Over recent months, there has been much speculation on what a Trump 2.0 administration may bring. We are already seeing swift action in the areas of immigration, energy and trade. According to WhiteHouse.gov site, there were 46 Presidential Actions taken on President Trump's first day in office. Despite what we know in other areas, the benefits, tax and health care picture is a little more fuzzy. There are a few areas to watch that are likely to shape the picture in the coming year and beyond.

#1. The Administration -- Unified Republican Government

While the margins are narrow, we do have a unified Government under Republican control. Trump had some lofty campaign promises to maintain tax cuts, add tariffs to international trade, and reduce regulations. While a push to repeal Affordable Care Act (ACA) has mostly quieted down, there is still a strong feeling that ACA needs some changes. We have already seen efforts to reinstate short-term, limited-duration health insurance by House Republicans.

Is big change on the horizon? Maybe.

History tells us that Unified Governments create pathways to big change. The last time Trump held office, Republicans also controlled the House and Senate and we saw the Tax Cut & Jobs Act get passed. ACA was passed under Democratic control.

In recent years, the consumer-driven health (CDH) industry has been focused on trying to get incremental changes passed-- eliminating HSA eligibility challenges, expanding definitions of preventive care, and increasing contribution limits. While it is possible to see some of these incremental changes finally pass, we can't discount the possibility of big change. Concepts such as Universal Savings Accounts or the Healthcare Freedom Accounts tick a lot of the boxes for Republicans regarding tax cuts and regulatory simplification. These could spell a good news, bad news scenario for third-party administrators that thrive on providing solutions that ensure regulatory compliance.

We can't discount the possibility of big change. Concepts such as Universal Savings Accounts or the Healthcare Freedom Accounts tick a lot of the boxes for Republicans regarding tax cuts and regulatory simplification.

 #2. Tax code will be under review in 2025

The Tax Cut and Job Act, along with other tax provisions, are expiring at the end of 2025. Doing nothing will bring about change. To keep what we have today will cost an estimated $4.5T. A review of the tax code is imminent. While Trump has vowed to extend tax cuts, a group of five Republicans have already voiced their opposition to the current cap on State and Local Tax (SALT).

Simultaneously, through an Executive Order, the President has ordered the establishment of the Department of Government Efficiency (DOGE) which he has indicated will be led by Elon Musk. Initial reports touted a $2T target in budget deficits but more recent interviews suggest $1T will more likely be the target.

As the tax code comes up for debate, we will likely see competing forces at play where tax cuts and spending expectations are at odds. While consumer-driven health accounts have traditionally been viewed favorably by Republicans, we have also seen situations where consumer-driven health accounts (or elements of them) have been sacrificed for larger budgetary mechanisms. This begs the question, what will make it into tax reform and what becomes a sacrifice in bargaining? Doing nothing will bring about change and to keep what we have today will cost an estimated $4.5T.

#3. Regulatory environment & enforcement

There are a few interesting dynamics likely to come into play when considering the regulatory environment.

Republicans Favor Deregulation

It is widely known that Republicans tend to favor deregulation. Regulation can be viewed as an overstep of the freedoms afforded to citizens and businesses. Trump has been outspoken in need to rollback regulations that affect energy production and those that inhibit financial commerce (such as crypto currency). Technology sector is also optimistic of deregulation as evidenced by strong support from tech power players like Elon Musk, Jeff Bezos and Mark Zuckerburg.

Existing Regulatory Interpretations at Risk for Challenge

We often forget there is a distinct difference between laws and regulations. Laws are the legal principles of governance that are created by elected officials. Regulations are the rules and guidelines set by agencies to oversee specific activities. For the last forty years, the Chevron deference required courts to defer to agency interpretations regarding compliance. In 2024, the Supreme Court overruled Chevron deference and the default power that was granted to administrative agencies in the interpretation of ambiguous laws.

In the scope of CDH, this action opens the door for future challenges to the existing regulatory standards and assumptions that have largely governed consumer-driven benefits and other tax-advantaged accounts. The long-held standards regarding debit card rules, substantiation practices, and expense eligibility were all set through regulatory interpretation, and some were never even finalized.

Newer entrants to the consumer-driven health account industry are already challenging the status quo with aggressive use of the Letter of Medical Necessity (LMN) to expand what is eligible under these programs. Just this week, Orange Theory announced it would accept FSA/HSA payments for memberships when a LMN is obtained. Further, they have partnered with Dr. B to obtain an LMN if you cannot get one from your provider. This is just one example in a series over the last year.

Given current sentiment towards regulations, combined with challenges to legal precedence and competitive forces, there is likely to be a shake-up to the current standards of administering consumer-driven benefits.

What does it all mean? Be ready for change.

While the specific picture of health care and tax priorities are still in early formation, all signs indicate we are in for some change. You can deny it, fight it, prepare for it or find a way to take advantage of it. What do you think? Be sure to share your comments.

DISCLAIMER: This article is an opinion, is for informational purposes only, and does not constitute legal, tax or regulatory advice. Consult with a qualified professional before making any decisions.

This article was originally written for Angel Wisdom Newsletter. Subscribe of LinkedIn.