Around one month into the Trump administration, many in the benefits community have been watching for new executive orders and evaluating how they affect their benefit plans. The Foundation identified eight executive order (EO) topics that have the greatest potential impact on benefit plans and what employers can do now. Below is a highlight of those orders, a timeline of events and employer considerations as of this writing. While there have been frequent updates to these orders, generally, the impact of the orders is not urgent, allowing employers time to review policies and strategies.
- Regulatory Freeze
This is a typical first-day EO of a new administration. This order freezes proposed and final rulemaking until rules are reviewed and approved by agencies in the new Trump administration. In addition, the EO withdraws any rules sent to the Office of the Federal Register that have not yet been published and postpones the effective date for any published rules for 60 days to allow for review.
- Deregulation Ratio
The order requires that whenever an agency issues a new federal regulation or guidance document, it must identify at least ten existing regulations or guidance documents to be repealed. The ratio is meant to control the cost of new regulations and requires that the “cost of all new regulations, including repealed regulations, be significantly less than zero” for fiscal year 2025. The potential impact of this is that agencies will issue fewer new rules and guidance documents.
- Federal Government Recognizing Two Sexes
The order says that United States policy is to recognize two sexes, male and female, and that sex “does not include the concept of gender identity.” The order defines sex, women, men, female, male, gender ideology and gender identity to be used in federal policies and laws.
The order directs that:
- Proposed bill text to codify the definitions be presented to the president within 30 days (February 19, 2025)
- The Department of Health and Human Services (HHS) provides guidance on the definitions (by February 19, 2025)
- The Equal Employment Opportunity Commission (EEOC) rescinds guidance on workplace harassment that provided protection for harassing conduct based on gender identity and sexual orientation
- Guidance be released to protect single-sex restrooms and locker rooms in workplaces and federally funded entities covered by the Civil Rights Act of 1964.
Any EEOC guidance for workplaces will affect employers. By February 19, 2025, future congressional action on definitions and how broadly the definitions apply to group health plans under HHS (if at all) will be clearer.
- Federal Contractors and Diversity, Equity and Inclusion (DEI) Initiatives
The EO addresses the employment, procurement and contracting practices of federal contractors and subcontractors that consider “race, color, sex, sexual preference, religion or national origin in ways that violate the Nation’s civil rights laws.” This order revokes the equal employment opportunity EO signed by President Lyndon B. Johnson in 1965 that led to affirmative action requirements (e.g., contract clauses) for federal contractors. The EO directs federal contractors with any programs related to the 1965 equal employment opportunity order to disband those programs within 90 days (by April 21, 2025). In addition, starting April 22, 2025, the EO requires that every contractor include a term requiring federal contractors to certify they are not operating “any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” Protections for veterans and people with disabilities aren’t impacted by the EO. As of January 24, 2025, the Department of Labor ended investigation and enforcement activity under the rescinded Johnson (1965) EO.
- DEI Initiatives in the Private Sector
The EO directs agencies to investigate private employers with the goal of “encouraging the private sector to end illegal DEI discrimination and preferences.”
The EO directs agencies to advocate for measures similar to federal contractor requirements (described above in section 4) in the private sector. The order mandates a 120-day Department of Justice review to identify key industries and organizations engaging in discriminatory DEI practices and recommend enforcement actions and measures to encourage private employers to discontinue DEI initiatives (by May 21, 2025).
The order does not describe specific prohibited practices nor does it provide examples of illegal DEI policies. A Department of Justice memo released after the EO indicates that exclusion and discrimination are prohibited, while celebrating diversity (e.g., educational, cultural and historical observances) is allowed.
- Make America Healthy Again (MAHA) Commission
Established on February 13, 2025, the commission lead by HHS Secretary Robert F. Kennedy Jr. will study childhood chronic illnesses, including asthma, allergies, autoimmune illnesses, obesity, mental health conditions and autism. The EO specifically mentions health insurance coverage. In focusing on reversing chronic disease, agencies are directed to “ensure the availability of expanded treatment options and the flexibility for health insurance coverage to provide benefits that support beneficial lifestyle changes and disease prevention.”
- Artificial Intelligence (AI)
The order directs agencies to develop an AI action plan within 180 days and revoke the Biden-era approach to AI (which focused on bias-related risks of AI and consumer protection).
The AI EO has no direct impact on private sector employers at this time; the AI action plan is yet to be released. In the workplace, antidiscrimination in hiring is still the law. Some state and local laws address AI in employment decisions.
- Cryptocurrencies
The digital financial technology order calls for the creation of a working group on digital assets, which will propose a federal regulatory framework that will oversee the issuance and operation of digital assets. This could lead to expanded cryptocurrency investment options in retirement plans.
What Can Employers Do Now?
As further guidance on these executive orders become available, employers should:
- Evaluate policies, procedures and training
- Follow laws and work with legal counsel and other service providers
- Monitor federal laws as well as state and local laws that may change in response to federal deregulation.
Generally, the EO directives impacting benefits are not urgent, so employers have time to review strategy and plan compliance measures. While the EOs have been issued rapidly, most of their impact is yet to be seen as the Trump administration transition is in progress. The Senate has recently confirmed some agency heads, including the HHS secretary, attorney general, treasury secretary and assistant labor secretary, and their priorities are still taking shape. Congressional staff are still developing legislative priorities. The regulatory freeze will expire March 22, 2025. In conclusion, we will wait and see how executive orders, agency guidance and laws play out.
Check out the Presidential Administration and Employee Benefits toolkit to find more detailed analysis from legal experts on these topics.
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
