Did you know there are at least 40 potential areas of employee benefit plan regulations and legislation to watch in 2025 and beyond?

That’s how many I counted while attending the International Foundation webcast, Legislative and Regulatory Update—What Could Be Coming in 2025?, where speakers Steven Grieb, CEBS, senior compliance counsel at Gallagher Fiduciary Advisors, LLC, and Ronald Krupa, CEBS, benefits consultant at WTW, analyzed possible developments that may shape plan sponsor decisions.

Given the recent election, ever-changing challenges in the domestic economy, and global political and economic uncertainty, Grieb and Krupa cautioned that any discussion is speculation at this point. Retirement plan administration, investments, health plan coverage and prescription drug costs are the major categories highlighted in this blog.

Regulatory Reviews Expected

Before diving into the areas of benefits that may be affected, it’s important to understand how Congress and presidential administrations typically handle regulations during a transition.

The 119^th session of Congress began on January 3, 2025. News outlets widely reported that initial Senate priorities will be holding cabinet member nomination hearings and disapproving recently published Biden administration regulations.

• Freezing and withdrawing regulations. In recent decades, it has been typical for a new presidential administration to impose a regulatory freeze to review regulations in their early stages that haven’t been published yet. In addition, under the Congressional Review Act (CRA), each new session of Congress presents an opportunity to overturn rules that were released since roughly mid-summer 2024, Krupa explained.
• Disapproving regulations. The Congressional Research Service (CRS) estimates that Biden administration rules submitted on or after August 1, 2024, through the end of 2024 are likely to be subject to the CRA lookback provisions and will qualify for additional periods of CRA review in the first few months of 2025. “These renewed periods of review are likely to permit the introduction of disapproval resolutions aimed at such rules until late March 2025 and make the CRA ‘fast track’ procedures available to consider such joint resolutions in the Senate until late May or early June 2025,” a CRS report said. In early 2025, Congressional staffers will prioritize which rules to potentially disapprove, and we will see if any benefits-related rules are flagged.

Retirement Plan Areas to Watch

• Fiduciary investment advice. The Biden administration’s DOL retirement security rule is likely to be reversed or stuck down in court, Grieb predicted. The actions of presidential administrations in recent history indicate a return to the Employee Retirement Income Security Act (ERISA) definition of fiduciary from 1975.
• Updated Voluntary Fiduciary Correction Program (VFCP). Employee benefit plan sponsors that may be liable for fiduciary violations under ERISA can apply for relief from enforcement actions through the VFCP. Grieb flagged this as a change expected any day now, and final amendments to the VFCP were released several days later on January 14, 2025. A new feature under the 2025 VFCP is the self-correction component (SCC) for specific transactions, according to a DOL fact sheet. Two types of transactions are eligible for the SCC:
  • Delinquent participant contributions and loan repayments to pension plans
  • Eligible inadvertent participant loan failures.
• Updated Employee Plans Compliance Resolution System (EPCRS). The second type of transaction, eligible inadvertent participant loan failures, are violations involving loans from a plan to a participant that can be self-corrected under the Internal Revenue Service (IRS) EPCRS. IRS is expected to release updated EPCRS soon. Nearly every qualified plan—at some point—uses the EPCRS, so this is a significant development, Grieb emphasized.
• SECURE 3.0 prospects. As SECURE 2.0 Act implementation continues, the next phase of bills that could create a “SECURE 3.0” package is under way, Grieb said. Lawmakers appear to have an appetite for furthering retirement security efforts with proposals such as lowering the age to participate in an employer’s retirement plan to 18 (from age 21 currently).

Investments

Presidential administrations can set a cautionary or permissive tone for certain investments, and Grieb identified the following areas of plan investments that may see change under the new administration.

• Environmental, social and corporate governance (ESG) factors. Since the Clinton administration, presidential priorities have gone back and forth on investment considerations under ERISA fiduciary responsibility, Grieb said. The Trump administration is expected to reverse the Biden administration regulations and return to “pecuniary” factors only as permissible for investments.
• Digital assets. In 2022, DOL guidance had a chilling effect on cryptocurrency investments in defined contribution (DC) plans. Grieb speculated that DOL could be less likely to investigate DC plans that have digital asset options under the Trump administration.
• Private equity. Similarly, DOL could back off from the cautionary tone of additional considerations for sophisticated investments like private equity in DC plans.
• Self-directed brokerage accounts. With some participant demand for alternative investment access within a DC plan, the prevalence of DC plans that offer self-directed brokerage accounts could increase, Grieb noted.

Health Plan Areas to Watch

Krupa highlighted the following health care benefit changes that may be on the horizon.

• Expanded use of health savings accounts (HSAs). Some experts say that HSAs can be appealing to plan participants because they have triple tax benefits and the funds belong to the individual, unlike use-it-or-lose-it flexible spending account (FSA) funds that can be forfeited to the employer. Proposals to watch include adding more qualified medical expenses (e.g., caregiving responsibilities or while taking medical leave) and decoupling HSAs from high-deductible health plans (HDHPs).
• Promotion of ACA alternatives. Although a potential repeal of ACA can’t be ruled out, it is unlikely due to the slim majority of Republicans in the Senate. Short-term limited-duration health plans and association health plans have gone in and out of favor under the Trump and Biden presidential administrations. We could see regulations that promote these types of plans, Krupa said.
• Coverage of preventive care without cost sharing. On January 10, the U.S. Supreme Court justices agreed to take the case of Becerra v. Braidwood Management. The dispute is over the constitutionality of member appointments to the U.S. Preventive Services Task Force (USPTF), who recommend what screenings and other preventive services are required to be covered without cost sharing. If preventive services mandates are struck down, it is unclear whether employers would then be allowed to choose what screenings/services to cover at 100%, Krupa questioned. The case is likely to be argued in April, according to Amy Howe at SCOTUSblog.
• Prescription drug pricing. Drug pricing reform will continue as a bipartisan issue. Pharmacy benefit manager (PBM) legislation could gain traction at the federal and state level. Future tariff policy could impact pricing as many ingredients for drugs are imported to the U.S., Krupa noted.

Learn More

International Foundation members can watch the recording to learn about other areas to watch and find out what their peers asked the speakers. Topics include the following areas and many more.

• Supreme Court appointments
• Tax Cuts and Jobs Act extension
• Tax advantages of benefits deductions
• IRS funding and technology infrastructure
• PBGC’s special financial assistance program
• ERISA preemption
• Medicaid funding
• HIPAA cybersecurity

We’ll continue to keep you informed on important legislative and regulatory developments in Today’s Headlines and the Legislative Tracker.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.