On March 10, 2025, the Department of Health and Human Services (HHS) issued a proposed rule (accompanied by a Fact Sheet) that would prohibit health plans subject to the Patient Protection and Affordable Care Act’s (ACA) Essential Health Benefit (EHB) requirements from covering “sex-trait modification services,” or gender affirming care, as an EHB. As background, the ACA requires that certain benefits that fall within the category of EHBs be covered on plans available on ACA Exchanges, and that there cannot be annual dollar limits on the coverage of these benefits for all health plans subject to the ACA EHB requirements. If finalized as proposed, this proposed rule would go into effect for plan years beginning in 2026.

On March 4, 2025, a federal district court in Maryland issued a nationwide preliminary injunction in PFLAG, Inc. v. Donald J. Trump (“PFLAG”) blocking two Executive Orders (here and here) that stopped federal funding for medical providers providing gender affirming care for minors. In its opinion supporting the injunction, the court stated that the plaintiffs were likely to succeed with their arguments that the Executive Orders violated the separation powers and the Equal Protection Clause of the U.S. Constitution. As background, the PFLAG case was started by a group of families with transgender or nonbinary children who filed a lawsuit claiming that the pausing of federal funds to these medical facilities had already caused injury to their children through their compromised medical care. This injunction will be in place for the remainder of the litigation.

On February 25, 2025, the Trump Administration issued an Executive Order to enhance healthcare transparency by hospitals and insurers with the aims of increasing patient choice and driving down costs. This Executive Order continues the push for transparency that President Trump spearheaded in his first term with the passage of various transparency laws and regulations, including the Consolidated Appropriates Act of 2021. Additionally, this order builds upon Executive Order 13877 from President Trump’s first term. It directs the Secretaries of Treasury, Labor and Health and Human Services to (1) mandate the disclosure of the actual prices of items and services; (2) issue updated guidance or proposed regulatory action to make pricing information easily comparable across hospitals and health plans; and (3) issue guidance updating enforcement policies that ensure compliance with the reporting of complete, accurate and meaningful data.

On February 21, 2025, the Internal Revenue Service (IRS) issued Notice 2025-15, which provides guidance on how employers and insurers can satisfy the “alternative manner” of furnishing Forms 1095-C and 1095-B (the “Forms”) in accordance with the recently-enacted Paperwork Burden Reduction Act (PBRA). As background, on December 11, 2024, Congress passed the PBRA to ease Affordable Care Act (ACA) requirements for furnishing the Forms to employees and covered individuals. Specifically, the PBRA provides that employers and insurers are no longer required to automatically furnish Forms 1095-C and 1095-B to employees and covered individuals, so long as timely notice has been provided to such individuals. However, the PBRA failed to explain how employers and insurers must provide this notice, and the required content of such a notice. Notice 2025-15 clarifies these rules for this notice requirement. Specifically, this new IRS guidance clarifies that the notice must be posted on the employer or insurer website clearly and conspicuously with a statement that individuals may receive a copy of their Forms upon request. The notice must include an email address, a physical address and a telephone number that individuals can contact if they have questions. The notice must be posted by the due date for furnishing the Form, including the automatic 30-day extension. For example, for 2024 Forms, the employer or insurer providing the coverage must post the notice by March 3, 2025. If requested, the Form must be provided to the individual by January 31 of the year following the year to which the Form relates, or 30 days after request. So, for example, an employee who requests a copy of her Form 1095-C in August of 2025 must be furnished a copy of the 2024 Form 1095-C within 30 days, but would not be entitled to receive the 2025 Form 1095-C until January 31, 2026.

Beginning in 2025, New York insurers will be increasing their premium rates for private employer-sponsored health plans due to New York state’s recent implementation of the Managed Care Organization (MCO) Provider tax. As background, the state of New York enacted the MCO Provider tax on April 20, 2024. This tax on MCOs, HMOs and other insurers in the state, aims to increase the state’s Medicaid reimbursement rates from the Centers for Medicare and Medicaid Services (CMS). After CMS reimburses the state of New York, New York then reimburses these insurers for the taxes assessed on Medicaid plans. For private plans, however, these insurers face an additional cost—ranging from $1.50 to $13 per enrollee per month—with no state or federal offset, unlike with Medicaid.  Accordingly, these insurers are now passing these additional costs on to employers and other sponsors of private health plans in New York.

On February 20, 2025, the U.S. Department of Health and Human Services (HHS) announced that they would rescind previous guidance issued (under the Biden Administration) regarding gender affirming care. As background, on March 2, 2022, HHS published guidance which outlined ways that gender affirming care for minors could be beneficial for medical and mental health outcomes. The decision to rescind comes as an outgrowth of the recently-signed Executive Order by President Trump entitled “Protecting Children from Chemical and Surgical Mutilation”—an Order that directs HHS to issue policies limiting gender affirming care for children under age 19.

On February 18, 2025, President Trump issued an Executive Order entitled “Expanding Access to In Vitro Fertilization,” aiming to reduce costs and promote accessibility to In Vitro Fertilization (IVF). The Order directs the Assistant to the President for Domestic Policy to propose “a list of policy recommendations on protecting IVF access and aggressively reducing out-of-pocket and health plan costs for IVF treatment” within 90 days.

On February 14, 2025, the Maryland Department of Labor (MDOL) issued an update on their website delaying the implementation of the Maryland Family and Medical Leave Insurance (FAMLI) program. Specifically, the MDDOL has delayed implementation of all programs relating to the FAMLI program indefinitely, including applications for private plan alternatives, which were expected to come in May of 2025.

Beginning February 1, 2025, payments from the Blue Cross Blue Shield (BCBS) Class Action Settlement will be paid out. As background, BCBS was sued by a class of providers and members enrolled in BCBS plans alleging that BCBS engaged in anticompetitive behavior by preventing different BCBS plans from competing with each other, impacting the cost of care provided under the plans (see further information in our E-Alert). On October 16, 2020, a settlement was reached in the case which established a $2.67 billion Settlement Fund. Individuals who filed a claim before the November 5, 2021, deadline will begin to receive payouts from the settlement fund in coming weeks.

On February 4, 2025, President Trump imposed 10% tariffs on goods coming from China, while Canada and Mexico have pushed their 25% tariffs off by a month to allow for negotiations. The tariffs were meant to provide leverage for the United States to implement border policies impacting immigration and fentanyl. Consumers may see a secondary area of impact outside of the more well-known goods coming from China—specifically, the cost of generic drugs. Many pharmaceutical ingredients for generic drugs are made in China, and the costs for importing these ingredients will likely increase, which will in turn, increase the price of generic drugs. The 25% tariffs that could be levied on Canadian goods may impact U.S.-based drug importation programs as well. Additionally, the tariffs against Mexico could potentially increase costs for medical devices, as Mexico is a main importer of these devices.

On January 24, 2025, the U.S. District Court for the District of New Jersey dismissed the charges (without prejudice) in Lewandowski v. Johnson & Johnson for failure to prove that the lead plaintiff, Anne Lewandowski, had Article III standing. The class action lawsuit was filed on March 12, 2024, alleging that Johnson & Johnson breached fiduciary duties owed under ERISA by failing to properly oversee its prescription drug program. The lawsuit claimed that this resulted in higher prescription drug costs to the plan causing harm to the plan participants via increased premiums and reduced wages (further detail in our eAlert). The judge ruled that the injury alleged was “speculative and hypothetical” and therefore did not meet the requirements for standing. This is a temporary victory for Johnson & Johnson. The charges were dismissed without prejudice, so the plaintiffs are likely to return with a lead plaintiff that does not have the standing issues that Anne Lewandowski had. Also, a similar case, Navarro v. Wells Fargo, does not suffer from the same shortcomings in standing that the Johnson & Johnson case suffered from.

On January 20, 2025, President Donald Trump issued an executive order that prohibits the use of federal funds to promote what the order refers to as, “gender ideology.” The order defines gender ideology as “an ever-shifting concept of self-assessed gender identity, permitting the false claim that males can identify as and thus become women and vice versa, and requiring all institutions of society to regard this false claim as true,” and “includes the idea that there is a vast spectrum of genders that are disconnected from one’s sex.” While this policy has not impacted employee benefits yet, it signals the approach that the Trump administration will take toward a variety of matters including discrimination under Affordable Care Act Section 1557, rights to gender affirming care, and more.