Healthcare transparency has become a top priority for employers sponsoring group health plans. A critical part of this transparency push is the Gag Clause Prohibition under the Consolidated Appropriations Act of 2021 (“CAA”). Employers are now required to ensure that their health plan agreements do not contain gag clauses, and they must submit an annual Gag Clause Prohibition Compliance Attestation to the federal government.
In this blog, we’ll explore what a gag clause is, why the prohibition matters, and how employers can meet their attestation responsibilities.
What is a Gag Clause?
A gag clause is a contractual restriction that prevents health plans from sharing important information about the cost and quality of healthcare services. These clauses can limit transparency, making it harder for employers and employees to access data needed to make informed healthcare decisions.
Examples of information gag clauses might restrict include:
- Healthcare provider pricing
- Quality of care metrics
- Claims and utilization data
The CAA prohibits these types of clauses, ensuring that employers and employees can access vital information about their healthcare options.
Employer Responsibility for Gag Clause Attestation
Employers who sponsor group health plans are responsible for ensuring that no gag clauses exist in their contracts with healthcare providers, insurers, or third-party administrators (“TPAs”). This applies to both self-funded and fully insured plans. Employers must also submit an annual Gag Clause Prohibition Compliance Attestation to certify that they are complying with the law.
Here are the key steps to staying compliant:
- Review Contracts: Ensure that all contracts related to your group health plan (including those with insurers, TPAs, and providers) are free from gag clauses.
- Coordinate with Insurers or TPAs: Fully insured plans typically rely on the insurer to submit the attestation, but self-funded plans must work closely with their TPA to ensure compliance and submit the attestation directly.
- Submit Attestation: Employers must submit the attestation to the Centers for Medicare & Medicaid Services (“CMS”) annually. This is done through the CMS portal, where employers affirm that their health plan is compliant with the gag clause prohibition.
Why Gag Clause Attestation Matters
Complying with the gag clause prohibition is not just a legal requirement – it plays a crucial role in promoting transparency and managing healthcare costs. When employers have access to cost and quality data, they can make better decisions about the healthcare services offered to their employees, improving both outcomes and costs.
Failure to comply with the gag clause prohibition can result in penalties, audits, and reputational damage. By submitting the required attestation each year, employers demonstrate their commitment to transparency and their legal obligations.
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