CMS Proposes Removing HRA Medicare Part D Creditable Coverage Reporting

The Centers for Medicare & Medicaid Services (CMS) has proposed a rule change to eliminate the requirement for Health Reimbursement Arrangements (HRAs) to report creditable coverage status for Medicare Part D prescription drug coverage to both beneficiaries and CMS.

This proposal follows feedback highlighting the administrative burden and practical difficulties associated with these notices. Currently, under the Social Security Act and existing regulations, group health plans (GHPs) including HRAs must notify Medicare Part D-eligible individuals about whether their coverage is creditable, meaning it meets or exceeds Medicare Part D's actuarial value standards.

HRAs, funded entirely by employers to reimburse medical expenses, differ fundamentally from traditional prescription drug plans under Medicare Part D. This difference makes actuarial comparisons challenging and potentially misleading, prompting CMS to recommend removing HRA creditable coverage notices. The proposed rule aims to reduce confusion among Medicare Part D beneficiaries, who sometimes receive conflicting information from HRAs and prescription drug plans about their coverage status.

The rule change also intends to ease administrative burdens on employers and plan administrators who might lack the capacity to accurately assess and report creditable coverage status for HRAs. CMS aligns this proposed regulatory adjustment with broader federal deregulation efforts aimed at simplifying compliance and reducing redundant requirements.

Overall, this adjustment clarifies that HRAs, including Individual Coverage HRAs (ICHRAs), are no longer subject to Medicare Part D creditable coverage disclosure rules. This move could significantly streamline employer responsibilities and improve clarity for Medicare beneficiaries who rely on these notices to make enrollment decisions and avoid late enrollment penalties.

Insurance professionals should monitor the progression of this rule as it influences employer-sponsored health plan administration and impacts compliance practices concerning Medicare Part D coordination. The proposal reflects ongoing shifts in regulatory policy to balance administrative feasibility with beneficiary protections in prescription drug coverage reporting.