Rules
401(h) rules & requirements.
A high-level overview of the structural rules that govern 401(h) sub-accounts. Specifics always require qualified plan, tax, and ERISA professional review.
Plan document language
The underlying qualified plan must contain provisions that establish the 401(h) account and define the retiree medical benefits to be paid.
Separate accounting
Assets, contributions, and benefits attributable to the 401(h) portion must be separately accounted for from general retirement plan assets.
Incidental-benefit rule
Medical benefits must be subordinate (incidental) to the retirement benefits provided under the plan, on an ongoing basis.
Nondiscrimination
Plan benefits, including 401(h) benefits, are subject to applicable nondiscrimination rules based on the participant group and plan design.
Funding methodology
Funding for the 401(h) portion is an actuarial exercise that ties into the qualified plan's overall funding approach.
Retiree, spouse & dependent coverage
401(h) benefits are designed for retired employees and may extend to spouses and qualifying dependents, subject to plan terms.
Quick check
Is a 401(h) structurally possible for you?
A short, illustrative decision tree. Not a substitute for professional review.
Decision tree
401(h) Eligibility — Quick Check
Question 1 of 5
Is there a qualified pension or annuity plan in place (e.g., DB or cash balance)?
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.