President Halts Regulations, Issues ACA Executive Order

Shortly after President Trump’s inauguration, the White House released a memorandum asking all executive agencies to freeze pending regulations so the new Administration has time to review them. President Trump also signed an executive order to roll back parts of the Affordable Care Act (ACA).

In sum, the White House memo withdraws any regulations which the Obama Administration was not able to publish in the federal register before Jan. 20. It also pauses regulations that have been published but are not yet final for a 60-day review period. In 2009, the Obama Administration issued a similar memo.

Regarding insurance, the ruling pauses a pending regulation that seeks to clarify when banks can and must accept private flood insurance as security on a home loan to satisfy federal mandatory purchase requirements.

It also halts a proposal released the day before inauguration that aims to make it easier for independent marketing organizations (IMOs) to distribute certain annuities under the Department of Labor (DOL) fiduciary rule finalized last year. The IMO proposal could ultimately be withdrawn; however, although the fiduciary rule has yet to be fully implemented, it became effective last summer—which means it cannot be withdrawn without following notice and comment requirements of the Administrative Procedures Act (APA). The Administration is currently reviewing options for amending, delaying or withdrawing the fiduciary rule, so the IMO impact could be a moot point.

Similarly, the DOL overtime rule is not subject to the memo, so changing it would also require following lengthy APA notice and comment requirements. The rule, which increases the number of employees eligible for overtime pay, was supposed to take effect last year but was delayed pursuant to lawsuits filed by the Big “I,” other business groups and 21 state governments. Whether the Trump Administration will continue to defend this lawsuit or take steps to change or reverse the rule is not clear at this time.

Finally, President Trump issued an executive order instructing federal agencies to help relieve financial and regulatory burdens created under the ACA. The order does not list any specific regulations for action, but could include tactics such as relaxing enforcement of the tax penalty for individuals who fail to carry health insurance. While the executive order signals that the Administration is serious about efforts to repeal the ACA, it is too early to predict its exact ramifications.

Jennifer Webb is Big “I” federal government affairs counsel.