Since President Donald Trump took office in January 2025, the U.S. Department of Labor (DOL) has modified its policies on various issues related to employee benefits. These policy changes include a pause on mental health parity enforcement, rescission of guidance on cryptocurrency for 401(k) plan fiduciaries, and replacement of the environmental, social, and governance (ESG) rule when retirement plans are choosing investment options.
DOL's Pause on Mental Health Parity Enforcement
In May 2025, the DOL announced that it would pause its mental health parity enforcement affecting employer health plans. The impetus for this policy shift is a pending lawsuit filed by the ERISA Industry Committee (ERIC) looking to prevent the implementation of a Biden administration-era rule from September 2024.
Nonetheless, under a 2020 law, health plans that are subject to the Employee Retirement Income Security Act (ERISA) still have certain responsibilities to review their coverage for mental health and substance use disorder treatments. The purpose of these duties is to enforce long-standing federal parity laws that prevent plans from limiting coverage for behavioral health coverage to a greater degree than medical health coverage. These plans must perform a comparative analysis of their non-quantitative treatment limitations (NQTLs) on this type of coverage.
However, the final rule issued in September imposed significantly more detailed requirements for the analysis of plans' NQTLs. Plan attorneys characterized the requirements as burdensome, and in some cases, "impossible" to meet.
According to the DOL and other federal agencies, the mental health parity enforcement freeze will extend through the resolution of ERIC's lawsuit challenging the rule, plus an additional 18 months. Announcement of the enforcement freeze also included plans to not only rescind and/or modify the final rule, but also to reexamine how federal agencies enforce federal parity laws in general.
Cryptocurrency Guidance for Retirement Plans Withdrawn by DOL
On May 28, 2025, the Employee Benefits Security Administration (EBSA) of the DOL issued Compliance Assistance Release No. 2025-01. This compliance assistance release document rescinds 2022 guidance from the Biden administration cautioning ERISA plan fiduciaries about offering cryptocurrency investment options in 401(k) plans. The guidance, which cited concerns about the risks of such an investment, resulted in a legal challenge from a 401(k) provider against the DOL.
Given Trump's enthusiasm for cryptocurrency, as well as his own Trump coin, benefits attorneys expected the DOL to roll back the guidance. Although the DOL never enforced the guidance, many ERISA plan fiduciaries saw it as a deterrent to offer crypto in their plans.
Replacement of the ESG Investing Rule
Another significant change occurred at the DOL on May 28, 2025, when the agency informed the U.S. Court of Appeals for the Fifth Circuit of its intention to replace a Biden administration rule concerning so-called ESG investing. The rule stated that fiduciaries could take environmental, social, and governance (ESG) factors into account when choosing investment options for retirement plans. Although the rule did not require fiduciaries to consider ESG factors, it reversed a policy from the first Trump administration that placed restrictions on how plans could consider ESG factors.
The DOL divulged its plans in a status report filed in a legal challenge by a group of Republican attorneys general who are seeking to invalidate the DOL's 2022 ESG investing rule. A Texas federal judge first dismissed the court case in 2023. However, the Fifth Circuit overturned the dismissal following the U.S. Supreme Court's decision in Loper Bright Enterprises v. Raimondo. Loper overturned the historic Chevron ruling that required judicial deference to federal agencies' interpretations of laws. On remand, the judge again dismissed the case in February 2025.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
