The midterms are over: What do the results mean for health care?

After months of contentious campaigning, the 2022 midterm election is finally in the rearview mirror. With the Democrats retaining the Senate and Republicans winning control of the House, gridlock is the likely outcome, as division between the two parties continues.

Despite the Democrats’ better-than-expected election performance, President Biden will be challenged to get legislation passed in the divided Congress. Battles over federal funding and Congressional investigations will create a combative environment in which virtually no significant legislation will make its way to the president’s desk. As a result, we are far more likely to see action in the form of new regulations enacted by various agencies than laws emerging from the halls of Congress.

That said, we do expect to see legislative impact in the areas of mental health and telehealth. Both the House and the Senate recently passed mental health bills and as expected, some elements of those bills were included in the Consolidated Appropriations Act of 2023 passed by the House on December 20, 2022.

As the new Congress gets to work, employers will have to respond to several items, including:

COVID emergency orders expiring

The COVID-19 Public Health Emergency, which has been managed by the Department of Health and Human Services (HHS), is set to expire on January 11, 2023. Throughout the pandemic, the cost of COVID-19 testing, vaccine and treatments has been highly subsidized by the federal government. In the absence of an extension of the Public Emergency, funding is likely to dry up and the cost of those services now will be borne by the insurer and ultimately the employers.

Likewise, the COVID-19 National Emergency is expected to end on February 28, 2023. Declared by President Trump and extended by President Biden, it provided deadline relief for HIPAA special enrollments, COBRA enrollments and payments and health care flexible spending account claim submissions. People had longer windows, more flexibility and longer grace periods to make payments or changes to their benefit plans. With the end of the National Emergency, employers will revert to what they did prior to its declaration.

Nondiscrimination in Health Programs and Activities rules

Employers are waiting for final guidance on the Nondiscrimination in Health Programs and Activities rules, proposed by HHS in early August. This would reinstate and expand previous rules pertaining to Section 1557 of the ACA, which prohibits discrimination based on race, color, national origin, sex, age or disability in covered health programs or activities. The rule reinstates Notice of Nondiscrimination requirements, creating an additional administrative burden on employers.

Transparency in Coverage rules

Employers will need to execute on the continued adoption of Transparency in Coverage rules, which are intended to “require most group health plans and health insurance issuers in the group and individual market to disclose price and cost-sharing information to participants, beneficiaries and enrollees.” The Centers for Medicare & Medicaid Services (CMS) delayed enforcement of the rules until July 1, 2022, for plan years effective July 1, 2022. Since most, but not all, employers have a 1/1 plan year, they should be in compliance by January 1, 2023. Most employers are relying on their insurers, carrier partners or pharmacy benefit managers to help comply with these requirements, but the ultimate responsibility is on the employer.

Changing and inconsistent health care access

With the overturning of Roe v. Wade, employers will be challenged by newly enacted limits on abortion, along with reproductive health and transgender-inclusive care. While these hot-button issues have received substantial coverage in the national media, they are likely to be resolved in the state legislatures and the court system. This will be particularly challenging for multistate employers. ERISA allows certain exemptions for employers to offer a consistent benefits package across the country, but employers are finding that regulations at the state or possibly local level mean their employees don’t have equal access to health care services.

Most abortions are now banned in at least 13 states, leaving employees in those states to find alternatives for accessing such care. The same holds true with transgender care. With states like Florida making it a crime to treat anyone under the age of 18 for transgender care, employers are investigating how they can provide equity to their employee base. Employers are looking at how they can cover medical procedures and provide travel assistance without running afoul of state legislation.

Medicare Advantage payment reform

The newly seated Congress is likely to address federal Medicare Advantage payment reform in earnest as they seek to remove financial excesses that have built up in the system over time. This issue has been top-of-mind for some time in Congress and the federal agencies, but a recent federal court decision and subsequent New York Times article brought Medicare Advantage payment reform front-and-center for the Department of Justice and into the broader public consciousness.

Employers can expect federal action aimed at recouping overpayments from specific plans and directly addressing broader acceptable plan practices going forward. In addition to addressing potential health plan fraud, this initiative is especially important given the current federal debt position and expected ongoing budget deficits and is likely to be one of many initiatives undertaken to reduce federal spending.

ACA public marketplace federal subsidies

The new Republican House has also set their sights on the Affordable Care Act (ACA) subsidies that were extended in the Inflation Reduction Act (IRA) as part of the American Rescue Plan Act of 2021 (ARPA) through 2025. ARPA increased the amount of the subsidies and the number of people eligible to receive them, resulting in assistance to almost 90% of those who enrolled in coverage on the health insurance marketplaces in 2022.

The House may include these subsidies in their potential across-the-board reductions to the federal budget as they seek to reduce federal spending, federal debt and inflation. Employers will need to track developments and review their health plan coverages going forward to ensure they meet the minimum ACA value and affordability requirements and determine how their position may change if the ACA subsidies are reduced in some fashion. Any changes to ACA subsidies may mean employers could see more movement of employees between the ACA marketplace and employer group coverage.

Related: Abortion, health care costs influenced voters in midterm elections, survey finds

Little in the way of new legislation is expected to emerge from the halls of Congress over the next two years, but that doesn’t mean employers can turn a blind eye to the happenings in Washington. Lingering proposals, regulatory action and 11th-hour deals will create significant changes. Carefully monitoring and being prepared to act will prove necessary moving forward.

Sara Taylor, Health Solutions Strategy Leader, Global Solutions & Services, Alight Solutions