CMS Eliminates Disclosure Requirement for Account-Based Plans

Consistent with its earlier proposal, the CMS final rule adopts changes intended to reduce administrative burden by eliminating duplicative or outdated requirements. As part of this effort, CMS is exempting account-based plans—such as HSAs, health FSAs and HRAs (including individual coverage HRAs)—from the creditable coverage disclosure requirements.

 

According to CMS, these account-based plans do not actually offer prescription drug coverage; rather, they are designed to provide savings on health care costs through pre-tax contributions and reimbursements to supplement other coverage, such as another group health plan. CMS explains that requiring these plans to determine if their coverage is creditable and report that status unduly increases administrative burden and could result in confusion for beneficiaries. For example, if an account-based plan discloses that it does not offer creditable coverage (because it does not directly offer prescription drug coverage) and the individual’s plan that directly offers the prescription drug benefit coverage discloses that the benefit is creditable, the individual could receive potentially contradictory and confusing information. CMS notes that this contradiction may ultimately disadvantage Part D Medicare-eligible individuals in making informed choices about their prescription drug coverage.