Question
An HRA for retirees
An Aetna Health Fund® Retirement Reimbursement Arrangement is a great way for companies to play a part in the well-being of their employees after they retire. By providing employer-funded support for health care expenses, an RRA reduces unexpected health care costs and helps retirees better budget their finances. Here's how an RRA works:
- Employers set up and pay into the fund.
- Retired employees use the fund to get reimbursed for qualified health care costs they have paid. These may include premiums and other out-of-pocket costs that have been determined by the employer.
- Any unused balance in the RRA rolls over to the next year.
Frequently asked questions about an RRA
|
|
Answer |
|---|---|
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Who is eligible? |
All employees as designated by employer. |
|
Who can contribute? |
Employer only |
|
Does the balance carry over? |
Yes |
|
Can rollover contributions from another account be made to this account? |
Yes, members can roll over funds from an HRA. |
|
Is the fund or account portable? |
No |
|
Are there interest or investment earnings? |
No |
|
What are the tax advantages? |
Employers may deduct reimbursed employee medical expenses as a business expense; reimbursements are excludable from the employee's gross income. |
|
Are the contributions taxable income to the employee? |
No In addition, contributions are not subject to FICA or FUTA taxes. |
|
Are the distributions / reimbursements taxable income to the employee? |
No |
Question |
Who is eligible? |
|---|---|
Answer |
All employees as designated by employer. |
Question |
Who can contribute? |
Answer |
Employer only |
Question |
Does the balance carry over? |
Answer |
Yes |
Question |
Can rollover contributions from another account be made to this account? |
Answer |
Yes, members can roll over funds from an HRA. |
Question |
Is the fund or account portable? |
Answer |
No |
Question |
Are there interest or investment earnings? |
Answer |
No |
Question |
What are the tax advantages? |
Answer |
Employers may deduct reimbursed employee medical expenses as a business expense; reimbursements are excludable from the employee's gross income. |
Question |
Are the contributions taxable income to the employee? |
Answer |
No In addition, contributions are not subject to FICA or FUTA taxes. |
Question |
Are the distributions / reimbursements taxable income to the employee? |
Answer |
No |
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Legal notices
Aetna is the brand name used for products and services provided by one or more of the Aetna group of companies, including Aetna Life Insurance Company and its affiliates (Aetna).
Health benefits and health insurance plans contain exclusions and limitations.