401h.com Editorial

What Is a 401(h) Plan? A Plain-English Guide for Business Owners

A 401(h) account is a separate sub-account inside a qualified pension or annuity plan that may be used to fund retiree medical benefits. Here's the plain-English version every business owner should read first.

401(h) Plan Rules: What Business Owners and Advisors Need to Know

401(h) accounts are powerful but rule-driven. Five buckets — documentation, accounting, incidental benefit, nondiscrimination, and funding — determine whether the structure stands up.

401(h) vs HSA: What's the Difference?

An HSA is an individual, portable account you own. A 401(h) is a sub-account of an employer's qualified retirement plan. They are not substitutes for each other.

401(h) vs HRA: How Retiree Medical Benefits Compare

HRAs and 401(h) accounts can both play a role in retiree medical strategies, but the regulatory homes, funding mechanics, and integration with retirement plans are very different.

Can a Cash Balance Plan Include a 401(h) Account?

Cash balance plans look like account-based plans but are defined benefit plans for IRC purposes — which means they can also host a 401(h) sub-account.

How 401(h) Plans Can Help Fund Retiree Medical Expenses

Pre-funding retiree medical benefits brings discipline to one of retirement planning's biggest unknowns. Here's how 401(h) sub-accounts contribute to that picture.

Who Is Eligible for 401(h) Retiree Medical Benefits?

401(h) eligibility is not generic. It is set by the plan document for a defined retiree class, subject to nondiscrimination and incidental-benefit rules.

401(h) Plan Contribution Limits and Funding Rules Explained

There is no IRA-style number that caps 401(h) funding. Funding is actuarial, ongoing, and constrained by the incidental-benefit ceiling.

401(h) Plans for Small Business Owners: When Do They Make Sense?

401(h) strategies tend to land best with owners who already have — or are deliberately building — a defined benefit or cash balance plan.

Common 401(h) Plan Mistakes to Avoid

Most 401(h) failures trace to the same handful of structural issues. Here are the ones advisors see repeatedly — and how to avoid them.

Can 401(h) Plans Pay Medicare Premiums?

Medicare premiums are a frequent question. The short answer: it depends on the plan's definition of qualified medical expenses and on applicable law.

401(h) Plans for CPAs: Questions to Ask Before Recommending One

Before any 401(h) recommendation lands in a client file, a CPA can stress-test the idea with a handful of structural and contextual questions.