Emily R. Langdon402.978.5386
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Plan sponsors should work with a benefits counsel to navigate the gag clause requirements and related actions that are required.
The extent of a plan sponsor’s responsibilities related to the GCPCA depend on whether their agreements with the plan’s health insurance provider or third-party administrator (“TPA”) require such parties to complete the attestation for the plan, and whether any medical benefits (like pharmacy or behavioral health) are administered by a vendor other than the plan’s health insurance provider or TPA.
A gag clause is a contractual provision that restricts the plan from sharing price or quality of care information or data with other parties.
The Consolidated Appropriations Act of 2021 (the “CAA”) prohibits group health plans from entering into agreements with entities offering access to a network of providers if those agreements (or any underlying agreements) contain gag clauses. The CAA also requires group health plan sponsors to submit compliance attestations annually.
The gag clause prohibition applies to agreements entered into directly or indirectly between a group health plan and the plan’s service providers. Service providers include health insurance carriers, TPAs, pharmacy benefit managers (“PBMs”), behavioral health vendors, direct care arrangements, and other similar entities.
Plan sponsors must attest to their compliance each year by December 31.
The first GCPCA submission is due by December 31, 2023. This attestation will satisfy the requirement for calendar years 2021, 2022, and 2023. Plan sponsors required to attest for any part of this period must submit a GCPCA by the first due date.
Following the 2023 GCPCA, the plan’s GCPCA is due by December 31st of each calendar year and will cover the period from the date of the prior submission through the date of the current submission. For example, if the plan’s first GCPCA was submitted on November 8, 2023, the plan’s second GCPCA will cover the period from November 9, 2023, through the date of the plan’s second GCPCA (due by December 31, 2024).
All employer-sponsored group health plans must submit a GCPCA (with a few limited exceptions). The requirement applies to fully insured and self-insured/level-funded health care plans, ERISA plans, church plans, grandfathered and grandmothered plans, and non-federal governmental plans. The requirements also extend to standalone telehealth programs and direct care arrangements.
Under a limited exception, group health plans providing “excepted benefits” coverage (e.g., standalone dental and vision plans and health FSAs), account-based plans like HRAs, most EAPs, and retiree-only plans are not subject to the attestation requirement.
Although not entirely clear, it appears that a plan that fails to comply with the gag clause attestation requirement could be subject to the standard IRC §4980D penalty, which is $100 per day per affected individual.
Plans must submit their attestations using the GCPCA web form, which can be accessed at:
Benefits counsel can assist with the detailed reporting requirements and standards for the Excel spreadsheet.
The Departments of Labor, Health and Human Services, and the Treasury (collectively, “the Departments”) have offered guidance with respect to the attestation requirements.
With respect to a fully insured arrangement, both the group health plan and the health insurer are required to attest. However, when an insurer submits a GCPCA on behalf of the plan, the Departments will consider both the plan and the insurer to have satisfied the attestation requirement. Most health insurance providers have indicated that they will submit attestations on behalf of fully insured plans.
If a fully insured plan sponsor has contractual assurance from its group health insurance carrier that the carrier will submit its annual attestation, and when there are no other health benefits subject to the requirement (e.g., a carve-out pharmacy benefit), such plan sponsor does not need to take any action, other than to have legal counsel review the related assurances and retain related documentation.
With respect to a self-insured or level-funded arrangement, only the group health plan is required to submit the GCPCA attestation. Health plan TPAs are not subject to the attestation requirement. An employer may satisfy the requirement by entering into a written agreement under which the service provider completes the GCPCA on the plan’s behalf. Still, the employer retains ultimate responsibility for compliance. Again, all agreements with third-party service providers should be reviewed by benefits counsel to ensure that the requirements are met.
Plan sponsors can enter into a written agreement with a PBM, behavioral health vendor, or other similar service provider, stating that the third-party vendor is responsible for attesting on the plan’s behalf. While this is permissible under applicable law, it is unlikely that these types of third-party vendors will agree to provide attestations on the plan’s behalf.
Ultimately, all group health plan sponsors are responsible for submitting a GCPCA by December 31, 2023, and annually thereafter. While plan sponsors may satisfy the attestation requirement by entering into a written agreement under which the service provider completes the GCPCA on the plan’s behalf, the employer retains ultimate responsibility for compliance.
Given the potential noncompliance penalties, all plan sponsors should coordinate with benefits counsel to navigate the gag clause requirements, related attestations, and contract provisions. Third-party contracts may need to be re-evaluated and re-negotiated. Many gag clauses are “indirect” or “hidden”, so it is extremely important to review applicable agreements in detail.
For additional information, please contact firstname.lastname@example.org or 402.978.5386.
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.