With more than 900 lawyers across 18 offices, Seyfarth Shaw LLP provides advisory, litigation, and transactional legal services to clients worldwide. Our high-caliber legal representation and advanced delivery capabilities allow us to take on our clients’ unique challenges and opportunities-no matter the scale or complexity. Whether navigating complex litigation, negotiating transformational deals, or advising on cross-border projects, our attorneys achieve exceptional legal outcomes. Our drive for excellence leads us to seek out better ways to work with our clients and each other. We have been first-to-market on many legal service delivery innovations-and we continue to break new ground with our clients every day. This long history of excellence and innovation has created a culture with a sense of purpose and belonging for all. In turn, our culture drives our commitment to the growth of our clients, the diversity of our people, and the resilience of our workforce.
The Consolidated Appropriations Act, 2021 ("CAA") contains a requirement that that group health plans may not have agreements with service providers that would restrict certain information.
United States Employment and HR
Seyfarth Synopsis: The Consolidated Appropriations Act, 2021 ("CAA") contains a requirement that that group health plans may not have agreements with service providers that would restrict certain information that the plan may make available to another party (the "Gag Clause Prohibition") and must attest on an annual basis that they are complying (the "Compliance Attestation"). After much delay, group health plans may now begin submitting their first Gag Clause Prohibition Compliance Attestation, which is due by December 31, 2023.
On February 23, 2023, the Departments of Labor, Health and Human Services, and the Treasury (the "Departments") released new FAQs on implementing the Gag Clause Prohibition transparency requirements under the CAA. Group health plans are prohibited from entering into agreements with providers, third-party administrators ("TPAs"), pharmacy benefit managers ("PBMs"), or other service providers that that would restrict certain data and information that a plan can make available to another party. Among other things, a plan cannot be restricted from providing provider-specific cost or quality of care information to referring providers, the plan sponsor, participants, beneficiaries, enrollees or eligible individuals.
To ensure compliance with the Gag Clause Prohibition, plans must annually submit an attestation of compliance with the law to the Departments. The Departments have now launched a website for submitting attestations and issued instructions, a system user manual, and a Reporting Entity Excel Template for plans and issuers to submit the required Compliance Attestation.
The first Gag Clause Prohibition Compliance Attestation is due by December 31, 2023, covering the more than 3-year period beginning December 27, 2020. Subsequent attestations are due by December 31 of each year thereafter.
A self-insured or partially self-insured group health plan may satisfy the Compliance Attestation requirement by entering into a written agreement under which the group health plan's service provider (such as a TPA or PBM) will attest on its behalf. However, the legal requirement to provide a timely Compliance Attestation remains with the group health plan. Thus, liability for failure to timely submit the Compliance Attestation will be enforced against the group health plan.
A health insurance issuer that both offers group health insurance and acts as a TPA for self-insured group health plans may submit a single Compliance Attestation on behalf of itself, its fully-insured group health plan policyholders, and its self-insured group health plan clients.
When the health insurance issuer of a fully-insured group health plan submits a Compliance Attestation on behalf of such plan, the Departments will consider the fully-insured group health plan and health insurance issuer to have satisfied the attestation submission requirement.
A group health plan or health insurance issuer may authorize any appropriate individual within the organization, such as the plan administrator, to attest on behalf of the plan or issuer. A service provider that has been provided the authority to make the Compliance Attestation on behalf of such plan or issuer, such as a TPA attesting on behalf of its client, may authorize any appropriate personnel within the organization to make the attestation.
As the Gag Clause Prohibition does not apply to excepted benefits, the FAQs provide that plans offering only excepted benefits are not required to attest, and a plan otherwise required to attest is not required to attest with respect to any excepted benefits offered. Excepted benefits include, among other programs, health FSAs satisfying certain conditions, certain limited-scope dental and vision coverage, and certain supplemental coverage.
The Departments will not enforce the Compliance Attestation requirement against plans that consist solely of health reimbursement arrangements (HRAs) or other account-based plans, because the plan design of such plans precludes the need to enter into agreements with providers; thus, making it unnecessary to prohibit gag clauses. In addition, HRAs and other account-based plans are typically integrated with other coverage that either is subject to the Compliance Attestation requirements or is otherwise exempt from these requirements (such as excepted benefit HRAs). Therefore, the Departments are exercising enforcement discretion with respect to HRAs (including individual coverage HRAs) and other account-based group health plans until the Departments can exempt such plans through rulemaking.
We suggest that you confirm that your existing agreements with TPAs, PBMs and other service providers do not contain language that could be deemed to violate the Gag Clause Prohibition. In addition, if your TPA, PBM or other service provider will attest on behalf your self-funded group health plan(s), we suggest that you confirm that this obligation is set forth in a written agreement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
