Does anyone have knowledge or experience regarding retiree-only Health Reimbursement Arrangements (HRAs)? Due to some changes to our benefits plan at work, we'll no longer be able to use our 'benefit credit' exactly how we want to. Instead of having a traditional "take it or leave it" benefits package, we are given a set dollar amount per month to elect benefits. This amount is commonly known as our 'benefit credit,' and we were previously given options to spend it in various ways. But changes are coming for 2018, and we're basically given two options:
1) Use $500 of our 'benefit credit' toward employer health insurance monthly premium
2) If not taking employer health insurance, minimum of $500 per month goes into a retiree-only HRA
There's not a lot of information about the HRA so far, other than it's just money that stays with the employer, no investment options or interest earned. Basically it would $6,000 untaxed per year that we can't touch until we leave the employer, and it won't grow.
I'm concerned about the lack of growth, but I am also not sure I want to pay $500 per month for health insurance (vs. getting it cheaper via my state's exchange or possibly my husband's employer). The employer insurance options are pretty high-cost since we are such a small group. I can get coverage in the marketplace for around half of the employer coverage cost (after tax, of course).
So basically it boils down to: would it be better to pay $250/month after taxes for my own health insurance and take the $500 in the HRA each month that will just sit until I leave employment, or take the high cost employer insurance (pre-tax)?