For your industry
401(h) for CPAs
A structured framework for CPAs evaluating client fit for a 401(h) sub-account.
CPAs are often the first professional asked whether a 401(h) account makes sense for a client. The questions to ask are usually structural, not promotional — and they tend to follow a consistent pattern.
Why the fit comes up here
Existing qualified-plan posture
A 401(h) account requires a qualified pension plan as the host. CPAs working with profitable, owner-led businesses that already sponsor — or are good candidates for — a DB or cash balance plan are best positioned to spot the fit.
Funding capacity and cash-flow stability
Required contributions are actuarial and ongoing. CPAs are uniquely positioned to assess whether the client's cash flow supports that obligation through cycles.
Coordinated professional team
401(h) decisions sit at the intersection of tax, ERISA, actuarial, and plan administration. CPAs typically convene or coordinate that team.
Key considerations
- Plan-document language and amendments must be specific to 401(h).
- Separate accounting and incidental-benefit testing are ongoing obligations, not one-time events.
- Key-employee rules require careful identification and tracking.
- 401h.com is educational — engage qualified ERISA counsel and an enrolled actuary before any implementation.
Related reading
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.
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.
Next step
Find out whether a 401(h) strategy may fit
Talk with a 401(h) specialist about your plan, participant group, and retiree medical objectives.
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.