Accumulated, unused sick and vacation day payout options at retirement got much better. Instead of paying income taxes on those funds when withdrawn, the IRS grants tax-free status on those withdrawals when used for any qualified healthcare expense for the retiree, spouse and dependents
These expenses include health insurance premiums, Medicare and Medicare supplemental plans, co-pays, deductibles, dental visits, prescription or over-the-counter medications, vision care, etc.
When you retire, a portion of those sick/vacation day payouts could be directed to a Funded HRA (Health Reimbursement Arrangement). Those funds are deposited into your individual account and invested in a mutual fund that you choose and control. You will have electronic access to those funds via user-friendly apps and websites.
Any growth from investment performance is tax-free. Fund balances carry over year-to-year and are available to you for any health-related expense. You will be issued a debit card and can arrange for autopay or reimbursement.
To receive this IRS tax-free benefit, your employer need only arrange to work with a qualified HRA plan administrator. Over 1,600 school districts in America already have done so.
[For more information, please contact Larry Stein, OneBridge Benefits, lstein@onebridgebenefits.com, 404-664-6644]