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
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Who is eligible? |
All employees as designated by employer |
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Who can contribute? |
Employer only |
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Does the balance carry over? |
Yes |
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Can rollover contributions from another account be made to this account? |
Yes, members can roll over funds from an HRA. |
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Is the fund or account portable? |
No |
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Are there interest or investment earnings? |
No |
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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. |
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Are contributions taxable income to the employee? |
No In addition, contributions are not subject to FICA or FUTA taxes. |
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Are distributions ⁄ reimbursements taxable income to the employee? |
No |
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Is the Aetna Performance Network (Aexcel®)* available? |
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.
