CMS Proposes Removing HRA Reporting Requirements for Medicare Part D Coverage

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule on November 28 aiming to eliminate the requirement for Health Reimbursement Arrangements (HRAs) to report creditable coverage status to Medicare Part D-eligible individuals and CMS. This proposal responds to feedback from various organizations highlighting the administrative burdens of current notice obligations. Under the existing Social Security Act and 2005 regulations, entities providing prescription drug coverage, including group health plans (GHPs), must notify Medicare Part D candidates and CMS about whether their coverage meets or exceeds the standard Medicare Part D actuarial value. Since HRAs are employer-funded reimbursement accounts rather than direct prescription drug coverage, CMS considers the actuarial comparison between HRAs and Part D coverage to be incompatible. Consequently, the proposed rule recommends exempting both HRAs and individual coverage HRAs (ICHRAs) from these creditable coverage notice requirements. This adjustment is intended to alleviate administrative complexity for employers and third-party administrators managing HRAs without altering the notice rules applicable to GHPs with direct prescription drug benefits. CMS also notes that under the current framework, Medicare-eligible individuals may receive conflicting notices about their coverage status, causing uncertainty about their enrollment and potential late enrollment penalties. The proposal aims to reduce such confusion and regulatory complexities, aligning with broader deregulation efforts. By removing HRAs from these reporting mandates, CMS expects to streamline compliance while maintaining clarity and integrity for Medicare Part D coverage disclosures.