Hunton Employment & Labor Perspectives

The Consolidated Appropriations Act of 2021 (the CAA) requires group health plans and health insurance carriers to attest on an annual basis that they are in compliance with the CAA’s gag clause prohibition. While the prohibition of gag clauses was effective December 27, 2020, the first annual attestation is due December 31, 2023. Group health plan sponsors should begin taking steps now to prepare.

The Patient Protection and Affordable Care Act requires that employers report the aggregate cost of “applicable employer-sponsored coverage” on Form W-2.  (See our August 6, 2012, posting entitled “Reminder – 2012 Form W-2 Reporting For Group Health Plans” for an explanation of this requirement.)  Applicable employer-sponsored coverage generally includes coverage under any group health plan made available to employees by an employer that is excludable from gross income.  In providing an enumerated list of the types of coverage that are exempt from the reporting requirement, the Internal Revenue Service explained in Notice 2012-9 (Q&A-12) that the term “applicable employer-sponsored coverage” generally does not include any coverage for HIPAA-excepted benefits, other than coverage for on-site medical clinics.