SCOTUS strikes tariffs: What it means for employer healthcare costs 

The Supreme Court’s February 20, 2026 decision striking down President Trump’s tariffs imposed under the International Emergency Economic Powers Act is a headline story, but for benefits leaders, the more practical question is what impact it has on 2026 and 2027 health and prescription drug plan costs.

In a 6-3 ruling, the Court held that IEEPA does not authorize President Trump to impose tariffs, emphasizing that the U.S. Constitution gives Congress the power to tax and impose tariffs. When Congress delegates tariff power to the president, it’s done explicitly, and IEEPA’s language falls far short.

What matters for employer-sponsored health plans is the decision’s second-order effect: it removes one pathway for sudden, broad-based tariffs, but it does not remove tariff risk altogether. President Trump said he would use other legal authorities and immediately announced a temporary across-the-board 10-15% tariff. While other federal laws may support presidentially imposed tariffs, they come with additional procedural limitations. The bottom line for plan sponsors is less tariffs are gone and more tariff risk persists under a different legal authority.

Nevertheless, we don’t expect tariffs to be a key cost driver in 2026 and the long-term effects are uncertain. Healthcare and prescription drug pricing is a layered system with long contracts, rebates, group purchasing arrangements and fee schedules. Even when a tariff raises prices, those increases are often delayed and diluted as they pass through distributors, manufacturers and providers. As we wait for the impact of newly imposed tariffs to unfold, employers may want to consider adding margin to baseline 2027 budget estimates and reviewing a wider range of future-state scenarios.