As Q4 begins, benefits managers face a trio of compliance developments with implications for plan design, documentation, and year-end filings. Two are federal in scope, while one local ordinance continues to affect employers nationwide.

Gag Clause Prohibition Attestations Due by December 31

Under the Consolidated Appropriations Act (CAA), employer-sponsored group health plans must submit an annual attestation confirming that no “gag clauses” exist in their provider contracts. These clauses—often embedded in third-party administrator agreements—can restrict access to cost and quality data, undermining transparency efforts.

The attestation is due by December 31, 2025, and applies to fully insured and self-funded plans. Plans must confirm that they do not include contractual language that prevents disclosure of provider-specific cost or quality information. The attestation is submitted through the CMS portal, and noncompliance may result in penalties. Employers are encouraged to review their agreements and coordinate with carriers or TPAs to ensure compliance.

Court Ruling Reshapes Contraceptive Coverage Exemptions

A recent federal court decision has vacated a key exemption that previously allowed employers to opt out of contraceptive coverage based on religious or moral objections. This ruling reopens questions around plan design, ERISA documentation, and employee communications.

While the decision may be subject to appeal, employers who previously relied on the exemption should assess their current coverage and prepare for potential updates to Summary Plan Descriptions (SPDs). The ruling may affect grandfathered plans, religious institutions, and closely held corporations, particularly those operating across multiple states. Legal counsel may be needed to evaluate the impact and ensure alignment with federal and state requirements.

SF Health Care Ordinance: A Local Rule with National Reach

San Francisco’s updated Health Care Security Ordinance (HCSO), which outlines 2025 expenditure rates and reporting requirements, initially flew under our radar due to its local scope. However, its impact reaches employers nationwide.

Any employer with workers averaging 8+ hours per week in San Francisco—including remote or hybrid employees—may be subject to the ordinance. The required health care expenditure rate is now $3.85/hour for large employers and $2.56/hour for medium employers, with annual reporting due by May 2, 2025. In 2026, reporting for 2025 will be due May 2, 2026.

Importantly, employer size is calculated based on global employee count, meaning a company with a single SF-based employee may still be classified as a “Large Employer” if it has 100+ employees worldwide. Employers should audit their workforce footprint and determine whether any staff trigger HCSO obligations. The ordinance also includes exemptions for high earners and specific plan types, which may affect compliance strategies.

Final Takeaway

These updates reflect the evolving landscape of benefits compliance. From federal transparency mandates to local ordinances with national implications, staying informed is essential. Employers should review plan language, assess workforce geography, and prepare for key deadlines as the year draws to a close.

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Copyright © 2025 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.