Election 2020: What Could Change for Employers with President Biden?
After four years, a new president will move into the White House beginning in January 2021. From healthcare and the economy to labor law, what could employers expect from the new Biden administration?
What Changes to Healthcare Policy Could HR Expect?
Healthcare policy could change dramatically over the course of the Biden administration. Here’s what could be on the table in the next four years:
- Protect the ACA: President-elect Biden has committed to protecting the Affordable Care Act (ACA), which was shepherded by Former President Obama and signed into law in 2010. According to the Biden campaign website, the president-elect plans to build on the foundation laid by Obamacare and expand access to healthcare for millions of Americans so that approximately 97% of Americans are insured.
- Individual Mandate Renewal: In June 2019, the then-candidate Biden promised to revive the ACA’s individual mandate penalty. However, these plans remain in flux as the Supreme Court heard oral arguments about the ACA in November 2020. Later in the same month, NPR reported that the Court “appears likely to uphold Obamacare.” Meanwhile, the IRS announced in the same month new employer mandate penalties for 2021.
- New Public Option: One of the key provisions of Biden’s vision is a new public health insurance option “like Medicare.” A Biden public option would likely reduce costs for patients by negotiating lower hospital and healthcare provider prices. The president-elect’s campaign website promises that the option will be available to Americans “[w]hether you’re covered through your employer, buying your insurance on your own, or going without coverage altogether.”
- Medicare Eligibility Age Lowered to 60: Another key component of Biden’s proposed healthcare policy is lowering Medicare eligibility age to 60. If passed, companies could see older employees depart from employer-provided coverage—impacting group numbers and likely coverage costs.
- Older Employees Leaving Workforce: According to data from the National Bureau of Economic Research, workers often “delay retirement until they become eligible for Medicare at age 65.” In other words, if the eligibility age for Medicare is lowered to 60, employers could see older teammates retire sooner than expected.
- Increase the Value of Tax Credits: President-elect Biden promised to increase the value of tax credits, which could help lower healthcare premiums and extend coverage to more families. The administration plans to do this by eliminating the 400% income cap on tax credit eligibility and lowering the cost of coverage limit to 8.5% of income (a drop of 1.36%).
What Changes to Economic Policy Could HR Expect?
According to the Biden 2020 campaign website, the president-elect identifies the following as focuses once his administration begins in January 2021:
- Comprehensive COVID-19 Strategy: Biden plans to provide immediate relief to working families, small businesses, and communities by extending crisis unemployment insurance; giving aid to state, local, and tribal governments to protect essential workers; and issuing a “comeback package” to local businesses and entrepreneurs. Biden also plans to enlist unemployed workers to help fight and recover from the pandemic. And while the FFCRA is slated to expire at the end of the year, Congress could extend the law’s paid family and sick leave protections under a Biden term.
- Adjust Tax Code: President-elect Biden’s tax plan promises to raise the corporate tax rate to 28%, raise the top individual income rate to 39.6%, expand the Child Tax Credit, and replace upfront tax breaks with flat-tax credits on 401(k) plans.
- Retirement Plans: In addition to the flat-tax credits on 401(k) plans, the president-elect could reform Social Security in several different ways. He plans to implement a minimum benefit level of at least 125% of the poverty line for workers who spent 30-plus years working, implement a 5% increase in benefits for people who have received benefits for at least 20 years, and protect widows and widowers by raising the monthly payment by approximately 20% for impacted beneficiaries.
- Mobilize American Manufacturing and Innovation: Biden is expected to invest in American-made products and industry to strengthen small business supply chains and boost quality union jobs in manufacturing and technology.
- Build a Modern Infrastructure and Establish a Clean Energy Future: The president-elect has released proposals that address rebuilding America’s infrastructure and building “a clean energy economy.”
- Minimum Wage: Shortly after the election, several different media outlets reported that President-elect Biden supports raising the federal minimum wage to $15 by 2026. The move would likely raise the pay of lower-income workers but could also result in job losses due to increased expenses and impact profits for certain employers. Some states, like Oregon and New Jersey, have already passed legislation that raises the wage floor for hourly workers. Unchanged since 2009, the current federal minimum wage is $7.25.
What Other Issues Could HR Expect President-elect Biden to Support?
In addition to updates in healthcare and economic policy, employers could see the following changes within the next four years:
- Pro-Worker Labor Legislation: According to SHRM, President-elect Biden supports the Protecting the Right to Organize (PRO) Act. Passed by the House of Representatives in February 2020, the PRO Act amends the National Labor Relations Act (NLRA) and makes it more difficult for employers to classify employees as exempt from labor law protections, expands what’s classified as an unfair labor practice, and generally makes it easier for workers to organize. The bill did not pass the Republication-leaning Senate.
- Advance Racial Equity: Biden plans to address the racial wealth gap by expanding affordable housing, investing in BIPOC entrepreneurs and communities, and more.
- Support LGBTQ+ Community: The president-elect has promised to enact the Equality Act within the first 100 days of his term. The law will guarantee LGBTQ+ people are protected under existing civil rights laws. In June 2020, the Supreme Court ruled on similar protections.
- Invest in Education and Home Care: Other proposals look to “ease the burden of care” for working parents and especially women, including more affordable childcare and home care for aging relatives and people with disabilities. This plan also includes supporting educators with improved pay and benefits.
- Paid Leave Expansion: Vice President-elect Kamala Harris supported the FAMILY Act during her own presidential campaign and SHRM reports Biden also supports the legislation. While not a certainty, if passed, the proposed bill would provide workers with up to 12 weeks of paid family and sick leave. The change could impact a company’s approach to providing paid time off (PTO) benefits.
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