One of the first acts of the new Administration on Inauguration Day was to issue a memorandum putting the brakes—at least temporarily—on federal regulations that have not yet taken effect, and to release an executive order authorizing agencies and departments to “minimize the unwarranted economic and regulatory burdens” of the Affordable Care Act. These two actions are the first of several presidential orders and memoranda expected in the days and weeks to come.
The memorandum the President’s chief of staff, Reince Priebus, issued to the heads of executive departments and agencies is nearly identical to the memorandum former Chief of Staff Rahm Emanuel issued in 2009. The memorandum directs agencies to suspend for 60 days all proposed and final regulations that have not yet taken effect. The purpose of doing so is to give the incoming Administration a chance to review and approve new or pending regulations. After this 60-day grace period, agencies can either take no further action if the pending rules “raise no substantial questions of law or policy,” or notify the Director of the Office of Management and Budget if significant issues are found during the review. The regulatory freeze does not apply to regulations that must be issued per court order or statute.
As a practical matter for employers, this means that a number of rules that have already been put on hold through legal injunctions—including the “white collar” overtime exemption rule, the persuader rule, and the contractor disclosure and arbitration portions of the “blacklisting” rule–appear to be subject to the new Administration’s review. Other rules that have not yet taken effect, such as the Occupational Safety and Health Administration’s final rule on occupational exposure to beryllium, also fall under this second-look umbrella. The beryllium rule was slated to take effect on March 10, 2017.
While a temporary freeze does not mean these rules will necessarily be rescinded, it should give employers some hope that the DOL and Federal Regulatory Acquisition (FAR) Council under the new Administration will be more receptive to employer concerns about these regulations. It is possible the new Administration will decline to defend the legal challenges posed to the rules that have been temporarily enjoined. The Administration could also rescind a rule and possibly re-issue a revised one via the notice-and-comment process. Time will tell.
Affordable Care Act
One of the first executive orders signed by the President addresses the Affordable Care Act. The order declares:
It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act (Public Law 111-148), as amended (the “Act”). In the meantime, pending such repeal, it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.
Agency heads are permitted to
exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.
Repealing and replacing the ACA was central to the President’s campaign platform. This process will require legislative action. Nonetheless, the order, signed as one of Trump’s first acts in office, is a largely symbolic measure to advance this goal.
The President’s first 100 days in office are expected to be eventful. We will continue to closely monitor these developments.