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:
Question | Answer |
---|---|
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 |
RRAs are subject to employer-defined use and forfeiture rules.
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