Gag Clause Prohibition Compliance Attestation

Compliance, Employee Benefits

Since the passage of the Consolidated Appropriations Act of 2021 (CAA), group health plans and health insurance issuers have been prohibited from entering into agreements with healthcare providers, networks/associations of healthcare providers, third party administers (TPA), or other service providers that contain a gag clauses on price and quality information. A gag clause is a provision of a contract that prevents the sharing of specified information.

To ensure compliance with the gag clause prohibition, the CAA requires group health plans and health insurance issuers to attest annually that they have not entered in an agreement that contains a prohibited gag clause. While the prohibition against gag clauses has been effective since December 27, 2020, the required attestation had been delayed pending further guidance.

On February 23, 2023, the Departments of Labor, Health and Human Services, and the Treasury issued a series of FAQs providing guidance on the gag clause prohibition attestation and a due date of December 31, 2023 for the first attestation. Employers, as group health plan sponsors, are responsible for ensuring their plan is complying with the prohibition on gag clauses and making the required attestation.

The Attestation

Each year, group health plan sponsors must ensure that all agreements they have with service providers do not contain gag clauses that prevent the direct or indirect disclosure of information relating to the price and quality of items and services. Once verifying their service agreements do not contain prohibited gag clauses, plan sponsors must attest to that fact on an annual basis.

The first employer attestation is due by December 31, 2023. This attestation will cover the time between December 27, 2020 and whenever the first attestation is submitted. For example, an attestation submitted on December 1, 2023 will cover the period between December 27, 2020 and December 1, 2023.

Attestations for following years will follow a similar pattern with the current year’s attestation covering the time period since the previous year’s attestation. For example, if a group health plan submits its first attestation on December 1, 2023, and submits its 2024 attestation on November 1, 2024, the 2024 attestation will cover the period between December 1, 2023 and November 1, 2024.

What Plan Sponsors Should Do

Employers who sponsor a fully insured group health plan should consider working with their insurance carrier to submit the required attestation. While insurance carriers are required to submit their own attestation, they are also able to submit attestation’s on behalf of plan sponsors of fully insured plans.

Employers who self-fund their group health plan would be well served to work with their TPA or another third party to complete the required attestation. Self-funded plan sponsors who want their TPA to submit the attestation on their behalf should seek an agreement in writing that the TPA will handle the attestation on the plan sponsor’s behalf. It is important to note that plan sponsors are liable if their TPA fails to submit the required attestation on their behalf.

If no entity is submitting the attestation on behalf of an employer who sponsors a health plan, they must do so themselves. Attestations can be submitted through this federal website and instructions for completing the attestation can be found here. This user manual helps walk attesters through the process of submitting their attestation.

Key Takeaways:

Plan sponsors would be well served to work with either their insurance carrier or TPA to ensure the required gag clause prohibition attestation is being submitted. If employers who sponsor a health plan do not have another party submitting the attestation on their behalf, they would be encouraged to work with their legal counsel to make sure they remain compliant with this federal regulation.

The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.

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