The results of the 2022 midterm elections will shape the legislative landscape for employee benefit and compensation policy over the next two years. Below is an outline of the current status of the election results, other changes that are expected for the 118th Congress (2023 – 2024), and preliminary observations about potential benefit and compensation-related implications.
As of this writing, some races are still undetermined, but control of Congress is clear. Senate Democrats will retain the majority with at least 50 seats (Vice President Kamala Harris provides the tie-breaking vote, giving Democrats the majority). Republicans will hold the House majority for the 2023 – 2024 legislative term.
A Republican majority in the House will have significant implications for the 118th Congress.
In a divided Congress, where each chamber is controlled by a different party, differing policy priorities likely will make it more difficult to move legislation to final enactment. Each chamber could block action on legislation approved by the other chamber in most circumstances. In addition, President Biden could veto much of the legislation he opposes, especially targeted or stand-alone legislation.
The lack of a 60-vote Senate majority will continue to be an obstacle in the Senate. For example, Democrats currently hold majorities in both the House and Senate, but many bills approved by the House have stalled because they cannot get the 60 votes need to move through the Senate under regular procedures.
During the upcoming session, legislation will have several possible pathways to enactment:
If policy changes face significant difficulty in a divided or narrowly controlled Congress, pressure will likely be placed on the Biden administration to make changes through Executive Orders, regulations and other administrative procedures.
With Republicans holding the House majority, we can expect active oversight of administrative and regulatory activities, including benefit-related regulations and guidance. Policies that could be subject to oversight and review during the 118th Congress include the fiduciary rule; environmental, social and governance (ESG) factors; the ACA family glitch; and cryptocurrency in retirement plans.1 Implementation of the Inflation Reduction Act could also be subject to significant oversight.2
The retirement of some lawmakers, changes in House and Senate committees, and other factors also affect the agenda and outlook for benefits and compensation. Several lawmakers who have been active in retirement policy are retiring after the 2022 legislative term, most notably:
In congressional committees, including those with primary jurisdiction over benefit-related issues, important changes will occur. Some possible changes that could affect benefit-related committees in the 118th Congress include:
Before the 118th Congress commences in early 2023, the current Congress will return to session to finish its work for 2022. Government funding expires on December 16, so Congress must approve new government funding.
Congress may also consider a broader year-end package. If so, the SECURE 2.0 retirement package is expected to be under consideration. Lawmakers will be working to reconcile differences between the retirement bills approved by the House, the Senate Finance Committee and the Senate HELP Committee and develop a unified bill that could be attached to a year-end package.3
Other provisions with implications for employers could be under discussion during the post-election legislative session, including healthcare and tax provisions. It is not yet clear which provisions may move through Congress during the remaining weeks of the 2022 session, and it’s possible that final details will be settled in the last days before the current Congress adjourns.
Companies should watch for and monitor additional developments once election results are finalized and lawmakers begin to organize and set the agenda for the 118th Congress.
1 For more information on the “family glitch” loophole in the Affordable Care Act, see “IRS finalizes ‘family glitch’ fix,” Insider, October 2022.
2 For more information on the Inflation Reduction Act, see “Inflation Reduction Act retirement and prescription drug benefit implications,” Insider, August 2022.
3 For more information on SECURE 2.0, see “Senate Finance Committee approves SECURE 2.0 legislation,” Insider, July 2022.
| Title | File Type | File Size |
|---|---|---|
| Insider November 2022 | .4 MB |
