Congress’ 2023 health care and retirement to-do list: What’s on the regulatory agenda
At the committee level, there is a lot of bipartisan activity for health care reform for 2023 that includes PBM reforms and insulin caps in the commercial market, as well as regulatory guidance on the new retirement bill SECURE 2.0.
Although the Biden administration and Republican House continue to wrangle over raising the federal debt ceiling, the eventual outcome is not likely to have a significant impact on the benefits industry.
“There is nothing in the House bill directly affecting benefits policy, and we are not expecting anything along those lines,” said Geoff Manville, government relations leader for Mercer’s Law and Policy Group. “At the committee level, however, a lot of action is happening on a number of bipartisan health care priorities in both the House and Senate. The outlook isn’t clear right now for how all of this committee work might come together in a final package, because there aren’t many must-pass bills this year.”
Manville and several colleagues participated in Mercer’s online Washington policy update on April 27. Congress has an ambitious agenda for health care policy for the rest of 2023, he said, that includes:
- Prescription drug pricing proposals include pharmacy benefit manager reforms; speeding the time to bring generic drugs to market; and out-of-market caps for insulin in the commercial market.
- Possible legislation to increase competition and address provider consolidation includes site-neutral payment reform; restricting anti-competitive contract terms between providers and plans; and stopping provider billing practices that inflate costs.
- Mental health topics include expanding access to mental health and substance abuse disorder care; ensuring network adequacy; addressing health care workforce shortages; and strengthening mental health policy enforcement.
- Telehealth policy proposals include extending COVID-19 telehealth relief for high-deductible health plans paired with health savings accounts; and expanding and making permanent pandemic-related relief for standalone telehealth.
Retirement policy is expected to shift to regulators, Manville said. “It’s pretty quiet on the hill on retirement policy,” he said. “They pretty much cleared the decks in December with the passage of SECURE 2.0. It’s probably a good thing that things will be quiet in Congress, given that it’s going to take years of work on the regulatory side to implement SECURE 2.0.”
The industry has a lot to digest, said Matthew Calloway, a principal in Mercer’s Law and Policy Group.
“It has three times the number of provisions as the original SECURE Act,” he said. “We have provisions affecting DC and DB plans, with both mandated and optional changes. We are going to need a lot of regulatory guidance from the IRS and the Department of Labor.”
Although partisan fights over the debt limit and federal spending are not yet affecting retirement policy, the House budget bill cuts IRS funding, while the Biden administration budget seeks curbs on Roth conversions and caps on tax-preferred savings. Retirement-related revenue sources will continue to be attractive to both parties.
Among other retirement agenda items:
- Work will continue on a SECURE 2.0 corrections bill.
- Lawmakers are discussing implementation issues with regulators, who may enforce the law as intended.
- Bipartisan House legislation would permit 403(b) plans to invest in collective trusts.
- The final rule on environmental, social and governance investment is safe for now after the Republican repeal effort failed. Republican bills continue to target plan investments, while Democrats seek to codify Biden administration rules.
- Increased House oversight activity may spotlight concerns about the Department of Labor’s agenda. The ESG rule, fiduciary definition, the qualified professional asset manager proposal and cybersecurity may be targets.
Related: SECURE 2.0 compliance issues: Public sector DC plans seek ‘urgent guidance’ from IRS
Carol Silverman, a partner in Mercer’s Executive Law and Regulatory Group, provided an update on a proposal that would have far-reaching workplace implications.
“The Federal Trade Commission has proposed a sweeping ban on non-competes that would be a sea change outside of states that already ban them,” she said. “The FTC wants to prohibit companies from entering into non-competes with all workers and require companies to rescind existing non-competes. There would be an exception related to the sale of a business where the person who has a non-compete has at least 25% ownership.
“Comment on the proposal ended on April 19 with thousands of comments, with the U.S. Chamber of Commerce charging the FTC with overreach and threatening legal challenges, so we don’t have any predictions.”