The United States Supreme Court upheld the requirement that preventive services under the Affordable Care Act (ACA) must continue to be provided at no cost to the insured. A newly enacted law limits the federal taxation of overtime compensation. The Department of Labor (DOL) has issued a plan to rescind 63 regulations and also approved including cryptocurrency investments in 401(k) plans.

Supreme Court Upholds ACA Preventive Services Coverage – In a 6 – 3 decision, the United States Supreme Court ruled that the appointment of members of the U.S. Preventive Services Task Force whose recommendations under the Affordable Care Act (ACA) must be covered at no cost to the insured did not violate the Appointments Clause of the Constitution. According to Justice Kavanaugh, who wrote the majority opinion in the case of Robert Kennedy, Jr., Secretary of Health and Human Services v. Braidwood Management, Inc., there was a need to determine whether the members of the Task Force were either inferior officers who under the Appointments Clause could be appointed by the Secretary of the Department of Health and Human Services (HHS) or if they were principal officers who must be nominated by the President and confirmed by the Senate. Justice Kavanaugh concluded that since the Task Force members are supervised and directed by the HHS Secretary who also has the power to remove them, the Task Force members are inferior officers and appointment of them by the “Secretary of HHS is consistent with the Appointments Clause.”

This case was brought by several individuals and small businesses who object to the preventive services coverage requirement of the ACA. Braidwood Management, the lead plaintiff had a self-insured health plan for its employees and wanted to exclude coverage for certain drugs and to impose copays or deductibles for other covered services. Both the District Court and the U.S. Court of Appeals for the Fifth Circuit agreed with the plaintiffs that the Task Force members are principal officers who must be appointed by the President and confirmed by the Senate.

The Task Force consists of 16 members who are appointed by the HHS Secretary and issue public recommendations about preventive healthcare services such as cancer and diabetes screenings, nicotine patches for those trying to quit smoking, and statin medications to reduce the risk of heart disease and stroke. Before 2010, their recommendations were advisory but with the passage of the ACA, health insurers are required to cover some of the recommended services at no cost to the insured.  The Task Force selects topics to study and following their review issues ratings. The Task Force has given an A or B rating to more than 40 preventive services and the ACA requires no cost coverage of those services receiving either of these ratings. The Supreme Court majority believed that the Task Force members were inferior officers because the HHS Secretary had the power both to remove Task Force members and to review and block the recommendations of the Task Force before they went into effect.

Tax on Overtime Eliminated – Included in the recent bill enacted by Congress and signed by President Trump, is a provision eliminating tax on overtime compensation. The provision is retroactive to January 1, 2025, and expires at the end of 2028. The law establishes a deduction on the federal income tax returns of eligible individuals for their overtime pay. The maximum deduction is $12,500 for individuals and $25,000 for joint returns. A full deduction is available for those with adjusted gross incomes up to $150,000 or $300,000 for joint returns and the deduction amount is reduced for incomes above these amounts. The tax exemption applies to the additional amount beyond the regular rate of pay that individuals receive for working more than 40 hours in a workweek. For example, employees earning $10 per hour who work overtime would receive $15 per hour and the extra $5 per hour in overtime pay would be exempt from federal taxation. Since the benefit is claimed on federal tax returns, employees would still have federal income taxes withheld on the entire amount that they are paid. Employers will need to report overtime compensation on the W-2 form provided to employees. The Treasury Department has 90 days to issue regulations.

DOL Releases Plan to Rescind Regulations – The Department of Labor (DOL) announced its deregulatory efforts that include 63 deregulatory actions aimed at “reversing the costly and burdensome rules imposed under previous administrations…” Deputy Secretary of Labor Keith Sonderling stated, “The Department of Labor’s actions are unprecedented, slashing more than 60 obsolete and burdensome regulations impacting American workers.” DOL noted that President Trump issued an executive order, “Unleashing Prosperity through Deregulation” that directed federal agencies to eliminate ten existing regulations for every new rule.

Among the regulations to be rescinded are:

• The Office of Federal Contract Compliance Programs (OFCCP) implementing regulations under Executive Order 11246, which was revoked by President Trump in Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This executive order “directed DOL to immediately cease the following: promoting diversity, holding federal contractors and subcontractors responsible for taking affirmative action, and allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” Due to the revocation of Executive Order 11246, DOL concluded that it had to rescind this executive order’s implementation regulations.
• A proposal to amend the OSHA 300 injury log that would have added a column that employers would use to record work-related musculoskeletal disorders.
• A proposed rule canceling the authority to pay a subminimum wage to individuals with disabilities.
• A 2013 rule that narrowed the definition of companionship services under the Fair Labor Standards Act so that the minimum wage and overtime requirements applied to those providing such services.  This regulation is being rescinded since the DOL believes that the regulations “might not reflect the best interpretation of the FLSA and might discourage essential companionship services by making these services more expensive.”

DOL Okays Including Cryptocurrency Option in 401(k) Plans – The Department of Labor (DOL) issued Compliance Assistance Release 2025-01 that rescinds Compliance Assistance Release 2022-01 that directed plan fiduciaries to exercise "extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants." DOL believes that the standard of "extreme care" is not found in the Employee Retirement Income Security Act (ERISA) and differs from ordinary fiduciary principles. In a footnote, DOL indicated that ERISA requires that a fiduciary select investments “with the care, skill, prudence, and diligence under the circumstances then prevailing…for the exclusive purpose of maximizing risk-adjusted financial returns to the plan’s participants and beneficiaries.” Prior to the 2022 release, the DOL advised that it had usually taken a neutral approach to specific investments. The DOL stated that the 2025 release, “restores the Department's historical approach by neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan's investment menu is appropriate. When evaluating any particular investment type, a plan fiduciary's decision should consider all relevant facts and circumstances and will necessarily be context specific."