HRA vs RHA – Are you confused?

United Airlines offers both a Health Reimbursement Account (HRA) and a Retiree Health Account (RHA) to its employees.

HRA

A Health Reimbursement Account (HRA) is an employer-funded account that reimburses employees for qualified medical expenses. HRAs are a tax-advantaged benefit, meaning that contributions to the account are tax-deductible for the employer and tax-free for the employee. The HRA is available to pilots and other employees at United Airlines. It is funded by United, and the funds can be used to pay for eligible medical expenses, such as deductibles, copayments, coinsurance, prescriptions, and dental or vision expenses. United Pilots can submit claims for reimbursement of eligible expenses online or via mail, and funds are typically available within a few business days.

The amount of money contributed to the HRA by United varies based on a few different factors. Each pay period United payroll will deduct the appropriate contribution. If you are enrolled in a United Airlines medical plan, United will contribute $1 per hour to your HRA. Additionally, any excess United contributions above the 401(a)(17) limits (excess 401(k) contributions from United) will be deposited into the HRA.

In addition to the contributions each pay period, the value of your account will be adjusted on a quarterly basis on the overall investment performance of the plan. Assets in the HRA plan are invested conservatively to protect principal, but it is still possible for the fund to lose value. Any gains made in the HRA are tax-free.

Twice a year, a sweep will be performed to move money from the HRA to RHA Plan. These sweeps will occur in January and June of each year. Balances in excess of $15,000 at the time of the January sweep will be moved to the Pilot RHA plan. Balances in excess of $5,000 at the time of the June sweep will be moved to the Pilot RHA plan. Pilots are not able to elect how much money can be moved to the RHA plan.

RHA

A Retiree Health Account (RHA) is a type of health reimbursement arrangement that is designed to provide health benefits to retired employees. The RHA is available to United Pilot retirees.  It is funded by United and can be used to pay for eligible medical expenses, such as premiums for Medicare Part B and D, Medigap policies, and long-term care insurance. The amount of money contributed to the RHA by United varies. Retirees can submit claims for reimbursement of eligible expenses online or via mail, and funds are typically available within a few business days.

It is important to note that the specific rules and regulations governing United’s HRA and RHA can be complex. Employees and retirees should consult with their employer or plan administrator to understand the specifics of their HRA and RHA and how it can be used to pay for their medical expenses.