Gag Clause Compliance Attestation Requirements for Plan Sponsors

Kirsten Stewart & Russ Johnson

Since 2021, certain group health plans and health insurance issuers have been prohibited from entering into agreements with “gag clauses” (“Gag Clause Prohibition”). By December 31, 2023, these plans and issuers will be required to submit their first annual attestation of compliance with the Gag Clause Prohibition. On February 23, 2023, the Departments of Labor, Health and Human Services, and the Treasury (“Departments”) published an FAQ that includes guidance on the Gag Clause Prohibition with instructions for submitting the required attestation.

Which plans must comply with the Gag Clause Prohibition attestation?

Fully-insured and self-insured group health plans generally must submit the Gag Clause Prohibition attestation. This includes:

  • Health plans covered by Title I of ERISA;
  • State and local governmental health plans; and
  • Church health plans that are subject to the Internal Revenue Code.

Group health plan sponsors should confirm whether their plan service providers or third-party administrators will submit the attestation on the plan’s behalf.

Note: Plan sponsors with self-insured plans can enter into a written agreement under which a service provider will attest on the plan’s behalf, but if the service provider fails to provide timely attestation, the plan sponsor remains liable for the failure. Fully-insured plans must also submit the Gag Clause Prohibition attestation but will be deemed to have satisfied this requirement if the insurer submits the attestation on behalf of the plan.

Notable exclusions from the Gag Clause Prohibition attestation requirement include plans offering only excepted benefits, plans that consist solely of health reimbursement arrangements (“HRAs”), and certain other account-based group health plans.

Note:  Although these plans are excluded from the Gag Clause Prohibition attestation requirement, it appears that they are still subject to the general Gag Clause Prohibition.  The FAQ indicates that the Departments are exercising enforcement discretion with respect to HRAs and other account-based group health plans until the Departments can exempt these plans from the Gag Clause Prohibition through rulemaking.

What is the Gag Clause Prohibition?

Effective August 20, 2021, certain group health plans and insurers are prohibited from entering into an agreement with a health care provider, network or association of providers, third-party administrators, or other service provider offering access to a network of providers that would directly or indirectly restrict the plan or issuer from:

  1. Providing provider-specific cost or quality of care information or data to referring providers, the plan sponsor, participants, or eligible employees and their dependents;
  2. Electronically accessing de-identified claims and encounter information or data for each participant in the plan upon request, including, on a per claim basis, certain financial and provider information, service codes or any other data element included in claim, or encounter transactions; or
  3. Sharing information or data described in Nos. 1 or 2 above, or directing such information to be shared, with a business associate (as defined in 45 CFR § 160.103).

Note: Group health plans accessing and sharing data must still comply with the requirements of HIPAA, GINA, and the ADA, as applicable.

To the extent not already completed, group health plan sponsors should consider reviewing the service agreements for their plans to identify any problematic gag clauses.

When is the Gag Clause Prohibition attestation due?

The first attestation is due no later than December 31, 2023, and will relate to the period beginning December 27, 2020, (or the effective date of the applicable group health plan or health insurance coverage, if later) through the date of the attestation. Subsequent attestations are due by December 31 of each subsequent year and will cover the period beginning from the previous attestation. Plans and issuers that fail to timely submit the attestation may be subject to enforcement action and may be subject to the general penalty for violations of the health care reform provisions of the Code: $100 per day for each day an attestation is not filed.

How is the Gag Clause Prohibition attestation submitted?

The attestation is submitted via the Gag Clause Prohibition Compliance Attestation website.  The FAQ directs users to select the “Don’t have a code or forgot yours?” button and to provide an e-mail address. The system will generate an authentication code and send it to the e-mail address provided. The user can then return to the Gag Clause Prohibition Compliance Attestation website, enter the e-mail address and code where indicated, and select “Login to the system” to proceed with submitting the attestation. Additional information, instructions, and other resources can be found on the CMS website.

If you have any questions or need any additional information, please reach out to an attorney in the Employee Benefits Group for more information.