The end of 2025 brings two important deadlines and dates for employers that sponsor 401(k) plans, 403(b) plans, governmental 457(b) plans, and group health plans.
401(k), 403(b), 457(b) Plans: Automatic Roth Designation for Catch-Up Eligible Participants Earning Over $150,000 (as Adjusted for Inflation)
Final regulations require retirement plan sponsors to designate age 50 catch-up contributions as Roth contributions for participants with annual FICA wages greater than $150,000 (as adjusted for inflation) in the prior year. Retirement plans must implement this requirement by January 1, 2026. The final regulations generally become effective on January 1, 2027. For more information on this new retirement plan requirement, please see a prior client alert issued by Venable’s Employee Benefits and Executive Compensation Group here.
Group Health Plans: Gag Clause Attestation
A 2020 law prohibits group health plans from entering into contracts that contain “gag clauses” –provisions that prevent group health plans from (i) disclosing healthcare provider costs and quality of care information (ii) accessing de-identified claims data of plan participants, and (iii) sharing such pricing, quality of care, and claims information with business associates of the plan within the meaning of applicable privacy regulations. For example, pharmacy benefit managers cannot insert provisions in their service agreements that prohibit plans from disclosing the cost of out-of-network drug prices to plan participants.) These “gag clauses” are now prohibited in contracts between major medical plans and third-party administrators (TPAs), providers, and networks. Plans must attest that their contracts do not contain gag clauses. Plans must submit the attestation to the Center for Medicare and Medicaid Services (CMS), through its Health Insurance Oversight System. CMS created an online resource page with instructions for submitting the attestation here.
The deadline for submitting the gag clause attestation is December 31, 2025.
Each group health plan is responsible for submitting the attestation. However, TPAs may submit the attestation on behalf of the plan if a written agreement permits them to do so.
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If you have questions or concerns regarding this client alert, please contact the authors, any member of Venable's Employee Benefits and Executive Compensation Group, or your regular Venable lawyer.