7 Ways Employer Health Plans Could Change in the Next 4 Years

4 to 5-minute read

With Donald Trump set to take office next month, a deregulatory agenda is expected, with a push to modify, if not reverse, a slew of Biden-era policies. That includes potential shifts in healthcare policies that could impact employer health plans.

Based on Trump's previous term and campaign promises, here, briefly, are seven areas where changes may occur:

1. Expansion of Association Health Plans (AHPs)

The Trump administration previously expanded AHPs, allowing small businesses to band together to purchase insurance collectively.

This approach aimed to provide more affordable coverage options by leveraging the purchasing power of groups.

The Department of Labor, in fact, projected that the expansion of AHPs could provide healthcare coverage to an estimated 4 million Americans who were previously uninsured or underinsured. This was particularly beneficial for self-employed individuals and small business owners with limited access to insurance options.

However, concerns exist regarding the potential for reduced coverage standards and the financial stability of these plans. Critics argue these plans could fragment the insurance market, skewing risk pools as healthier individuals and businesses with lower healthcare costs opt for AHPs.

Regardless, the Trump administration is expected to take action to overturn a Biden rule limiting access to these plans.

2. Promotion of Short-Term Health Insurance Plans

We also expect a push by the Trump administration to reintroduce short-term, limited-duration insurance plans, which are typically less expensive but offer limited coverage.

While these plans may reduce costs for employers, they might not cover essential health benefits and aren’t required to cover pre-existing conditions, potentially leaving employees with inadequate protection.

Trump is expected to revert to 2018 rules he enacted in his first term that allow insurance companies to offer plans that last about a year and can be renewed for two more. 

3. Modifications to Health Reimbursement Arrangements (HRAs)

The incoming administration is expected to push to enhance the flexibility of Health Reimbursement Arrangements, allowing employers to reimburse employees for individual health insurance premiums.

This change could provide businesses with more options to offer health benefits without sponsoring a traditional group health plan.

This approach will almost certainly trigger legal battles, most likely pitting Democratic state attorneys general against the Trump White House.

4. Changes to Essential Health Benefits Requirements

There also may be a push to grant states greater flexibility in defining essential health benefits. This could lead to variations in coverage requirements across states, affecting the comprehensiveness of group health plans and potentially complicating compliance for businesses operating in multiple states.

This, too, could be a battle that lands in the courts.

5. Adjustments to Employer Mandate Penalties

The new administration also might seek to modify or eliminate penalties associated with the employer mandate under the Affordable Care Act, which requires certain employers to provide health insurance to full-time employees. Also, Vice President-elect JD Vance has suggested the Trump administration would allow insurers to divide enrollees into different risk pools and offer different plans based on those health risks.

6. Emphasis on Price Transparency and Consumer-Directed Care

There is likely to be a continued emphasis on initiatives promoting price transparency and consumer-directed healthcare. Employers may be encouraged or required to provide more information about healthcare costs to employees, enabling them to make informed decisions about their care.

7.  Further Development of Reference-Based Pricing

The incoming Trump administration is poised to further embrace reference-based pricing (RBP) in health plans—a shift that could play a pivotal role in controlling healthcare costs. The federal government has tacitly supported RBP for nearly a decade, recognizing its potential to bring transparency and fairness to healthcare pricing.

Under the first Trump administration, landmark transparency regulations were introduced, signaling a commitment to addressing the opaque and often exorbitant pricing practices in the healthcare sector. Both Donald Trump and RFK Jr. have emphasized the critical need for reforms to rein in hospital pricing, which they view as a central factor in healthcare affordability.

Hospital pricing is not just a policy issue—it’s a monumental driver of rising healthcare costs. Reference-based pricing, which establishes clear benchmarks for what insurers will pay providers for specific procedures, puts pressure on hospitals to align their charges with realistic, market-driven rates. By expanding this approach, the Trump administration could empower employers, insurers, and patients to demand greater accountability and fairness from the healthcare system.

As transparency and cost containment become central themes of the next phase of healthcare reform, reference-based pricing stands out as a practical solution to ensure that Americans can access affordable, high-quality care.

Business owners should stay informed about these potential policy changes, as they could significantly impact the structure and administration of company health plans. Consulting with healthcare policy experts and legal advisors will be essential to navigate the evolving landscape and ensure compliance with new regulations.

The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.