Employee Benefits Compliance Updates: Gag Clause Attestations & Pay or Play Affordability Percentage

Outlined below are two employee benefits compliance updates. The first update covers the prohibition of gag clauses under the transparency provision of the Consolidated Appropriations Act, 2021 (CAA), and the second update explains the pay or play affordability percentage for 2024.

Health Plans Must Submit Gag Clause Attestations by Dec. 31, 2023

On Feb. 23, 2023, the Departments of Labor, Health and Human Services, and the Treasury (Departments) issued FAQs on the prohibition of gag clauses under the transparency provisions of the Consolidated Appropriations Act, 2021 (CAA). These FAQs state that health plans and health insurance issuers are required to submit their first attestation of compliance with the CAA’s prohibition of gag clauses by Dec. 31, 2023. 

Highlights

• Health plans and issuers must ensure their agreements with providers, third-party administrators (TPAs), and other service providers do not include prohibited gag clauses.
• Health plans and issuers must submit an annual attestation of their compliance with the CAA's gag clause prohibition.
• The Departments may take enforcement action against plans and issuers that do not submit the required attestations in a timely manner.

Action Steps for Employers

Employers should ensure any contracts with TPAs or other health plan service providers offering access to a network of providers do not violate the CAA’s prohibition of gag clauses. Also, employers with fully insured or self-insured health plans should prepare to provide the compliance attestation by Dec. 31, 2023. If the issuer for a fully insured health plan provides the attestation, the plan does not also need to provide an attestation. Also, employers with self-insured health plans can enter into written agreements with their TPAs to provide the attestation, but the legal responsibility remains with the health plan.