Third Quarter Benefit News Highlights

This quarter brought 10 key updates in employee benefits—from paused marketplace changes to a revised CHIP model notice and a crucial reminder about the gag clause attestation deadline. Read more to stay ahead of compliance shifts that could impact you and your employees.

1. Gag Clause Attestation Reminder

Under the Consolidated Appropriations Act (CAA), group health plans and issuers are prohibited from entering into contracts that contain gag clauses—terms that restrict access to provider cost, quality data, or de-identified claims information. To demonstrate compliance, plans must submit an annual attestation to the Departments of Labor, Health and Human Services, and the Treasury. The next attestation is due December 31, 2025, and must be submitted electronically. Employers with fully insured plans may rely on their issuer to submit the attestation, while those with self-insured plans must either submit it themselves or ensure their third-party administrator (TPA) agrees to do so in writing.

Failure to submit the attestation may result in enforcement action, even if a plan is aware of and discloses a prohibited gag clause. Employers should review their contracts now to confirm compliance and avoid last-minute issues.

The full article can be found here. The Departments have provided instructions for submitting the attestation, a system user manual, and FAQs, all of which are available here. The website for submitting the attestation is available here.

2. DOL Spring Agenda

The Department of Labor’s (DOL) Spring 2025 regulatory agenda includes several initiatives focused on health and welfare benefit plan transparency, nondiscrimination, and disclosure requirements. Overall, the agenda shows a continued regulatory push toward participant protections and plan transparency. Items of interest for health and welfare benefits include:

  • Default electronic disclosure/notice rules;
  • Further transparency into pharmacy benefit manager fee disclosures;
  • Guidance for the advanced explanation of benefits;
  • Provider nondiscrimination requirements;
  • Requirements for air ambulance services; and
  • Clarification for broker disclosures.

The DOL's full spring agenda can be found here.

3. Certain Marketplace Changes Paused

On August 22, 2025, a U.S. District Court Judge issued a preliminary injunction blocking several provisions of the new “Marketplace Integrity and Affordability Rule,” which had been set to take effect shortly and would likely have affected coverage for individuals beginning in 2026. The rule would have imposed stricter income verification, premium penalties for auto-re-enrollees, exclusions for individuals with unpaid premiums, and tighter eligibility checks for special enrollment periods. The judge found that plaintiffs were likely to succeed on their Administrative Procedure Act claims and that the changes risked irreparable harm by pushing millions off coverage. Some provisions of the rule will proceed (e.g., changes to cost-sharing calculations and the elimination of the 60-day reconciliation window for income discrepancies). Still, the ruling temporarily preserves broader access to Marketplace individual coverage while litigation continues over whether the rule unlawfully undermines the ACA’s protections. The text of the opinion can be found here.

4. Provider Directories – Ghost Networks

A growing wave of lawsuits targets inaccurate provider directories, primarily focused on mental health providers, resulting in some significant settlement payments and corrective action. Research revealed that many mental health providers listed in plan directories were unreachable, not accepting patients, or not actually in-network—commonly referred to as “ghost providers.” For employers sponsoring group health plans, this poses both a compliance and a reputational concern. Employers are encouraged to encourage their carriers and TPAs to perform regular provider verification (at least quarterly) and to provide transparency regarding how inaccuracies are detected and addressed.

5. Short-Term Limited Duration Insurance – Possible Resurgence?

Individual short-term limited duration insurance (STLDI) plans are not subject to the same requirements as comprehensive individual health insurance and may exclude coverage for pre-existing conditions. Historically, STLDI plans were limited to a maximum of three months of coverage. In 2018, the Trump administration expanded these plans, allowing for initial coverage of up to 12 months with renewals permitted for up to 36 months total. In contrast, the Biden administration issued final rules—effective in late 2024—restricting STLDI coverage to a maximum of three months, with a one-month extension permitted in some instances, and requiring enhanced consumer notices.

Recent guidance from the Trump administration indicates an intent to roll back the Biden-era restrictions and restore the longer duration limits, potentially allowing policies to extend up to one year with renewals for a total of three years. While formal rulemaking is pending, the administration has announced that it will not enforce the 2024 rules in the interim.

Note: Despite this federal non-enforcement stance, many states continue to impose their own restrictions on, or may even prohibit, STLDI plans. The statement can be found here.

6. Court Decision – MHPAEA Enforcement

A recent federal district court’s ruling in Perrone v. Blue Cross Blue Shield of Michigan reinforces that health plan participants can pursue Mental Health Parity & Addiction Equity Act (MHPAEA) claims under ERISA, making clear that mental health parity violations are judicially enforceable. This decision contributes to a growing body of case law showing that courts are willing to entertain MHPAEA lawsuits claiming a lack of parity in how a plan treats mental health or substance use disorder (MH/SUD) benefits compared to medical/surgical ones. The case highlights the growing importance of proactively auditing any financial requirements or treatment limitations imposed on MH/SUD benefits—particularly non-quantitative treatment limitations (NQTLs), such as network restrictions and utilization management—and thoroughly documenting these reviews as part of the required NQTL written comparative analysis. The full text of the court opinion can be found here.

7. Prescription Drug Management

The Trump administration continues to advance its commitment to lowering prescription drug prices, centered on a revived “Most-Favored-Nation” model. A recent executive order directs federal agencies to benchmark U.S. drug prices against the lowest prices paid in comparable countries, while also expanding direct purchasing and reimportation programs for drugs. To further pressure manufacturers, the administration has threatened steep tariffs on imported pharmaceuticals.

At the state level, legislatures have introduced over 800 bills in 2025 aimed at improving prescription access and reducing consumer costs. These proposals include capping out-of-pocket expenses, regulating pharmacy benefit managers (PBMs), supporting state affordability boards, and addressing high-cost therapies and pricing trends. An overview of state efforts is available in the National Conference of State Legislatures’ (NCSL) summary, which can be found here.

While state initiatives focus on consumer protections and targeted regulatory reforms, the federal strategy under the Trump administration places a strong emphasis on international price comparisons, trade leverage, and structural market changes. We can only hope these combined efforts will eventually lead to more affordable prescription drugs.

8. Updated CHIP Model Notice

The DOL provided an updated CHIP model notice with information that is current as of July 31, 2025. The State Premium Assistance Notice for Medicaid and CHIP informs employees of potential opportunities for premium assistance available in their state of residence. Employers are required to distribute the CHIP notice annually to all eligible employees who live in a state offering premium assistance, so most employers distribute the notice to all employees who are eligible for the employer’s group health plan during each open enrollment, likely as part of their benefits summary or in an annual notice packet. Employers should always use the most current model notice when distributing it. The recently updated version of the CHIP notice is available here.

9. PCORI Fee Reminder

The PCORI fee for group health plans that ended sometime during 2024 must be reported and paid by July 31, 2025. Health insurance carriers pay the fee on behalf of fully-insured plans, but employers are responsible for reporting and paying the fee for any self-funded group health plans, including HRAs. The fees due in July 2025 are as follows:

  • $3.22 per covered life for plan years ending in January – September 2024
  • $3.47 per covered life for plan years ending in October – December 2025

Average covered lives used for reporting and paying the PCORI fee may be determined using one of three methods:

  1.  The actual count method;
  2.  The snapshot method;
  3.  The Form 5500 method

The fee is reported and paid by employers sponsoring self-funded group health plans using quarterly excise tax Form 720, Lines 133(c) and (d), and should be filed for the second quarter ending June 30, 2025.

10. Form 5500 Extensions – Calendar Year Plans

The Form 5500 for an ERISA plan is due on the last day of the seventh month after the end of the ERISA plan year, including short plan years. For a calendar year plan, the Form 5500 is generally due on July 31. An extension of up to 2.5 months is available for employers who request an extension using Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns). Form 5558 must be filed with the IRS, not with the DOL. If Form 5558 is filed on or before the normal due date of the Form 5500, the extension request will be automatically granted; no approval is necessary. For a calendar-year plan, the 2.5-month extension will result in a Form 5500 due date of October 15.

More information about Form 5558 can be found here.

If you have questions, please contact your North Risk Partners Risk Advisor. Don’t have an advisor? No problem. We’ll help you find one.

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Posted in Compliance