Second Trump Administration in the Health and Welfare Space: What’s to Come

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In the first month of the second Trump presidency, the administration has focused on several executive orders and policy changes that may have significant implications for employer health and welfare plans. In a sweeping overhaul of federal policies, these changes target healthcare coverage, diversity initiatives, and federal funding which have the potential of sparking legal challenges with some changes already subject to criticism. Notably, executive orders do not directly change the law—instead, they are a mechanism to direct federal agencies, such as the Departments of Labor, Treasury, and Health and Human Services (“HHS, collectively, the “Agencies”), to promulgate regulations and issue guidance in line with the executive orders. Nevertheless, employers should familiarize themselves with the content of the executive orders to grasp an idea of what lies ahead.

Gender-Affirming Care

Late last month, President Trump signed an executive order titled “Protecting Children from Medical and Surgical Mutilation.” This order directs federal agencies to cease funding, support, and assistance to federal insurance programs, including TRICARE and Medicaid, and federally funded institutions, such as hospitals and universities, that provide gender-affirming care. This order has already faced legal challenges from human rights groups, but it is too early to tell its final fate.

Moreover, the second Trump administration issued an executive order titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which speaks on issues involving biological sex and gender identity. Specifically, the order calls for recognition of only two sexes—male and female—which are not considered to be changeable. For example, the term “sex” means “an individual’s immutable biological classification as either male or female” and expressly excludes the concept of gender identity.

In one section of the order, which is titled “Recognizing Women Are Biologically Distinct From Men”, the Trump Administration urges HHS to provide guidance that expands on the order’s new definition. All federal employees are instructed to use the order’s definition in interpreting or applying federal law. Furthermore, it is prohibited to use federal funds to promote gender ideology. The order also repeals several Biden administration orders, including, but not limited to, orders titled “Preventing and Combatting Discrimination on the Basis of Gender Identity or Sexual Orientation” and “Advancing Equality for Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex Individuals.”

While the gender-related orders do not immediately impact existing protections, the orders signal that changes are around the corner. For example, while the orders do not expressly require HHS to amend the existing Section 1557 rule against discrimination based on gender and gender identity, there is a much greater likelihood that such amendment is upcoming. As such, employers offering health plans that include coverage for gender-affirming care may have to eventually reevaluate their policies. However, employers should also consider state laws and non-discrimination policies to ensure they align on all fronts, federally and statewide.

Affordable Care Act

The Trump administration has revoked a few Biden-era executive orders titled “Continuing to Strengthen Americans’ Access to Affordable Quality Health Coverage,” “Strengthening Medicare and the Affordable Care Act,” and “Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage.” Among other things, the revoked orders lengthened the enrollment period for the Affordable Care Act (“ACA”) and reduced premium subsidies to help more individuals afford ACA coverage. Effectively, the executive order revoking the aforementioned Biden orders seeks to restrict the ACA, with potential implications for the scope of Medicare and Medicaid.

Other Changes

The following changes are also of note:

• The Trump administration rescinded the fixed indemnity notice requirement;
• Biden’s executive order titled “Lowering Prescription Drug Costs for Americans” was rescinded;
• Although not by hand of the Trump administration directly, the Agencies have withdrawn proposed regulations regarding over-the-counter contraceptive coverage last month; and
• The Trump administration issued a temporary regulatory freeze pending review.

Conclusion

As noted above, Trump’s initial orders will have very little immediate impact, which gives employers some breathing room to get their affairs in order to ensure compliance. At the same time, given the conflicting praise and criticism from various stakeholders, it is hard to predict which initiatives will be able to withstand scrutiny. We will monitor the developments and provide updates in the future.