employers with part-time or low-wage workers who rely on Medicaid may face increased pressure to fill gaps in coverage. 

Prescription Drug Regulations 

Prescription drug costs have been a hot-button issue, particularly for seniors on Medicare. Recent laws, such as the Inflation Reduction Act of 2022, have introduced significant changes to reduce the financial burden on older Americans. These measures include capping out-of-pocket expenses for certain medications, such as insulin, and allowing Medicare to negotiate drug prices directly with pharmaceutical companies. This means that Medicare can now work with drug manufacturers to secure lower prices for essential drugs, potentially making medications more affordable for seniors. These changes aim to help those with high drug costs, including treatments for chronic conditions like diabetes and cancer, by reducing their out-of-pocket spending and potentially lowering premiums. 

Potential Changes To Prescription Drug Regulations

The Trump-Vance administration is expected to scale back Medicare’s drug price negotiation capabilities, favoring market-driven approaches to reduce costs. Efforts to improve price transparency, including requiring drug manufacturers and pharmacy benefit managers (PBMs) to disclose pricing information, may gain traction. Additionally, Republicans may push for reforms to PBM practices, such as preventing exclusive pharmacy networks or steering patients toward PBM-owned pharmacies, to foster competition and lower costs. 

Paid Family Leave

Paid family leave has traditionally been addressed at the state level, with federal policy limited to unpaid leave under the Family and Medical Leave Act (FMLA). The FMLA allows eligible employees to take up to 12 weeks (about 3 months) of unpaid leave per year to care for a newborn, adopted child, or family member with a serious health condition, or to recover from their own serious illness, without risking job loss. 

Potential Changes To Paid Family Leave 

The Trump-Vance administration is unlikely to introduce a national paid family leave program. Instead, Republicans may promote tax incentives or credits to encourage voluntary employer adoption of paid leave benefits. This approach aligns with Republican priorities of reducing federal mandates while incentivizing businesses to offer competitive benefits. 

Health Accounts 

Health accounts like Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs) offer tax-advantaged ways for employees to manage healthcare costs. Republicans have prioritized these accounts to expand consumer choice, giving employees greater control over how they spend on healthcare, and to reduce overall healthcare costs by shifting some responsibility to consumers. 

Under the Biden administration, health accounts saw some adjustments, including higher contribution limits for 2025. HSAs will now allow individuals to contribute up to $4,300 for self-only coverage and $8,550 for family coverage, while FSAs increased to a $3,300 limit. The IRS also issued clearer guidelines to ensure these funds are used only for qualified medical expenses, limiting misuse for non-medical items. 

Potential Changes To Health Accounts

The Republican administration is expected to expand contribution limits for HSAs and FSAs, making it easier for employees to save for medical expenses. Trump may also broaden the scope of allowable expenses, such as telehealth services, chronic condition management, and prescription drug coverage. 

ICHRAs, which allow employees to purchase insurance independently with employer contributions, are likely to receive further support. Unlike traditional group health plans, ICHRAs provide employees with more flexibility by letting them use the contributions for purchasing individual health insurance plans on or off the exchange. This model is particularly beneficial for businesses that may not be able to afford traditional group health insurance. Under the Trump administration, ICHRAs were expanded to provide greater support for employees in choosing their own coverage, with the potential for increased employer contributions to further ease the burden of healthcare costs. 

Mental Healthcare 

The Mental Health Parity and Addiction Equity Act requires equal coverage for mental and physical health services. Enforcement and access gaps have historically hindered its effectiveness; however, the Biden administration finalized a new rule in December 2024 that requires employers to strengthen mental health coverage by January 2026. This regulation addresses long-standing disparities in access to mental healthcare by expanding provider networks and reducing the need for out-of-network services. 

Potential Changes To Mental Health Care 

The Trump-Vance administration is expected to emphasize telehealth as a key strategy for improving access to mental health services. By promoting the expansion of telehealth coverage, Republicans aim to reduce barriers to mental healthcare, offering more convenient, cost-effective solutions that could supplement traditional in-person services. Rather than imposing additional regulations, the administration is likely to encourage market-driven, innovative approaches to mental health, allowing employers more flexibility in providing these services to employees. 

Future Changes: Other Possible Healthcare Changes On The Horizon 

Beyond immediate potential policy changes, several broader healthcare shifts could also influence employer health plans and employee wellness strategies: 

• Obesity management: Robert F. Kennedy (RFK) Jr., nominated as Secretary of Health and Human Services, has expressed skepticism toward pharmaceutical interventions for obesity (e.g., Ozempic and other GLP-1 drugs), advocating instead for lifestyle and dietary changes. Employers might anticipate policies that favor nutrition and exercise programs over pharmaceutical treatments for obesity. 
• Vaccine policy: RFK Jr. has publicly advocated for reassessing vaccine safety and voiced doubts about current vaccine standards. His appointment raises the possibility of changes in federal vaccine guidelines. Employers should monitor these developments to ensure compliance with updated public health directives.  
• Expansion of telehealth services: Bipartisan support for telehealth has gained traction, particularly after the COVID-19 pandemic. The Trump-Vance administration is expected to continue policies promoting telehealth expansion and reimbursement parity, especially for mental health services. Integrating telehealth into wellness programs can make healthcare more convenient and accessible for employees. 
• Transparency in medical practices and costs: Dr. Marty Makary, a prominent advocate for transparency in healthcare and nominee for FDA commissioner, has previously criticized medical overpricing and unnecessary procedures. Employers should prepare for potential regulations requiring greater clarity in medical pricing and review their health plans to align with transparency initiatives. 
• RFK Jr.’s crackdown on the FDA: RFK Jr. has called for an overhaul of the FDA’s rules on food additives, specifically targeting the “generally recognized as safe” (GRAS) process. Critics argue this process allows companies to self-certify the safety of certain additives without rigorous FDA oversight, leading to chemicals being used in foods that are banned in other countries. Employers may see greater scrutiny over food and beverage options in the workplace if new regulations limit certain additives. 
• Abortion and transgender healthcare: While Trump has pledged not to sign a nationwide abortion ban, his administration could take steps to make the procedure harder to access, such as revising FDA guidance that allows abortion pills to be sent through the mail. Additionally, Trump has promised to roll back access to gender-affirming healthcare for transgender individuals. Employers should prepare for potential changes to reproductive and gender-affirming healthcare benefits. 
• Supply chain resilience: Trump has expressed strong support for ramping up domestic production of medical products, criticizing US reliance on drugs from China. During his first administration, he backed companies manufacturing domestically and could push for tax incentives to bolster domestic production of medical supplies. Employers might benefit from a more stable supply chain but should watch for potential cost implications as policies incentivize domestic manufacturing.