"Health care costs and regulatory policies are a major concern for advisors and employers, especially with the constant changes in the political landscape," says Matthew Kim, CEO of SureCo, a leading administrator of individual coverage health reimbursement arrangements (ICHRAs). "The outcome of this election will significantly impact policy making in areas such as the Affordable Care Act, Medicare, Medicaid and drug pricing. There are also a few areas that could help address rising health care costs, such as price transparency, further negotiation of prescription drug prices, and enhancements to the ACA that would allow Americans to have more health care options to choose from."

Joel Kopperud, senior vice president of government affairs for the Council of Insurance Agents & Brokers (CIAB), is tracking several key issues that will directly affect the industry.

"First, we're focused on tax policy," he says. "The expiration of the Tax Cuts & Jobs Act will bring about large-scale tax reform discussions, no matter who takes the White House or who controls each chamber of Congress. Preserving the 199A provision in the TCJA is a top priority for our members. Removing or limiting the employer-sponsored health insurance premium tax exclusion is another issue of great concern to our members, their clients and their employees. In our view, it can't be overstated that messing with the employer-sponsored tax exclusion would have severe negative effects on the U.S. health care system."

Prescription drug costs represent another top priority for CIAB, Kopperund says.

"More transparency is needed if we want to truly understand a very opaque pharmacy delivery chain," he says. "Right now, employers are operating virtually in the dark when it comes to pharmacy benefit managers, how they are compensated, how formularies are created, and how patients are steered toward certain pharmacies."

Transparency requirements included in the Consolidated Appropriations Act in 2021 barred group health plan fiduciaries from contracting with service providers unless those providers fully disclosed any revenue they would receive that relates to the health plan.

"The language clearly included employee benefits agents and brokers, as well as PBMs and TPAs, but the largest PBMs have taken the position that they are not subject to these requirements and are not complying with the provision," Kopperud says. "There are currently bills in both the Senate (S. 1339) and House (H.R. 5378) that would solve this problem by explicitly clarifying that the provisions apply to PBMs and TPAs that service the plan."

Joe Boyle, president of regulatory solutions for Penstock Group, sees both challenges and opportunities in the election outcome.

"Newly elected officials are likely to enact federally and state-mandated benefit changes, which will result in cost implications on members and potential off-cycle shifts and midyear changes affecting internal business processes," he says. "Despite the complexities this will cause, I am excited for the opportunity to create and support new insurance products that may emerge as a result of alternative health care options provided by insurers in response to new policies."

However, in a race that has been dominated by discussion of issues like inflation and border security, neither presidential candidate has yet offered detailed proposals on issues affecting the benefits industry.

"The current presidential race has been rather unique compared to prior years because of the lack of major policy proposals — or explicit detailing of future plans — from either of the main contenders," Kim says. "Historically, topics like health care can dominate political debate due to their potential for sweeping reforms, but health care has not been a central theme in this election. Some of the key issues that need to continue to be addressed include the sunsetting of expanded ACA subsidies in 2025, drug pricing, and cost transparency."

Despite the lack of specifics, both candidates have vocalized their positions on health care during the Presidential Debate:

Kim offers his interpretation of the two positions:

"Donald Trump, during his presidency, emphasized reducing federal regulations and promoting free-market solutions in health care," he says. "His administration focused on repealing and replacing the ACA while expanding the use of Health Reimbursement Arrangements, including ICHRA.

"Kamala Harris, as part of the Biden administration, supports the ACA and its expansion. Harris advocated for universal health care and, during her 2020 presidential campaign, endorsed 'Medicare For All' before shifting to a more moderate position of supporting an expanded public option. She prioritizes government involvement in ensuring affordable health care for all Americans." 

The makeup of Congress will go a long way toward determining what the new president will be able to accomplish. Yet, like the presidential election itself, the races for control of the House and Senate remain too close to call.

"On the Senate side, it looks like Republicans have a slight edge," Kelly says. "The most Democrats can reasonably hope for is 50 seats, and it's going to be tough for them to get that 50th seat. On the other hand, Democrats may have a slight edge on the House side. Republicans have a very narrow majority, and you wouldn't need much of a swing for Democrats to take over. But it's very close, and the most likely outcome is that you don't get all three going to one party."

Kopperud agrees. "It's really a mixed bag," he says. "What we're focused on is balance of power and how that will impact our members and their employer clients. Ultimately, a divided government may be the best outcome."

Should Republicans gain control of both houses of Congress, one result could be an extension of the Tax Cuts & Jobs Act. 

"The 199A provision for pass-through entities is particularly important to our members," Kopperud says. "Without it, pass-throughs will face significantly higher tax rates, placing them at a competitive disadvantage in the marketplace and potentially preventing them from reinvesting in their employees and their business. 

"However, if Republicans control both Congress and the White House, we're preparing to defend the tax exclusion for employer- and employee-paid health insurance premiums. Unfortunately, eliminating this exclusion is always raised by Republicans, because it's the largest tax expenditure. But for every $1 of tax expenditure, data show employers invest $5.36 in health benefits. Eliminating or reducing this exclusion would only shift costs onto employers, employees and their families."

By contrast, "Democratic control will almost certainly guarantee the preservation of the tax exclusion," Kopperud says. "They make it clear that they are not in the business of taxing health insurance, but they are committed to restructuring the TCJA, and with it, potentially the 199A provision."

Related: Election stress takes heavy toll on worker wellbeing, productivity

In addition to high-profile national races, it's important to remember that state and local elections also have significant impacts on benefits advisors across the country and the employers with whom they work. Boyle's company, which created an SaaS platform called ClearFile, tracks every health care policy change across all 50 states and U.S. domestic territories.

"While it's challenging to stay on top of each bill, it's essential for the public to be aware of what's happening locally," he says. "I would always advise people to 'know before you vote,' because local lawmaking can sometimes be vague and open to interpretation. See what stakeholders in your local area are saying about a particular proposed policy."

Regardless of the outcome of the presidential and congressional elections, the most effective and successful benefits advisors will be those who work proactively to provide the best solutions for their clients and grow their businesses.

"Benefits consultants and brokers absolutely must consider solutions outside of traditional fully insured and self-funded plans for their clients," Kim says. "The cost of health care will only continue to rise, and they owe it to their clients to also present alternatives like ICHRA that can save money and provide employees with more plan options."

As always, the most valuable thing advisors can offer their clients is not an insurance policy or investment vehicle but solid, actionable advice.

"The advisor's role in helping clients make prudent decisions about their benefits is crucial," Kopperud says. "Providing proactive education about their options and detailing the obstacles and opportunities they should be aware of moving into next year will be key."

Of course, in order to educate their clients, benefit advisors brokers must first educate themselves.

"My advice to advisors is simple: Get ahead of changes," Boyle says. "Don't just react. It's key to anticipate new policies before they take effect. Understand your demographic, whether you are working with cost-conscious groups, executive groups or working-class groups."

And during times of uncertainty, such as the runup to the election, it's important for benefits advisors to focus on things they can control.

"You don't want to make huge bets based on politics, because you don't know how the political races are going to transpire," Kelly says. "Even if you think you really have the policies down, remember that what defines a presidency is not the policies that a party proposes before an election, but what happens after. Unanticipated events like the pandemic, financial crises, or 9/11, can really change how an administration will have to react. And that's all unknown."