Regulatory Shift Exempts ICHRAs from Medicare Part D Notifications

The U.S. Department of Health and Human Services proposed a regulation on November 28, 2025, to exempt account-based group health plans from the Medicare Part D-creditable coverage notifications mandate for individuals eligible for Part D.

This regulatory shift could significantly reduce compliance burdens for service providers and sponsors of individual coverage health reimbursement arrangements (ICHRAs), health care flexible spending accounts, health savings accounts, and traditional health reimbursement arrangements.

Streamlining Regulatory Compliance

Currently, the law requires account-based plans to comply with Part D-creditable coverage notices, even though these plans typically do not offer prescription drug coverage. The proposed rule addresses this mismatch, highlighting ICHRAs, which do not usually provide direct prescription drug coverage yet receive notices requiring them to indicate otherwise.

Potential Industry Impact

If implemented, this exemption would remove unnecessary reporting requirements, aligning regulatory compliance more closely with the actual benefits these plans provide. This change could also encourage the development of favorable regulatory frameworks for ICHRAs, reflecting ongoing advocacy from industry stakeholders who seek relief from other mandates, such as the Summary of Benefits and Coverage and Form 1095-B.

The finalization of this rule would streamline operations and mitigate administrative complexities for managing account-based health plans, promoting a more efficient regulatory environment. Industry professionals should monitor these developments to prepare for potential operational adjustments if the rule is adopted.