The Centers for Medicare & Medicaid Services (CMS) recently issued a final rule that exempts account-based plans — e.g., health flexible spending accounts, health reimbursement arrangements (HRAs) (including individual coverage HRAs) and health savings accounts — from having to disclose creditable coverage status for Medicare Part D prescription drug coverage to both individuals eligible for Medicare Part D drug coverage and CMS. CMS initially proposed this change in December 2025 (see CMS proposes eliminating Medicare Part D creditable coverage disclosure requirements for HRAs).
Note that this exemption does not apply to the underlying group health plan, such as a preferred provider organization (PPO) or high-deductible health plan (HDHP), that provides prescription drug coverage.
Employer sponsors of group health plans that provide prescription drug coverage to Medicare Part D eligible individuals must notify these individuals whether the drug coverage they have is creditable (i.e., at least as good as prescription drug coverage offered by Medicare) or non-creditable (not as good, on average, as prescription drug coverage offered by Medicare). Employer plan sponsors must also disclose creditable coverage status to CMS.
Account-based medical plans are no longer required to make creditable coverage disclosures.
Under the final CMS regulation, account-based medical plans are no longer required to make creditable coverage disclosures; as such, they will not need to provide a Notice of Creditable Coverage or Notice of Non-creditable Coverage to plan participants or report creditable coverage status to CMS.
Note, however, that employer plan sponsors of non-account-based group health plans (e.g., PPO or HDHP) offering prescription drug coverage must continue to comply with the disclosure requirements.
The final regulations are effective June 1, 2026, and apply to coverage beginning January 1, 2027.