401K Question
Hello,
Are you familiar with 401(h) plans? They appear to be plans that help participants pay for medical expenses. A client has a 401(h) plan through their employer. Do you know……When the participant retires or leaves the company are they eligible to roll the balance in their 401(h) plan to an IRA? Basically are 401(h) plans rollover eligible to other retirement accounts?
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2022-08-11 17:58
The 401h plan is a medical savings account, not a form of retirement plan. It cannot be rolled over to an IRA or any type of retirement plan except the cash balance plan it is linked to. But rolling amounts back into the cash balance plan will make those amounts taxable when they are eventually distributed from the cash balance plan. In some respects a 401h is similar to an HSA account, but with much higher contribution limits.