Annual Federal Attestation

Gag Clause Prohibition and the Annual Attestation

Group health plans may not agree to contract terms that restrict access to cost and quality information. Every year, plans must attest that they have not. The deadline is December 31.

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The Rule

What the Gag Clause Rule Requires

The Consolidated Appropriations Act, 2021 added the prohibition and the attestation requirement.

The Prohibition

A group health plan or issuer may not enter into an agreement with a provider, network, administrator or similar party that restricts the plan from sharing certain cost and quality information. A clause that limits access to certain pricing, quality or claims information is the type of term the rule targets. Employers should ask counsel to look at wording in administrator, network and pharmacy contracts.

The Attestation

Each year the plan must attest to the federal government that it has complied with the prohibition. The deadline is December 31. Put the date on the compliance calendar well ahead of the deadline, and name who will complete it. Keep the confirmation with your records, in case anyone asks later whether the filing was made.

Both Funding Types

Fully insured and self-funded plans owe the attestation. There is no participant-count exemption. Both insured and self-funded plans should confirm the attestation is handled. Ask the carrier or administrator in writing who files, and follow up with counsel if the answer is unclear.

Issuers Can File For Insured Plans

If the issuer submits the attestation on a fully insured plan’s behalf, both the plan and the issuer are treated as having satisfied the requirement. Confirm this each year rather than assuming it. Even when the issuer files, employers should keep a copy of the confirmation and note the date. Ask the carrier each year, because practices can change and a missed filing is easy to overlook.

It Is About Contracts

The compliance question is what your administrator, network and pharmacy benefit contracts say, not how you run the plan day to day. Employers should read the actual language of their contracts, or ask counsel to do so, rather than relying on general assurances. Pay attention to confidentiality terms that could limit data sharing.

Someone Must Own It

Even when a vendor submits, a person at the company should own the task and keep the confirmation. Even when a carrier or administrator files, one person at the company should be responsible for confirming it was done. Add the task to the compliance calendar and keep a copy of the confirmation.

In Practice

Getting Ready for December 31

The attestation is short. The work is in the contracts behind it.

Gather The Contracts

List every contract that touches your plan: the carrier or TPA, the PBM, any network or direct contracting arrangement. Include contracts with administrators, networks, pharmacy benefit managers and any direct arrangements. Having them in one folder makes it easier to review the terms at renewal and when answering questions from counsel.

Ask For Written Assurance

Request a statement from each administrator that no gag clause exists in the agreements covering your plan. A short written statement from each vendor can be a helpful record, though it does not replace counsel’s review. Keep the responses in your compliance file and ask again when contracts are renewed or changed.

Confirm Who Files

Ask the carrier or TPA whether it will submit on your behalf and obtain confirmation of submission. Ask for the answer in writing, along with a copy of the confirmation after the filing is made. If the vendor will not file, ask counsel how to make the submission yourself.

Calendar It

Put the December 31 date alongside the June 1 RxDC report and the July 31 PCORI filing. Place the year-end attestation next to the other annual filings, so the compliance calendar shows them together. Review the calendar at the start of each plan year and assign an owner to each item.

Keep The Record

Save the attestation confirmation and the supporting assurances. Save the confirmation, the vendor responses and the date they were received, in a folder that is easy to find. Records like these help when there is a change in staff or a question from an adviser.

Revisit At Renewal

New contracts at renewal are the moment the prohibition is most likely to be missed. Contracts change at renewal, and new terms can slip in without much attention. Ask counsel or your adviser to review the language before signing, and request written assurance that the prohibition is not violated.

The Bigger Picture

How It Fits With Other Transparency Rules

The gag clause rule is one of several transparency obligations that arrived together.

RxDC Reporting

Prescription drug and spending data is reported by June 1. See our RxDC guide.

No Surprises Act

Balance billing protections and cost transparency are covered in our No Surprises Act guide.

Transparency In Coverage

Plans and issuers also publish pricing data under separate rules. These rules are separate from the attestation, and each has its own purpose. Employers should ask their carrier or administrator how the plan complies, and speak with counsel if something is unclear.

Why Employers Care

Plan sponsors are fiduciaries. Knowing their data rights is part of managing cost. Sponsors who manage a plan have responsibilities that include knowing what they pay for and what data they can request. Counsel can explain the specific duties that apply to your plan.

Self-Funded Leverage

A self-funded sponsor can ask for claims data and cost detail. A contract that blocks it is the problem this rule addresses. When a sponsor needs data for renewal, audits or plan design, the contract should allow it. Review what information you can get, how often and in what form, and raise gaps at the next negotiation.

Vendor Management

Review vendor contracts annually, not only when something goes wrong. Set a review date every year, and look at data access, reporting and attestation terms. Make a short checklist so that the review is consistent, and note any concerns for counsel.

Common Questions

Questions We Get About the Gag Clause Attestation

When is the attestation due?

December 31 each year.

Does it apply to fully insured plans?

Yes, but if the issuer submits for the plan, both are treated as compliant. Confirm that your carrier does this.

Is there a small employer exemption?

No participant-count exemption applies.

What does the plan attest to?

That its contracts do not contain terms restricting access to cost and quality information.

Who files for a self-funded plan?

The sponsor is responsible and may delegate to a TPA. Get written confirmation.

What contracts should we look at?

The carrier or TPA agreement, the PBM agreement, and any network or direct contracts.

What happens if we miss it?

Ask benefits counsel about the current enforcement posture. Do not assume there is no consequence.

Is this related to RxDC?

They are separate requirements from the same law, so many employers manage them together on one calendar.

Is this legal advice?

No. This page is general information, not legal advice. Rules change and facts differ, so confirm your situation with your attorney or tax advisor.

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What to send

The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier

Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.

Sources

Laws and Rules Referenced

29 U.S.C. § 1185m — Prohibits gag clauses in contracts with providers, networks and service providers that would restrict sharing provider-specific cost and quality data or access to de-identified claims data.

This page is general information, not legal or tax advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.