Proposed HHS Rule Easing Compliance for Account-Based Health Plans

The Department of Health and Human Services (HHS) has introduced a proposed rule on November 28, 2025, aiming to exempt account-based group health plans from issuing Medicare Part D-creditable coverage notices to eligible individuals. This prospective regulatory compliance amendment could benefit providers and sponsors of individual coverage health reimbursement arrangements (ICHRAs), as well as other account-based plans like health care flexible spending accounts (FSAs), health savings accounts (HSAs), and traditional health reimbursement arrangements (HRAs).

Impact on Account-Based Health Plans

The ICHRA sector has actively supported this development, asserting that such notices are unnecessary and often misleading for participants. HHS recognizes that while account-based plans typically fall under general regulatory requirements, they do not provide direct prescription drug benefits. Therefore, the need for creditable coverage notices may not apply. HHS illustrates with ICHRAs, pointing out industry feedback that these notices create confusion due to discrepancies with underlying health insurance plans.

Future Implications for the Insurance Industry

If finalized, this rule would mark a significant improvement for the industry by removing certain technical compliance obligations more applicable to traditional major medical plans. Such regulatory reform could facilitate further supportive legislation or guidelines for ICHRAs. The industry has consistently advocated for reducing burdensome reporting requirements, like those in the Summary of Benefits and Coverage and Form 1095-B. For detailed guidance on specific situations, industry professionals are advised to seek specialized advice.