Retirement Reimbursement Arrangement (RRA)

An HRA for retirees

An Aetna HealthFund® 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

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 contributions taxable income to the employee?

No

In addition, contributions are not subject to FICA or FUTA taxes.

Are distributions ⁄ reimbursements taxable income to the employee?

No

N/A

 

*The Aexcel network is only available in select locations. Aexcel is not available with HMO plans. Aexcel designation is only a guide to choosing a physician. Members should consult with their existing physicians and the specialists they’re selecting before making a decision. Designations have the risk of error and should not be the sole basis for selecting a doctor.

RRAs are subject to employer-defined use and forfeiture rules.

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