May 2026
Natashia Wright, Director, Benefits Compliance
On April 2, 2026, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule that significantly changes the Medicare Part D regulatory landscape. Under the new guidance, account-based health plans, including Health Reimbursement Arrangements (“HRAs”) and Individual Coverage HRAs (“ICHRAs”), are now exempt from the Medicare Part D creditable coverage disclosure requirements, effective for coverage beginning January 2027. This move marks a departure from the previous framework, which had required these plans to annually notify Medicare-eligible individuals about the actuarial value of their prescription drug coverage.
The final rule establishes that HRAs and ICHRAs are no longer obligated to determine, document, or disclose their creditable coverage status to individuals eligible for Medicare Part D. CMS based this decision on the fundamental nature of account-based medical plans, which provide tax-free reimbursement for medical expenses and insurance premiums rather than direct prescription drug benefits. As such, comparing these plans to Medicare’s standard drug benefit is considered irrelevant. CMS also acknowledged that the former disclosure requirement often resulted in confusing, sometimes contradictory messages for beneficiaries—particularly when individuals received notices from both their account-based plan and a separate prescription drug plan. However, group health plans that do offer prescription drug coverage, regardless of whether they also provide account-based benefits, must still comply with all Medicare Part D notification rules. These changes will go into effect for coverage beginning January 1, 2027, and will give administrative relief to plan sponsors and third-party administrators (“TPAs”) who previously had to provide disclosures for account-based medical plans.
Employer action items
- Employers should continue all existing Part D disclosure requirements through 2026. Notices must still be provided, and CMS disclosures must still be filed as applicable.
- Confirm your 2027 obligations, and once the changes take effect, HRA and ICHRA determinations will no longer be required.
Additional information and resources
For more information
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