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. 



  • 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.

Pay or Play Affordability Percent Will Decrease for 2024

On Aug. 23, 2023, the IRS issued Revenue Procedure 2023-29 to index the contribution percentage in 2024 for determining the affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning in 2024, employer-sponsored coverage will be considered affordable under the ACA’s pay or play rules if the employee’s required contribution for self-only coverage does not exceed 8.39% of their household income for the year.



  • The affordability contribution percentage for 2024 (8.39%) is a significant decrease to the affordability threshold.
  • Applicable large employers (ALEs) will need to consider this affordability percentage in developing their health plan contribution strategies for the 2024 plan year.
  • ALEs may have to lower the amount employees have to contribute for 2024 to meet the lowered percentage.

If you have questions related to either of these updates, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.

This regulatory update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.