This bill repeals by statute the final interagency regulation titled "Short-Term, Limited-Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage" (89 Fed. Reg. 23338, April 3, 2024).
It states simply that the referenced rule "shall have no force or effect."
Although short and mechanically phrased, the bill has practical reach: it directs that a specific joint rule issued by the Internal Revenue Service, the Employee Benefits Security Administration, and the Department of Health and Human Services loses legal effect nationwide. That creates immediate questions about which regulatory standards now govern short‑term plans and excepted benefits, and about how agencies and market participants should treat actions taken under the rule while it was in force.
At a Glance
What It Does
The bill declares the cited April 3, 2024 final interagency rule to have "no force or effect," effectively nullifying that rule by statute. It does not substitute any new regulatory standard or create a transitional framework for prior agency actions under that rule.
Who It Affects
The change touches federal agencies (IRS, DOL/EBSA, HHS) that issued the rule, insurers that offer short‑term limited‑duration plans and excepted benefits, brokers and employers marketing those products, and consumers who buy them. State insurance regulators will also face interaction questions with any federal gap left by nullification.
Why It Matters
A statutory nullification removes an existing federal regulatory constraint and can reopen the market and administrative practices it governed, but the bill’s silence on implementation and savings clauses raises immediate legal and operational uncertainty for regulators, carriers, and consumers.
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What This Bill Actually Does
The bill is short and procedural: it names a specific interagency final rule and declares it to have "no force or effect." Practically, that means the regulation issued jointly by the IRS, EBSA, and HHS on April 3, 2024 would be stripped of legal authority if this statute were enacted. The statute does not amend other laws, create new standards, or direct agencies to undertake follow-up rulemaking.
Because the bill targets a single final rule rather than amending the statutes that authorized the agencies, the agencies retain their underlying statutory authorities (for example, tax, ERISA, and public‑health authorities), but they lose the particular regulatory text specified in the citation. The bill also contains no language preserving actions taken under the rule while it was in effect (no savings clause), nor does it state whether agency decisions, enforcement actions, or private contracts that relied on the rule remain valid.On the ground, nullification would likely mean parties and regulators revert to the regulatory baseline that existed before the April 3, 2024 rule—unless and until agencies issue new rules or guidance.
That creates a gap between the statutory declaration and operational reality: insurers and brokers must decide whether to revert underwriting, marketing, and plan design to prior practices; agencies must decide whether to publish guidance, reopen rulemaking, or litigate; and states must determine how their oversight works alongside a federally voided rule.
The Five Things You Need to Know
The bill explicitly identifies the target: the final interagency rule "Short‑Term, Limited‑Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage," 89 Fed. Reg. 23338 (April 3, 2024).
It uses a direct statutory device: the rule "shall have no force or effect," which nullifies the regulation without amending the underlying statutes that authorized agency rulemaking.
The nullification is narrow in text but broad in effect: it reaches a single, interagency final rule issued by IRS, EBSA (DOL), and HHS, so three distinct regulatory regimes are implicated.
The bill contains no transitional language or savings clause—there is no express statement preserving past agency actions, pending enforcement, or private contracts made while the rule was in force.
The statute does not direct agencies to adopt alternative rules or guidance, leaving agencies, insurers, and states to resolve compliance and enforcement questions through guidance, new rulemaking, or litigation.
Section-by-Section Breakdown
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Short title
Names the measure the "Healthcare Freedom and Choice Act." This is standard drafting; the short title has no substantive legal effect but signals the sponsor’s framing of the policy change.
Nullification of the April 3, 2024 interagency rule
Declares that the specific final rule published at 89 Fed. Reg. 23338 (April 3, 2024) "shall have no force or effect." Practically, this strips the cited regulatory text of legal authority across the federal system. The provision is narrowly worded—targeting that rule only—and does not amend tax, ERISA, or public‑health statutes, nor does it instruct agencies how to proceed after nullification. That narrowness accelerates legal ambiguity about the status of enforcement actions, administrative interpretations, and private arrangements that depended on the now‑voided rule.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Short‑term limited‑duration insurers and brokers — Nullifying the rule removes a federal regulatory constraint that may have limited product design, duration, or marketing, potentially enabling expanded offerings and sales practices that were restricted under the cited rule.
- Employers and sponsors offering excepted benefits — Organizations that used or contemplated offering independent excepted‑benefit products may regain flexibility in plan design and coordination with group health plans.
- Consumers seeking lower‑cost, temporary coverage — Individuals looking for short‑term or gap coverage may find broader availability and variety of lower‑priced products if carriers reintroduce pre‑rule plan designs.
- Some state insurance regulators favoring market flexibility — States that resisted the federal rule’s standards may find fewer federal constraints to contend with when supervising insurers domestically.
Who Bears the Cost
- Individual market carriers underwriting ACA‑compliant plans — Greater availability of short‑term, noncomprehensive products can exacerbate adverse selection in the comprehensive individual market, raising premiums and risk for compliant insurers.
- Consumers with preexisting conditions and coverage gaps — If the change leads to wider distribution of noncomprehensive plans that exclude preexisting condition protections, those consumers may face reduced protection or unexpected out‑of‑pocket costs.
- Federal agencies (IRS, DOL/EBSA, HHS) — Agencies must decide whether to reissue guidance or rules, manage enforcement discontinuities, and potentially defend statutory nullification in court, imposing administrative and litigation costs.
- State regulators and courts — States may see market disruption and litigation over product filings and consumer protection claims, and will need to coordinate oversight absent the federal rule’s framework.
Key Issues
The Core Tension
The central trade‑off is between reinstating regulatory flexibility (and consumer choice in the short‑term market) and preserving market stability and consumer protections that depend on uniform federal rules; the bill eliminates the latter by statute without prescribing how to protect the public interest going forward, forcing agencies, insurers, states, and courts to reconcile competing priorities in the absence of a clear legal framework.
The bill solves a single problem—removing a named regulatory text—but it creates several implementation and policy problems. First, by omitting a savings clause, the statute leaves unclear whether actions taken under the rule while it was effective (for example, agency guidance, insurance filings, or enforcement decisions) survive.
That gap invites litigation and administrative confusion about the legal status of past agency approvals or penalties.
Second, the bill replaces a regulatory constraint with a regulatory vacuum. Because it does not amend the underlying statutes or instruct agencies to issue new rules, the operational effect depends on follow‑on agency choices and state regulatory responses.
Markets and consumers may experience rapid change (product relaunches, altered marketing), but those shifts might be uneven across states, and could lead to increased adverse selection in comprehensive markets.
Third, the statute raises federalism and preemption questions. The interagency rule likely interacted with ERISA and state insurance laws; nullifying it reopens disputes about whether federal or state law governs specific product features and whether ERISA preemption applies to employer‑sponsored excepted benefits.
Agencies and courts will have to sort those conflicts without new statutory guidance.
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