On January 20, 2025, the Trump administration issued an executive order redefining the terms sex, gender identity, and related concepts as they pertain to federal law and policy. These changes will affect compliance requirements across various employee benefit provisions and related regulations.
Key Provisions of the Executive Order
Revised Definitions
The Executive Order revised the definition for many terms related to sex and gender, including most notably the concept of gender ideology.
- Sex: “An individual’s immutable biological classification as either male or female” which is determined “at conception” and expressly excludes “gender identity.”
- Gender Identity: “A fully internal and subjective sense of self, disconnected from biological reality and sex and existing on an infinite continuum, that does not provide a meaningful basis for identification and cannot be recognized as a replacement for sex.”
- Gender Ideology: A concept that “replaces the biological category of sex with 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 Gender ideology includes the idea that there is a vast spectrum of genders that are disconnected from one’s sex.”
Mandates for Federal Agencies
In addition to calling on Congress to codify the revised definitions within 30 days of the Executive Order, it directs federal agencies to:
- Use these new definitions when interpreting or applying statutes, regulations, or guidance and in all other official agency business, documents, and communications.
- Replace “gender” with “sex” in all policies, forms, and communications
- Remove and refrain from issuing materials that promote or incorporate “gender ideology” including by ceasing to use materials that request an individual’s gender identity instead of or in addition to their sex
Recission of Prior Policies
Several executive orders from the Biden administration expanding protections based on gender identity and sexual orientation have been revoked, including:
- Executive Order 13988: Preventing and Combatting Discrimination on the Basis of Gender Identity or Sexual Orientation
- Executive Order 14075: Advancing Equality for LGBTQI+ Individuals
Implications for Employers
The Executive Order marks a significant policy shift that may affect federal agency interpretation of nondiscrimination rules for employers and group health plan administration. This will immediately affect ACA Section 1557 nondiscrimination testing and policies. During the Biden administration, the Department of Health and Human Services (HHS) interpreted Section 1557 nondiscrimination on the basis of sex to include sexual orientation and gender identity. Under May 2024 final regulations, insurers were prohibited from providing or administering coverage, denying or limiting coverage, or designing plans that discriminated on the basis of sex – including sexual orientation and gender identity. Current nondiscrimination policies may soon require review and revision to align with the federal definitions.
Any change in administration brings policy differences and changes in compliance focus; however, the new administration has issued policy changes more rapidly and employers need to stay abreast of the changes to avoid compliance pitfalls, and conflict between federal and state law requirements. Employers should also expect legal challenges to these Executive Orders and possible legislation or regulatory updates.
Employer Action Items
- Monitor agency guidance. Continue current compliance efforts while monitoring additional guidance on implementing the new definitions and compliance requirements for Section 1557.
- Compliance and Prepare for new compliance requirements, particularly in benefits administration and nondiscrimination testing.
- Communicate with vendors. Engage with your benefits consultants and third-party vendors to evaluate any necessary changes to health plan designs, coverage offerings, or compliance measures
- Educate your teams. Provide training to HR and compliance teams on the new federal definitions and how they impact workplace policies and benefits administration as new guidance arises.
- Stay prepared for litigation risks. Be aware of potential legal challenges, especially in jurisdictions where state or local laws conflict with the new federal policies.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.
