401(h) vs 401(a): Code Sections, Vehicles, and What Each Actually Covers
401(a) is the umbrella Code section under which most qualified plans live; 401(h) is a specific sub-account feature inside certain of those plans.
Key takeaways
- 401(a) is the Code section establishing qualified-plan requirements broadly.
- 401(h) is a sub-account permitted inside qualified pension or annuity plans.
- Most defined benefit, money purchase, and cash balance plans are 401(a) plans.
- 401(h) only exists as a feature, never as a standalone plan.
401(a) is the foundation
Section 401(a) sets out the qualification requirements for tax-qualified retirement plans — coverage, vesting, funding, distribution, and more. Defined benefit, money purchase, and profit-sharing plans are all 401(a) plans.
401(h) is a feature
Section 401(h) permits a separate sub-account inside qualified pension or annuity plans (which themselves must satisfy 401(a)) for retiree medical benefits. It is a layer on top of a qualifying 401(a) plan, never an independent vehicle.
Why this matters in practice
When advisors talk about a '401(a) plan with a 401(h) account,' they mean a qualified retirement plan with a retiree medical sub-account bolted on per the Code. The architecture matters because every 401(h) compliance question routes back through the underlying 401(a) plan's design.
Frequently asked questions
Availability, tax treatment, and plan design depend on the facts and circumstances of the employer, plan document, participant group, and applicable law. 401h.com provides general educational information only — not tax, legal, actuarial, investment, or ERISA advice. Consult qualified tax, legal, actuarial, and plan professionals.
401h.com Editorial
401h.com
The 401h.com editorial team publishes plain-English explainers on 401(h) retiree medical benefit plans. Educational only — not tax, legal, actuarial, investment, or ERISA advice.
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