White House Unveils Proposed ‘Great Healthcare Plan’: Considerations for Employer Health and Welfare Plan Sponsors

The US administration announced the “Great Healthcare Plan” on January 15, 2026, outlining a framework for potential healthcare reform focused on cost containment, consumer choice, and transparency. The proposal builds on prior regulatory initiatives addressing hospital and insurer price transparency, prescription drug pricing, and health plan disclosures, but contemplates broader statutory changes that would require congressional approval.

While many details remain conceptual and subject to legislative negotiation, the Great Healthcare Plan (the Plan) provides insight into policy directions that may inform future healthcare legislations, agency rulemaking, and enforcement priorities. 

KEY TAKEAWAYS FOR EMPLOYERS

• The proposed Great Healthcare Plan is aimed at reducing prescription drug costs, lowering insurance premiums, and expanding transparency in the healthcare system.
• While the proposal requires congressional action and may evolve significantly, it highlights policy priorities that could shape future legislation and regulatory initiatives impacting employer-sponsored health and welfare plans.
• Employers should consider how potential reforms could influence longer-term plan costs, vendor relationships, disclosure obligations, and participant communications.

KEY ELEMENTS RELEVANT TO EMPLOYER-SPONSORED PLANS

Prescription Drug Pricing Initiatives

The proposal emphasizes reducing prescription drug prices through the codification of “most favored nation” pricing agreements, which aim to ensure Americans pay no more than the lowest price available internationally, together with proposals for expanded government negotiation with pharmaceutical manufacturers. If adopted, these measures could affect drug pricing structures across the commercial market, including employer-sponsored group health plans.

Lower drug acquisition costs may translate into reduced plan spending over time; however, changes to pricing models could also affect formulary design, pharmacy benefit manager (PBM) arrangements, and global supply considerations for drug manufacturers.

Insurance Premiums and Market Structure

The Plan proposes changes to how certain federal healthcare funds are distributed, including redirecting some payments currently made to insurers or intermediaries to individuals instead. While primarily aimed at the individual market, such changes could indirectly affect pricing dynamics and insurer participation that also impact the group market.

The proposal also calls for eliminating certain payments to brokers and intermediaries and increasing insurer accountability, which may influence how insurers structure premiums and administrative fees for employer-sponsored plans.

Transparency and Disclosure Requirements

A significant focus of the Plan is expanded transparency for insurers and healthcare providers. Proposed requirements include public reporting of allocation of premium dollars, administrative versus medical spending, and claim denial rates.

The Plan also introduces a proposed “Plain English” standard for insurance policies and coverage materials. If extended to the group market, these requirements could necessitate revisions to summary plan descriptions (SPDs), benefit summaries, and other participant-facing materials for employer-sponsored plans, but the applicability of such standards to ERISA-covered plans remains unclear.

Cost-Sharing Reduction Funding

The proposal would fully fund the Affordable Care Act’s Cost-Sharing Reduction program, a change primarily affecting marketplace coverage. However, any resulting shifts in insurer pricing strategies or market participation could have downstream effects on employer-sponsored coverage and premium trends.

CONSIDERATIONS FOR EMPLOYERS AND PLAN FIDUCIARIES

While the Great Healthcare Plan is a proposal rather than enacted law, employers sponsoring health and welfare plans should consider the following strategic considerations:

• Plan Costs: Changes to drug pricing and insurer transparency could affect overall plan expenses and future premium negotiations.
• Vendor Relationships: Employers may need to reassess arrangements with insurers, PBMs, brokers, and other service providers if pricing structures or disclosure obligations change.
• Compliance and Disclosures: Expanded transparency and “Plain English” standards could require updates to plan documentation and participant communications if such requirements are extended to employer sponsored plans.
• Plan Design Strategy: Employers may wish to evaluate how potential cost reductions or market changes could influence benefit design, contribution strategies, and employee engagement.

Employers should continue to monitor legislative developments and agency guidance to assess whether, and how, proposed reforms may apply to group health plans.

WHAT ERISA FIDUCIARIES SHOULD CONSIDER NOW

Fiduciaries of employer-sponsored health and welfare plans may wish to begin considering the following steps as part of a prudent fiduciary process:

• Monitor legislative and regulatory developments: Track congressional activity and agency guidance to assess whether proposed reforms advance and whether they could affect group health plan obligations.
• Engage service providers: Communicate with insurers, PBMs, brokers, and other vendors regarding potential implications for pricing practices, transparency requirements, and reporting obligations.
• Review plan documentation and communications: Evaluate whether existing SPDs, benefit summaries, and participant communications would be adaptable to potential plain-language or enhanced transparency standards.
• Assess cost and fee structures: Consider how potential changes to prescription drug pricing, insurer accountability, or intermediary compensation could affect plan expenses and vendor fee arrangements.
• Document fiduciary decision-making: Ensure that discussions, evaluations, and decisions related to monitoring potential healthcare reforms are appropriately documented as part of the fiduciary governance process.

HOW WE CAN HELP

Morgan Lewis regularly advises employers on the design, administration, and compliance of health and welfare plans. We will continue to track developments related to the Great Healthcare Plan and are available to discuss how potential reforms may affect your organization as legislative and regulatory details emerge.