Do I need to add insulation between eGaN FET and the heatsink?
Yes, you should not attach the heat sink directly onto the top of the device. On many devices, the top is substrate and is at the same potential of the source of the device. On older generation devices it is recommended to connect the substrate pin to source. Therefore, EPC recommends the use of an insulating thermal interface material such a Liquid Gap Filler, soft thermal pad or a Putty material when attaching a heat sink. For more details, see How To Application Note 012: How to Get More Power Out of a High-Density eGaN-Based Converter with a Heatsink