February 2, 2017Client Alert

Two-for-One Executive Order – Impact on Health Care Reform

Starting his second full week in the Oval Office, President Trump issued an executive order aimed, he said, at reducing regulations’ “damaging effect on small business, the economy and our entrepreneurial spirit.” The executive order:

  • Instructs that at least two regulations should be identified for elimination with each new regulation that is proposed or issued (a “two-for-one” approach to deregulation); and
  • Dictates that the total cost of all new regulations issued in 2017 be zero (factoring in money saved through repealing other regulations), which will be determined by the Office of Management and Budget.

As a result of this executive order, it would appear as though some recent employment rules might be subject to elimination, including the Fair Labor Standards Act’s 2016 overtime rule, the Occupational Safety and Health Administration's anti-retaliation/injury reporting rule, and the Equal Employment Opportunity Commission’s changes to its annual data reporting rules, as discussed here.

While these rules and other easily targeted rules may be identified for elimination, the process of actually repealing a regulation can often be more onerous than initially promulgating one. The speculated impact may be the writing – and promulgation – of fewer regulations, rather than drastically slashing any existing regulations. Interestingly, this executive order defines the term “regulation” or “rule” differently than it was defined in the “Regulatory Freeze Memorandum” issued by the Administration on Inauguration Day. While functionally, the two different definitions are likely to cover the same types of guidance, in this case, “regulation” or “rule” clearly covers a broad group of regulatory and sub-regulatory announcements, including any “agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency.”

With the Trump Administration directive to repeal and replace the Affordable Care Act (ACA), the impact on implementation of a yet-to-be developed or adopted health care replacement law is unknown. One thing seems likely—the regulations issued to implement the ACA will not be as prolific with the “new” health care replacement law. Around the third anniversary of the ACA, a series of articles were issued “fact checking” Senator Mitch McConnell’s (R-KY) claim that there were 33,000 pages of ACA regulations. Many outlets ended up estimating 20,000 pages of regulations had been issued as of early 2013, and the guidance continued copiously through the eve of Inauguration Day (the latest FAQ, round 37, was issued by the Department of Labor on January 12). This is not likely to be repeated when we get new health care legislation as guidance elucidating implementation is likely to be sparse.

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