Under new proposed regulations, the Centers for Medicare & Medicaid Services (CMS) would stop requiring account-based medical plans, including health reimbursement arrangements (HRAs), 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 aims to reduce administrative burdens for employers and group health plans as well as reduce confusion for plan participants.
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 (i.e., not as good, on average, as prescription drug coverage offered by Medicare). CMS has provided templates for these notices: Notice of Creditable Coverage (NCC) and Notice of Non-creditable Coverage (NNCC).
Group health plans must also disclose creditable coverage status to CMS. The Disclosure to CMS form is completed and sent electronically through the CMS website. If any Medicare Part D eligible individuals fail to maintain creditable coverage for a period of 63 continuous days or more, they will be subject to a late enrollment penalty when they eventually enroll in Part D. So, the NCC may help individuals provide documentation of maintaining creditable coverage to avoid any potential late enrollment penalties.
Under the proposed CMS regulations, account-based medical plans such as HRAs, including individual coverage HRAs (ICHRAs), would no longer be required to provide NCCs/NNCCs to plan participants or report creditable coverage status to CMS. In the preamble to the proposed regulations, CMS states this is because “account-based plans are fundamentally different from prescription drug plans” and "do not actually offer prescription drug coverage.”
