|HARTFORD, Conn.-- Industry-Leading Approach Helps Employers and Retirees Better Save for and Finance Medical Expenses.
Aetna (NYSE:AET) announced today an innovative entry in the retiree health care market: the Aetna HealthFund(R) Retiree Reimbursement Account (RRA). The Aetna HealthFund RRA builds on Aetna's strengths in offering consumer-directed product solutions by providing retirees with choice and predictability in funding post-retirement health care expenses. At the same time, it addresses employers' desire for additional or alternative methods of financing retiree health benefits.
According to a Watson-Wyatt study on retiree health benefits, future retirees will shoulder substantially more of the cost of their health care in retirement. Under plans that were common in the 1980s, retirees paid 39 percent of their total lifetime medical cost, with the remainder paid by employers. Under new plans put in place by employers, future retirees will have to pay from 61 to 92 percent of their total lifetime medical cost, if their employers offer a retiree health plan at all.
"As a leader in consumer-directed health benefits, we believe that it is important to offer a variety of options that address consumer needs at different life stages. In keeping with that philosophy, offering a new option to the growing population of retirees is a natural extension of our current portfolio of consumer-directed products," said Russ Fisher, head of National Accounts and Aetna Global Benefits. "The Aetna HealthFund Retiree Reimbursement Account is an innovative solution that's flexible enough to be tailored to a specific employer's needs, while offering retirees a predictable source of health care funds."
Aetna HealthFund Retiree Reimbursement Accounts, a type of Health Reimbursement Arrangement (HRA), are entirely employer-funded. Contributions are made to the employee's account on a regular basis and those funds are then available to reimburse qualified health care expenses in retirement. "Qualified expenses" include insurance premiums, such as those for Medicare or Medigap coverage, as well as medical expenses that satisfy Internal Revenue Service guidelines. The Aetna HealthFund RRA has no age limits around contributions, so employers may choose to continue making contributions even after employees reach retirement.
Employers offering Retiree Reimbursement Accounts have significant control over how the plan is structured. Administration and reporting will be handled by Aetna, which will draw upon its two decades of experience in managing similar products, including flexible spending accounts (FSAs), as well as the newer Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs).
The Aetna Retiree Reimbursement Account joins the suite of retiree products Aetna currently offers, including medical benefits plans that coordinate with Medicare, Medicare Advantage (formerly Medicare+Choice) plans for individuals and employer groups, as well as pharmacy products, ncluding the new Medicare-approved drug discount card, the Aetna Rx Savings Card(SM).
Aetna is one of the nation's leading providers of health care, dental, pharmacy, group life, disability and long-term care benefits, serving approximately 13.3 million medical members, 11.2 million dental members, 8.1 million pharmacy members and 12.4 million group insurance customers, as of March 31, 2004. The company has extensive nationwide networks of more than 618,000 health care services providers, including over 370,000 primary care and specialist physicians and 3,783 hospitals. For more information about Aetna, please visit the company's web site at www.aetna.com.