HPfid Letter to the Departments in Response to SIIA’s Request to Postpone the Gag Clause Deadline


On November 29, 2023, the Self-Insurance Institute of America sent a formal request (attached below) to the Department of Labor to “delay the December 31st submission date for at least six months”. The reason for this request, the SIIA argues, is that the guidance from The Departments is unclear and interpreted differently by BUCA and Plan Sponsors. Specifically, BUCA and TPA’s are arguing that the Gag Clause Prohibition requirement does not extend to agreements between them and third-party providers to which Plan Sponsors are not a party. Plan Sponsors believe that even if not a signatory, these agreements are included in the Gag Clause Prohibition requirement. If these Gag Clauses are not removed:


This forces group health plans and their sponsors into one of two decisions:


  • Refrain from submitting an “attestation” because they know they are not compliant with the law. However, failure to submit an “attestation” appears to carry with it a $100 per day/per member penalty.



  • Submit an “attestation” despite knowing that they are not in compliance. However, submitting incorrect information to the Federal government exposes the plan sponsor to fiduciary liability.

When enacting the “attestation” requirement, Congress did not intend for group health plans and their plan sponsors to be placed in such a precarious position. The Biden Administration should similarly be concerned about this catch-twenty-two.


HPfid Commentary


HPfid is against another delay in the attestation deadline, and have written a letter to the Departments offering a simple solution that keeps the deadline and the current timeline for benefits for Plan Sponsors. See HPfid’s letter attached.


The CAA and the related amendments to ERISA are for the benefit of Plan Sponsors and a delay will only benefit the status quo providers who created the Gag Clauses in the first place. A delay will only vpostpone the benefits of transparency for Plan Sponsors.


It’s about the process, not the results. A critical element of the CAA is the mandated fiduciary process. Based upon years of ERISA case law decided by the Courts, it’s the effort and process that matters, not the results. So, inherently in ERISA case law, this request is form over substance. In fact, Tony Sorrentino, HPfid’s Chief Compliance Officer and a professor of ERISA law wrote to the departments:


“We believe, based upon years of ERISA case law decided by the Courts, that attempting to legislate the adequacy of a fiduciary process based upon results, rather than by the efforts of the plan sponsor, is simply a delay tactic. Such a delay will only mitigate the benefits to the ultimate beneficiary of the legislative process….the plan participant. An argument in favor of delaying (again) the attestation and gag clause removal requirement is a classic “form over substance” paradigm, that thwarts the efforts of plan sponsors by promoting the status quo and does not bring the sought after transparency and the resulting reduced benefit costs to Employers and Employees.”


HPfid included in our letter a simple suggestion to keep the benefits on track for Plan Sponsors:


“On behalf of Plan Sponsors, we propose adding a second option that represents their “attempt” at a Good Faith effort to remove all Gag Clauses. (NOTE: Effort is the correct measurement of fiduciary process, NOT results).”


As a final comment on SIIA’s request to postpone the attestation deadline. Why wait to send this request until the last month before the deadline? There has been ample time for Plan Sponsors and the industry in the previous three years which included previous postponements of the deadline. Transparency should not wait any longer.


Read HPfid’s full letter to the departments attached below, and for reference we have also included SIIA’s letter.


HPfid Recommendations to Clients


HPfid’s recommendations to our clients remain unchanged. As previously shared to our clients in our HPfid Playbooks, we recommend that it’s the documented effort that matters, not the end result. This is foundational to a good Fiduciary Process and has been repeatedly upheld in case law.

Letter from HPfid to the Departments of Labor, Treasury and Health & Human Services

HPfid Letter to the Departments December 15, 2023

Letter to same from the SIIA, Self-Insurance Institute of America

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