The Centers for Medicare & Medicaid Services (CMS) has announced an opportunity for public comment regarding its continued collection of information related to Health Reimbursement Arrangements (HRAs) and other account-based group health plans. This notice, published in the Federal Register on July 31, 2026, initiates a 30-day window for stakeholders to provide feedback on the necessity and efficiency of these reporting requirements, which primarily affect state, local, and tribal governmental entities. The move is a routine but significant step under the Paperwork Reduction Act of 1995 (PRA), ensuring federal agencies justify the administrative burden placed on the public.
Evolution of Health Reimbursement Arrangements
In June 2019, a trifecta of federal agencies -- the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (HHS) -- issued landmark final regulations (84 FR 28888). These rules, often referred to as the 2019 final regulations, profoundly reshaped the landscape of HRAs. Their core purpose was to expand the utility of HRAs, particularly by eliminating the long-standing prohibition on integrating them with individual health insurance coverage. This allowed for the creation of Individual Coverage HRAs (ICHRAs), enabling employers to offer employees tax-preferred funds to purchase their own health insurance or pay for Medicare Parts A and B, or Part C.
This regulatory shift, effective for plan years beginning on or after January 1, 2020, aimed to provide greater flexibility for employers and employees in managing healthcare costs and access. It also recognized certain HRAs as limited excepted benefits, known as excepted benefit HRAs, which operate under different regulatory frameworks.
The Mandate for Information Collection
To ensure the proper functioning and oversight of these expanded HRA options, the 2019 final regulations established specific information collection requirements. These include:
- Substantiation requirements for ICHRAs, ensuring that funds are used appropriately for medical care expenses, including premiums (45 CFR 146.123(c)(5)).
- A critical notice requirement for ICHRAs, informing employees about the terms and conditions of their HRA (45 CFR 146.123(c)(6)).
- A notification requirement concerning the termination of coverage (45 CFR 146.123(c)(1)(iii)).
Further adding to the regulatory framework, HHS issued additional final regulations on May 14, 2020 (85 FR 29164), specifically addressing excepted benefit HRAs offered by non-Federal governmental plans. Under 45 CFR 146.145(b)(3)(viii)(E), these plans are mandated to provide a notice detailing eligibility conditions, benefit caps, and a summary of benefits. This notice must be issued within 90 days of an employee's participation and annually thereafter.
Implications for Public Sector Employers
The current CMS notice, identified as Document Identifier CMS-10704 (OMB Control Number 0938-1361), directly impacts state, local, and tribal governments. These entities constitute the "affected public" for this information collection. The continuation of these requirements necessitates ongoing compliance from these governmental bodies, encompassing an estimated 6,354 respondents, resulting in over 1.3 million annual responses and approximately 3,136 total annual hours of administrative burden. The PRA process is designed to solicit feedback on whether this burden is necessary, accurate, and can be reduced.
The Role of the Paperwork Reduction Act
The Paperwork Reduction Act of 1995 serves as a critical mechanism for federal agencies to manage and justify their information collection activities. It requires agencies like CMS to obtain approval from the Office of Management and Budget (OMB) for any collection of information from the public. A key tenet of the PRA is the requirement for agencies to publish notices in the Federal Register, offering multiple opportunities for public comment. This ensures transparency and provides stakeholders a voice in the regulatory process, allowing them to highlight concerns about data collection's necessity, utility, clarity, and potential for technological streamlining to minimize burden.
Opportunity for Public Engagement
The current notice represents a crucial juncture for affected state, local, and tribal governments, as well as other interested parties, to directly influence federal policy regarding HRA reporting. Comments are specifically invited on the necessity and utility of the proposed information collection, the accuracy of the estimated burden, ways to enhance the quality and clarity of the information collected, and methods to utilize automated collection techniques or other forms of information technology to minimize administrative load. The deadline for submitting comments to the OMB desk officer is August 31, 2026. This period offers a vital opportunity for stakeholders to engage with federal regulators and shape the future of HRA administration and oversight.
