On May 22, 2025, the U.S. House of Representatives passed a budget bill titled “One Big Beautiful Bill” (BBB). This bill, if passed, would have wide ranging implications for health and welfare benefits, including expanding health savings account (HSA) availability, expanding availability of individual coverage health reimbursement arrangements (ICHRAs), and putting in place new eligibility requirements for Medicaid.

As explained in the new FAQ guidance, the Agencies intend to release schema version 2.0 for the MRF requirements. This will exclude duplicative data, eliminate unnecessary data fields and/or files, and will include updates to better contextualize the data. 

On May 20, 2025, The U.S. Department of Health and Human Services (HHS) announced in a press release that it is taking steps to achieve the Most-Favored-Nation Price Targets for prescription drugs in line with President Trump’s executive order “Delivering Most-Favored-Nation (MFN) Prescription Drug Pricing to American Patients.” HHS laid out its expectation that each manufacturer commits to aligning U.S. pricing for all brand name drugs across all markets that do not have generic or biosimilar competition with the lowest price from similarly developed countries. Specifically, the MFN target price is the lowest price in an Organization for Economic Co-operation and Development (OECD) country with a Gross Domestic Product (GDP) per capita of at least 60 percent of the U.S. GDP per capita. These price targets are meant to bring down U.S. drug prices while preserving innovation by evening out the price burden between American patients and patients receiving the same drug in other countries.

On May 14, 2025, the U.S. Department of Health and Human Services (HHS) rescinded its 2021 guidance regarding Section 1557 of the Affordable Care Act (ACA). Among other things, the 2021 guidance announced that HHS would interpret Section 1557’s prohibition on discrimination “on the basis of sex” to include discrimination the basis of sexual orientation and gender identity. HHS has now announced that, to reduce regulatory burden, the guidance has been rescinded, effective immediately.

On May 12, 2025, President Trump issued an Executive Order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” along with an accompanying Fact Sheet providing additional information. The Executive Order aims to lower the costs of prescription drug pricing in the U.S. by implementing a “most-favored-nation” policy. This would tie U.S. drug prices to the lowest prices paid by other comparable developed countries. The Executive Order directs agencies, including HHS and FDA, to take actions that will lower prescription drug costs for Americans. This would include direct-to-consumer purchasing from drug manufacturers and the development of a pricing index that establishes and communicates price targets comparable with the rest of the developed world. In addition, the Executive Order states that if pharmaceutical manufacturers do not bring down their prices to be in line with the new standards, the agencies must propose new regulations to create a pathway for safe importation of prescription drugs from other developed nations. The Executive Order also directs the U.S. Attorney General to review anticompetitive behavior by prescription drug manufacturers and remedy any violations through the Sherman Act.

On May 6, 2025, Speaker of the House, Mike Johnson stated in a media briefing that there would be no cuts to Medicaid. This came in the wake of a meeting with President Trump and certain House Republicans to discuss an initiative to cut roughly $880 billion from government spending, which was rumored to include funding cuts to Medicaid. In their proposed budget issued on May 2, 2025, there were no cuts to Medicare and Medicaid, although several reforms to change the eligibility standards for Medicaid have been considered.

On May 5, 2025, Attorneys General from New York, Washington, Arizona, Rhode Island, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Wisconsin and the District of Columbia filed suit in a Rhode Island federal district court against the U.S. Department of Health and Human Services (HHS) over the restructuring of HHS and its subagencies. The lawsuit alleges that the restructuring of HHS agencies, including layoffs of key personnel, is unlawful, as it undermines the ability of HHS to fulfill its statutory obligations. The lawsuit also alleges that the restructuring violates the Administrative Procedure Act because there was no period for input prior to these changes being made. Additionally, the lawsuit alleges it violates the Separation of Powers Doctrine of the U.S. Constitution in that the executive branch stepped in and dismantled programs that were authorized by Congress.

On April 25, 2025, a federal district court in Texas ruled that the Department of Health and Human Services (HHS) must certify Employer Shared Responsibility (ESR) penalties (required under § 1411 of the Affordable Care Act (ACA)), and that a § 1411 certification from the Internal Revenue Service (IRS) provided to an employer was insufficient. As a result, the court ordered the IRS to refund the ESR penalties assessed against an employer who was not provided with a certification notice from HHS (only from the IRS). As background, Faulk Co., Inc. (the “Employer”) received an ESR penalty in 2021. They paid under protest, and then later demanded a refund. The IRS never responded to the Employer’s letter, which prompted the Employer to file suit alleging that the ESR penalty assessment was unlawful as it was the responsibility of HHS to provide a certification of the ESR penalty, and that the IRS certification of the ESR penalty ran afoul of the Employer’s right to due process under the ACA. The Employer asked that the ESR penalty be refunded and that there be a declaration made that an HHS delegation of authority to the IRS to certify the ESR penalty was void and unenforceable. The court agreed with the Employer and held that under § 1411 of the ACA, and § 4980H of the Internal Revenue Code, a certification to an employer from HHS is required.

The deadline for filing the 2024 annual reporting form (ARF) for the San Francisco Health Care Security Ordinance (HCSO) is May 2, 2025. The HCSO requires, among other items, that covered employers report on their total healthcare expenditures for employees for each quarter in 2024. As background, employers with at least one employee within the city of San Francisco who works more than 8 hours per week for more than 90 days are required to spend a certain amount (called an expenditure) on healthcare for their covered employees. These funds can be used for employer-sponsored medical, dental or vision insurance, paid to the city, or contributed toward programs that reduce employee out-of-pocket healthcare costs.