• In order to make or receive tax-free contributions to a Health Savings Account (HSA), an individual may not have “disqualifying health coverage.”
  • Disqualifying coverage is coverage that pays for or reimburses medical expenses before an individual meets the minimum deductible for coverage under a High Deductible Health Plan (HDHP).
  • Examples of coverage that may disqualify an individual from making or receiving HSA contributions are general-purpose Health Flexible Spending Accounts (HFSA), Medicare, certain onsite health clinics, and certain telemedicine programs.
  • Employers providing HSA contributions are responsible for determining that employees are not covered by any HSA-disqualifying coverage sponsored by the employer.
  • Clear communications about HSA qualifications and safeguards for preventing enrollment in HSA-disqualifying coverage are essential for avoiding HSA eligibility issues.


The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) requires employers that offer prescription drug coverage to disclose to CMS whether the coverage is at least as good as Medicare Part D coverage (in other words, whether the coverage is “creditable”) or if it is “noncreditable” in comparison to Medicare Part D. The disclosure must be submitted to CMS on an annual basis, or upon any change that affects whether the coverage is creditable.


At a minimum, the creditable (or non-creditable) coverage disclosure notice must be provided to CMS at the following times:

  • Within 60 days after the beginning date of the plan year for which the entity is providing the form (e.g., March 1 for plans with plan years beginning January 1, 2019);
  • Within 30 days after the termination of the prescription drug plan; and
  • Within 30 days after any change in the creditable coverage status of the prescription drug plan.


The disclosure notice to CMS is submitted through completion of the disclosure form on the CMS Creditable Coverage Web Page. On-line submission is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies. The web page also includes links to guidance and instructions for completing the submission.


In addition to the CMS disclosure, plan sponsors must notify individuals who are eligible for Medicare Part D whether their prescription drug coverage is creditable or non-creditable. The Medicare Part D notice must be provided on an annual basis prior to October 15 and at certain other designate times. For more details about the Medicare Part D notice requirement, see EPIC’s Compliance Alert from September 2018 (PDF).


Plan sponsors should be prepared to disclose to CMS the creditable or non-creditable status of their prescription drug coverage within 60 days after the start of the plan year, and in the event of any change in the status of the drug coverage that may occur at other times during the plan year.


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EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.


Compliance Alert (PDF)