Archive for month: February, 2025

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The Departments of Labor, Health and Human Services, and the Treasury, along with the Office of Personnel Management (collectively, the Departments), recently released a set of FAQs that provide additional insight for employers on compliance with the Consolidated Appropriation Act of 2021’s (CAA, 21) gag clause prohibition and attestation requirements. The CAA, 21 (1) prohibits gag clauses within health plan provider agreements that restrict access to price and quality information, and (2) requires employers to file an annual attestation with CMS confirming that such gag clauses are not in place. Employers that sponsor fully insured plans may rely on their carrier to satisfy this reporting requirement on their behalf. Those with self-funded or level-funded plans are permitted to contract with their TPA to complete the attestation on their behalf; however, the legal obligation to file the attestation ultimately remains with the plan sponsor.   

The FAQs provide welcome guidance to employers as plan sponsors, suggesting that more information about their plan should be available upon request. Specifically, the new FAQs clarify that: 

1. Downstream agreements qualify as a prohibited gag clause under the CAA, 21. A “downstream agreement” exists where a plan sponsor has contracted with a TPA or other service provider and that TPA/service provide has a contract in place with a third party (e.g., an owner of a network) that prohibits the TPA/service provider from sharing price and quality information with the plan sponsor and/or plan participants, beneficiaries, referring providers, etc. To prevent these indirect restrictions on the plan, the Departments expect plan sponsors to include provisions in their contracts with TPAs/service providers that prohibit them from entering into downstream agreements that permit such restrictions. 
2. Prohibited gag clauses under the CAA, 21 include provisions in agreements between plans and service providers that prevent the plan sponsor from sharing de-identified claims data with a business associate or limit their ability to do so. The circumstances that qualify as impermissible restrictions on de-identified claims and encounter information include any limitation on the scope, scale, or frequency of electronic access to such data. 
3. When a plan sponsor is unable to remove a prohibited gag clause from a contract they have with a TPA/service provider, including one reflected in a downstream agreement that vendor has with another party, the plan sponsor should nonetheless ensure that their annual gag clause compliance attestation is submitted to CMS. In this instance, the plan sponsor is supposed to provide in their attestation at least: 
4. The non-compliant provision(s) their TPA/service provider won’t remove from the agreement; 
5. The name of the TPA/service provider; 
6. Information about the TPA/service provider’s conduct that confirms the service provider interprets the agreement to contain a prohibited gag clause; 
7. Information about the plan sponsor’s requests that the prohibited gag clause(s) be removed from such agreement; and 
8. Any other steps the plan or issuer has taken to come into compliance with the provision. 

The Departments will take this information into account when establishing the plan sponsor’s compliance with the CAA, 21’s gag clause prohibition requirements, and may ultimately investigate the TPA/service provider, particularly if this vendor restricts the plan sponsor’s access to de-identified claims and encounter data. 

These FAQs the Departments have provided are particularly notable because they affirm that plan sponsors should have access to important claims data that will help them fulfill their fiduciary duties towards the plan. Furthermore, they provide valuable clarity regarding how plan sponsors should attest when they are unable to fully comply with the gag clause prohibition requirements, despite their best efforts. We encourage plan sponsors, particularly those with self-insured or level-funded plans, to carefully consider the TPA/service provider contracts they have in place, add any provisions necessary to prohibit gag clauses in downstream agreements, and thoroughly document any and all efforts made to remove any prohibited gag clauses before the next gag clause compliance attestation is due at the end of 2025. MZQ is happy to provide assistance through MZQuick Attest, our Gag Clause Compliance Attestation service; more information about this is available here. 

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