The political campaigns for the White House being waged by Hillary Clinton and Donald Trump — as well as state battles for congressional seats — are heating up as Election Day approaches. Proposals from the Democratic and Republican nominees have significant implications for benefit programs and workplace policies, including health care, paid leave, child care and tax reform. The party platforms released at the nominating conventions reflect both the proposals issued by the candidates and the likely priorities each party would pursue in 2017 if it wins the White House and control of the legislative agenda.
Health care on the campaign trail
Six years after President Obama signed it, the Affordable Care Act (ACA) remains a campaign issue. The candidates offer sharply different proposals for the future of health care, with Mrs. Clinton proposing to build on and expand the ACA and Mr. Trump calling for its repeal.
Mrs. Clinton says she will try to reduce premium costs and out-of-pocket expenses, especially for those receiving financial assistance through the ACA’s public exchanges. Under the Clinton proposal, families receiving premium tax credits would pay no more than 8.5% of household income for health insurance premiums — under current law, the 2017 maximum is 9.69% of household income. She proposes to fix the family glitch, which keeps families of those offered affordable employer-sponsored coverage from receiving premium tax credits, even if the family coverage fails the ACA’s affordability test. She also proposes a tax credit to offset out-of-pocket costs that exceed 5% of household income. The proposal would require health plans to cover three sick visits per year, even for participants who have not yet met the deductible.
Patients would not have to pay more than in-network cost sharing for any care received at an in-network hospital, or for services received in true medical emergencies. Mrs. Clinton also supports a public health insurance option and continued financial support for state Medicaid expansion, and she has expressed opposition to the ACA’s 40% excise tax on high-cost group health coverage.
Mr. Trump calls on Congress to repeal the ACA. His series of reforms would replace the ACA and make health insurance premiums fully deductible. He also proposes to allow health insurance to be sold across state lines, encourage the use of health savings accounts (HSAs) and convert Medicaid into block grants to the states.
Both candidates would try to reduce prescription drug costs. Mrs. Clinton proposes to cap out-of-pocket costs for prescription drugs and allow the secretary of Health and Human Services (HHS) to negotiate prescription drug prices for Medicare. She also favors prohibiting direct-to-consumer advertising and increasing competition by encouraging generic biologics, clearing the Food and Drug Administration backlog and prohibiting deals that delay the release of generic drugs. Mr. Trump proposes removing “barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.”
Mrs. Clinton has released proposals to reform mental health care and strengthen enforcement of mental health parity rules. She would allow the Department of Labor (DOL) and HHS to randomly audit health plans for compliance with parity requirements. The DOL and HHS would have to fully enforce rules that require plans to disclose how their nonquantitative treatment limitations comply with parity requirements. A simple process for reporting potential parity violations would be established.
Mrs. Clinton also supports allowing individuals 55 and older to purchase Medicare coverage.
Many state and local governments have passed laws mandating paid sick and family leave, while others have enacted laws disallowing such mandates. Mrs. Clinton proposes up to 12 weeks of paid family leave, which would be funded by her proposed fair share tax on high-income workers. Employees on leave would receive up to two-thirds of their salary. She also supports federal action on paid sick leave.
Mr. Trump has proposed six weeks of paid maternity leave for new mothers whose employers do not offer paid leave. The leave would be paid for through changes in the unemployment insurance program, such as reducing improper payments.
Mr. Trump would allow families with incomes up to $500,000 ($250,000 for single filers) to deduct child and elder-care expenses for up to four dependents from gross income. The deduction would be capped at the average cost of child care in the taxpayer's state, and would also be available to stay-at-home parents. Low-income families could receive child care rebates through the Earned Income Tax Credit. In addition, he would establish new Dependent Care Savings Accounts. Funds in these accounts could carry over from year to year and would not have to be established through an employer. The funds could be used for child or elder care (including nursing or long-term care), school tuition or after-school enrichment programs. Mr. Trump would also offer incentives for employers to provide more workplace child care facilities.
Mrs. Clinton has said that families should pay no more than 10% of their household income for child care.
In his early August economic speech, Mr. Trump proposed using the tax brackets suggested by the House tax reform task force: 12%, 25% and 33%.1 (He had previously proposed tax brackets of 10%, 20% and 25%.) The August proposal would also “streamline deductions” and eliminate the estate tax.
Mrs. Clinton calls for a 4% fair share surcharge on high-income earners — those whose incomes exceed $5 million per year — which would help fund paid family leave. She also proposes to increase the capital gains tax rate on short-term trading and return the estate tax to its 2009 parameters: a lower exemption threshold and higher tax rate. She supports the so-called Buffett Rule, under which those with incomes of $1 million or more would pay an effective tax rate of at least 30%. Her proposal would tax carried interest as ordinary income — which was also part of Mr. Trump’s earlier tax proposal.
Mrs. Clinton proposes a two-year tax credit to help employers establish profit-sharing plans, with the maximum credit set to 15% of shared profits. Shared profits eligible for the credit generally would be capped at 10% of the employee’s wages. For example, if an employee’s salary was $50,000, the employer could claim the credit on $5,000 in shared profits, though the limit would be reduced or phased out for higher-income employees.
Social Security and Medicare
Retirement security has not received much campaign attention, but Mrs. Clinton proposes to extend Social Security benefits to those who take time out of the workforce to care for children or sick relatives and increase benefits for widows, proposals that would be paid for by expanding the Social Security wage base. She opposes raising the Social Security retirement age or introducing private accounts into the system.
In addition to allowing people 55 and older to buy into Medicare, Mrs. Clinton has said she would fight a Medicare voucher or premium support program.
Political party platforms
Although party platforms tend to garner little attention or to have much meaningful impact, they offer a glimpse into the parties’ direction and goals for the 2017 – 2018 legislative term.
The Democrats’ platform proposes building on the ACA, including introducing a public insurance option, boosting state innovation waivers and preventing excessive premium increases. It also favors capping prescription drug costs, allowing prescription drug reimportation and letting the secretary of HHS negotiate Medicare prescription drug prices. It supports a Medicare buy-in for those 55 and older and promises to fight Medicare vouchers and Medicaid block grants. The platform says it will end “surprise billing,” which is when patients are billed for unknowingly receiving out-of-network care, such as receiving care from an out-of-network anesthesiologist at an in-network facility. It also calls for repeal of the ACA’s 40% excise tax on high-cost group health plans, which it says should be paid for without saying how.
The Republican platform promises to repeal the ACA, help everyone obtain coverage, “end tax discrimination against the individual purchase of insurance,” and promote HSAs and health reimbursement arrangements. It supports converting Medicaid to block grants and establishing a Medicare premium support or voucher program.
As Election Day approaches, the candidates continue to issue new proposals and may offer new details about existing ones. Most of the campaign proposals would require congressional action, so the benefits and compensation agenda for the next several years will be determined by both presidential and congressional elections.
All seats in the House of Representatives are up for reelection this year, but Republicans are generally expected to retain their House majority. House Speaker Paul Ryan established the framework for his 2017 agenda through task forces that released health care, retirement and other policy proposals earlier this year. In the Senate, 34 seats are up for reelection this year, and Republicans will be defending 24 of them. No one knows yet which party will hold the majority in the 2017 – 2018 legislative session, but the next Congress will almost certainly consider legislation with significant implications for employer-provided benefits and compensation.