A new President and Congress will take office in 2025. This changing of the guard could signal major shifts in the legal, regulatory, and economic realities of doing business in America.

Employers live with the consequences of federal policymaking every single day. Whether through legislation and court rulings, regulatory action by executive agencies, or the government’s influence over the nation’s economic health, it is impossible to deny that political developments impact business operations.

While we cannot know exactly which policies the new government will focus on in 2025 and beyond, it is possible to make an educated guess about which items could be on the chopping block.

Below, we’ve compiled a roundup of 7 key policy areas that employers should be keeping an eye on as America heads to the polls:

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• Healthcare, Benefits, and Family Planning
• Legal & Regulatory Landscape
• Taxes
• Economy & Fiscal Health
• Employee Classification & Exclusion
• Retirement & Financial Wellness
• Property & Casualty (P&C) Insurance

1. Healthcare, Benefits, and Family Planning

It is unlikely that comprehensive healthcare reform legislation will be passed in the near future, regardless of who wins the election. However, there is potential for a new Congress and President to undo recent legislation that empowers Medicare to negotiate drug prices, which could have ramifications on the general pharmaceutical market and directly affect the Reference-Based Pricing (RBP) health plans that many employers offer. It is also possible that the increased scrutiny of Pharmacy Benefit Managers in recent months by politicians on both sides of the aisle could precipitate in a legislative effort for greater regulatory oversight of PBMs and their relationships with insurance carriers and drug manufacturers.

In addition to this, the outcome of the 2024 election may affect the status of in vitro fertilization (IVF) care in the United States. After IVF treatments were effectively banned in Alabama by the state Supreme Court in February 2024, Congressional Democrats have attempted to advance legislation that would offer nationwide protection for IVF treatment and mandate that insurance carriers cover IVF procedures. However, these efforts have been blocked by opposition from some Congressional Republicans.

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• A new Congress and President may also decide to weigh in on the post-Dobbs status quo in regard to abortion access and family planning. President Biden signed multiple executive orders on this subject, which could be subject to repeal by his successor. Any new legislation regarding plan coverage of out-of-state abortion procedures or the accessibility of Mifepristone could create new compliance concerns for health plan sponsors.
• Changes to family and child tax credits, fringe benefits, and accommodations for working mothers have also been highlighted as areas for potential legislative action by members of both parties.
• There is also a significant movement to make COVID-era mandates for insurance coverage of telemedicine permanent. The current telemedicine coverage mandate expires in December of this year, and it is likely that Congress will either extend it further or permanently codify it into law in a lame duck session after the election.

2. Legal & Regulatory Landscape

The consequences of the Supreme Court’s recent overturning of the Chevron doctrine means that almost any regulatory regime is potentially vulnerable to legal challenges, including thousands of rules affecting employers. Because this ruling centers around the question of how much latitude executive agencies have in interpreting unclear elements of congressional legislation, the next actions of the next President and Congress will be determinative in how the overturning of Chevron is handled by the other two branches of government.

Employers should expect volatile legal rulings to continue in 2025 and beyond.

The overturning of Chevron is only one of several recent Supreme Court rulings that have impacted employers in recent years. Though there has been a recent liberal groundswell of support for reforming the Supreme Court, this is unlikely to go anywhere unless the Democratic party gains a powerful trifecta control after the 2024 elections. Because of this, employers should expect a continuation of the somewhat-volatile status quo. However, it is quite possible that the next President will have the opportunity to nominate one or more Supreme Court Justices, which must be confirmed by the Senate. Because of this, the upcoming election will play a large role in determining the future constitution of the Court and what sorts of rulings it will promulgate.

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• In contrast to the dynamism of the Supreme Court, Congress has erred on the side of inaction on many employer-facing issues in recent years. This has caused some state legislatures to pick up the slack and pass local regulations on issues such as pay transparency, the use of AI by corporations, and minimum coverage requirements for self-funded health insurance plans.
• A divided or conservative-leaning Washington is more likely to perpetuate this devolution of regulatory authority to state capitols.
• Regardless of the merits of any individual piece of legislation, state-level patchworks are more difficult for employers to navigate than uniform federal standards, and so a continuation of this trend would be expected to result in a greater compliance burden for employers.

3. Taxes

In 2017, the Trump administration passed the most significant suite of tax cuts since 2003. Unless action is taken to extend these tax cuts, they will expire in 2025. Expiration would mean that tax policy reverts to the pre-2017 norm. In addition to tax rates reverting to their prior amounts, expiration of the Trump-era tax reforms would eliminate the higher standard deduction and expanded childcare credits that are now in place.

The composition of the new Congress and the party of the new President will determine whether these tax cuts will be extended, modified, or allowed to lapse. If Democrats hold the Presidency and win control of both houses of Congress, they will likely retain the lower rates for individuals making less than $400,000 annually, allow the rate reductions for those making more than that amount to expire, and raise corporate rates. If Republicans sweep the Presidency and Congress, they will likely make all the individual tax cuts permanent and lower corporate tax rates further. If we continue to have divided government, it is likely the parties will agree to retain most of the individual rate reductions (except those at the very top) and allow the current corporate rates to remain in place.

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• The Trump tax reforms also significantly increased the size of the estate tax exemption. If Democrats control Washington, the exemption is likely to revert to the pre-reform amount, while Republicans may try to eliminate it completely if they can.
• In recent years, politicians on both sides of the aisle have floated the idea of taxing employer-sponsored benefit programs. Depending on the specifics, such a policy could result in enormous expenses for health plan sponsors.
• It is possible that Democrats may seek to decrease the amount that employees can deposit into an employer-sponsored retirement plan on a tax-deferred basis, so as to reduce the benefit available to highly compensated employees. While this is not particularly likely to occur any time soon, employers should watch to see whether momentum for this policy proposal grows in the new Congress.

4. Economy & Fiscal Health

It will be critical to note whether either party achieves a “trifecta,” meaning control of the House, the Senate, and the Presidency. Divided partisan control reduces the likelihood of significant government intervention in the market for either good or ill, and would also likely result in lower spending levels and less new debt being added to the national ledger. With the exception of emergency legislation passed during the COVID-19 pandemic, recent large spending bills have mostly become law during periods of trifecta control.

Divided partisan control will likely result in more gridlock, fewer spending bills, and less new debt.

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• Regardless of all else, whether the President-elect and new Congress are perceived as “business friendly” will have an immediate effect on markets.
• The most important body in driving economic policy, the Federal Reserve, remains largely independent from politics.
• Divided control would increase the likelihood of legislative brinksmanship and gridlock. This can result in disruptive government shutdowns and debt ceiling fights, increased economic volatility and concern over America’s creditworthiness, and a generalized level of uncertainty that is bad for both businesses and the economy as a whole.

5. Employee Classification & Exclusion

Employee classification and exclusion policies are also likely to be influenced by the upcoming election, with potential changes that could significantly affect American employers. One of the most pressing issues is the possible revision of overtime laws. The Biden administration has already initiated changes to raise the salary threshold for overtime eligibility, and prominent conservative thought leaders have proposed significant alterations in how overtime is tracked and measured.

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• Concern over the national labor shortage and demographic drought has also prompted some conservatives to call for a relaxation of restrictions on child labor, a controversial topic which has already been explored by several state legislatures.
• The broader issue of employee classification, particularly concerning independent contractors versus full-time employees, remains a contentious point that could see further legislative or regulatory developments in a post-election world.
• Changes in these areas could directly impact employers’ labor costs and compliance obligations, making it a critical area to watch next year.

6. Retirement & Financial Wellness

The primary goal of the SECURE 2.0 Act passed by Congress in 2022 was to address the fact that, while employer-sponsored retirement plans have been successful, many Americans – especially those who work for small employers or in the “gig economy” do not have access to them.

The next Congress will contemplate multiple pieces of ambitious retirement legislation.

Despite the passage of this recent omnibus legislation, some members of Congress are seeking additional methods to address this problem. One such proposal is the Automatic IRA Act, which would require all organizations with 10 or more employees to offer some type of retirement plan. At a minimum, this could be an IRA, but it could also be a 401(k), state-sponsored plan, or other similar option. Other Members have introduced the Retirement Savings for Americans Act, which would create a new fund managed by the federal government (“the American Worker Retirement Fund”) for workers who do not have access to an employer-sponsored retirement plan. Because this option would include a 4% match from the federal government, it would likely cause many employers to abandon the plans they currently offer to their employees.

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• Divided control would also make it less likely for Congress to tackle the mammoth challenges posed by the future insolvency of Social Security, Medicaid, and Medicare.
• While leadership within both major parties have signaled that they do not desire to alter or reduce the benefits received by current beneficiaries of these social programs, it is widely acknowledged that they are not financially sustainable in their current form and that it will eventually be necessary to take steps such as injecting them with outside funding, reducing quality for future beneficiaries, and changing eligibility criteria. Further inaction on this issue poses a major threat to the financial wellbeing of millions of Americans.
• It is worth noting that Vice President Harris and other major Democratic politicians have expressed a willingness to explore the large-scale forgiveness of consumer debt, specifically medical and student debt. While the feasibility of enacting meaningful change on this front is uncertain, successful legislative or executive intervention in the student or medical debt markets could impact health plan sponsors and employers who offer educational assistance benefits.

7. Property & Casualty (P&C) Insurance

The results of the 2024 election has the potential to cause multiple regulatory changes that impact commercial P&C policyholders. While there has been some talk of repealing or altering recent legislation that has impacted the P&C industry, such as the Inflation Reduction Act, major changes to past legislation will be difficult in the absence of a severely lopsided result that gives both the Presidency and strong Congressional majorities to the same party.

The posture and ideological divides of the new President and Congress will influence the prioritization and attention that is granted to P&C issues in the next legislative session, as well as the willingness of the federal government to intervene in troubled insurance marketplaces – for example, a federal rescue of the property market in states that have been struck by increasingly severe natural disasters. In addition to this, it should be noted that underwriters with politically-sensitive investments may be extra cognizant of market uncertainty and election-related volatility, which could prompt them to be more cautious in the rates and coverage offered to clients in the near term.

From a cyber insurance perspective, the prospect of increased attacks on American employers during election season by increasingly sophisticated – and often state-affiliated – cybercriminals has the potential to spook underwriters and cause them to increase premiums out of an abundance of caution.

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• Environmental and AI Regulations: New climate policies and AI regulations may impact liability and property insurance. For instance, stricter climate regulations could raise coverage costs for businesses with higher environmental risk, while AI-related liability changes may lead insurers to refine coverage options and premiums to address the unique risks of this evolving technology.
• Infrastructure and Green Energy Investment: Increased investment in infrastructure and green energy could drive demand for property and liability coverage as businesses expand into these areas. However, insurers may adjust premiums based on evolving risk models related to new construction, and heightened environmental standards.
• Political and Civil Unrest Risks: As concerns about cyber threats and civil unrest grow, insurers may adapt their policies to better cover both physical and cyber disruptions to business operations.

Looking for more guidance about how the election will affect employers? Reserve your spot for our 2024 Pre-Election FAQ webinar and check out the 2024 Election Hub.