CMS Officially Excludes HRAs, ICHRAs and FSAs From Creditable Coverage Notice Requirements.

Beginning January 1, 2027, a CMS final rule will exclude HRAs, ICHRAs and FSAs from the Medicare Part D creditable coverage notice requirements. CMS' rationale is that these accounts do not directly provide prescription drug coverage, but instead reimburse clients for qualifying medical expenses. By excluding these account-based plans from the requirement, CMS intends to reduce confusion for Medicare-eligible individuals who may have received dual notices in the past. CMS was clear that group health plans that provide prescription drug coverage remain fully subject to the notice requirements even if they also offer an account-based plan. By way of background, each year, employers are required to notify Medicare-eligible employers about whether their employer-sponsored prescription drug coverage is "creditable" or "non-creditable". Employer sponsored coverage is deemed "creditable" if it offers prescription drug coverage that is at least equal to the actuarial value of Part D coverage. For more information on the creditable coverage requirements, visit Tax Facts Online. Read more: Q 354