January 28, 2025

On January 20, 2025, on his first day in office, President Trump signed several executive orders that could eventually impact benefits compliance for group health plans. As background, an executive order does not have the same force as a congressionally passed law. Instead, it directs the federal administrative agencies (DOL, IRS, HHS, etc.) to take conforming actions during the coming days, weeks, and months. Executive orders do not instantaneously change compliance requirements or otherwise have immediate effectiveness. Instead, the agencies will need time to rescind and/or develop new regulations, a process that is outlined by specific timeframes, checkpoints, and comment periods. Simply said, bigger changes to the law require congressional action or new rulemaking, both of which take time.

For now, employers should not rush to make changes to their plans until additional federal agency guidance is published explaining how the directives will be implemented. Our Benefits Compliance team will continue to monitor and follow these developments and report on them in Compliance Corner.

However, the executive orders do provide a general road map on where the Trump administration may go with its health policy, including potential impacts on employer group health plans. Generally, the orders include directives aimed at chipping away and rescinding prior Biden administration policies, including ones that promoted expanding coverage under the ACA and Medicaid, lowering drug costs, and discrimination protections on the basis of gender identity and for LGBTQ+ individuals (including gender transition coverage under health insurance policies and plans).

Interestingly, President Trump’s executive orders to this point have not been directed towards President Biden’s executive orders and presidential memorandum relating to reproductive care. Many thought this would be a Trump administration priority to erode or otherwise limit reproductive care protections, but it remains to be seen how President Trump will proceed on that front.

Below is a nonexhaustive list of executive orders, including a short summary of each, that could potentially impact employer group health plan compliance:

• Executive Order: Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government
  • Under this order, the Trump administration is directed to recognize only two sexes — male and female. The order states that both sexes are not changeable and includes a list of related defined terms that agencies should apply when interpreting and applying federal law and policy. As an example, “sex” is defined as “an individual’s immutable biological classification as either male or female” and excludes the concept of “gender identity.” The order also rescinds several Biden administration orders that prevented discrimination on the basis of gender identity or sexual orientation and that advanced equality for LBGTQ+ individuals. The order also challenges the Supreme Court's 2020 decision in Bostock v. Clayton Country, Ga., which provides protections based on gender identity, calling that decision harmful to women and “legally untenable.”
  • The order may impact employer group health plans and have an impact on the ACA’s Section 1557 protections against discrimination based on gender and gender identity. While the order does not specifically require HHS to amend existing Section 1557 rules, it increases the likelihood that they will. In other words, while nothing has changed right now, existing protections for things like coverage for gender-affirming surgery and related mental health support may be at risk.
• Executive Order: Initial Rescissions of Harmful Executive Orders and Actions
  
  This executive order includes the revocation of several Biden administration orders, including those listed below:
  • Revocation of Order 14009 “Strengthening Medicaid and the Affordable Care Act”
  • Revocation of Order 14070 “Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage”
    • Under this order, the Trump administration is directed to restrict the ACA. As background, under Biden’s order to expand the ACA, the Biden administration lengthened the enrollment period for the ACA, increased funding for promotional enrollment groups (those that assist US citizens in enrolling in ACA coverage), and – via the Inflation Reduction Act – enhanced premium subsidies to help more individuals afford ACA coverage.
    • The Trump order may scale back those Biden enhancements, including potential restrictions and other barriers for individuals to enroll in ACA plans. The executive order does not directly address ACA requirements affecting employer group health plans or coverage mandates, but the Trump administration has generally leaned towards less regulation of employers. Therefore, this order could signal that additional ACA regulatory requirements could be targeted for revision efforts and/or repeal.
  • Revocation of Executive Order 14087, “Lowering Prescription Drug Costs for Americans”
    • Under this order, the Trump administration agencies are directed to rescind Biden administration actions related to prescription drug pricing. At a high-level, Biden’s orders called on CMS to attempt to lower prescription drug costs through certain measures, including the initiative for establishing a flat $2 copay for some Medicare generic drugs and directing states to band together for better pricing on certain cell and gene therapy drugs. President Trump’s campaign messaging included a focus on more transparency and lower pricing on prescription drugs so it’s unclear what the ultimate focus will be for the Trump administration on prescription drug pricing.
• Executive Order: Regulatory Freeze Pending Review
  • Under this executive order, the Trump administration agencies are directed to discontinue new regulations that were previously in process. The new administration will review current regulations under development. Thus, Trump may change or abandon several proposed regulations that were not yet finalized previously, including the recently published HIPAA Security Rule and other Medicare and Medicaid rules relating to obesity medications and tobacco product nicotine levels. It remains to be seen how this regulatory freeze will actually play out, but the Trump administration may also attempt to rescind other regulations issued by the Biden administration, including those relating to MHPAEA, transparency, and the ACA.