A valuable benefit for retirees
IBM offers eligible retirees a premium subsidy in the form of an HRA. Use these tax-free funds to reimburse yourself for insurance premiums and eligible out-of-pocket expenses, including deductibles, copays and coinsurance.
Get the facts about your Medicare plan options
Learn more about IBM's Medicare plan options, unique benefits and open enrollment in this 2025 education session.
What is a health reimbursement arrangement (HRA)?
An HRA is an employer-funded account that you can use to pay for health care expenses you would normally have to pay for with personal funds.
IBM retiree benefits
IBM offers 2 Group Medicare Advantage plan options under the IBM retiree medical plan.
Frequently asked questions about HRAs
The HRA is a great way to stretch your health care budget. With an HRA, the funds in your account come from IBM. These funds are not considered taxable.
The HRA is a “notional” account tracked for record-keeping purposes only. No actual funds are held in your name, and the account is not portable. When the time comes to pay benefits on your behalf, the money comes out of the Plan Trust or IBM’s operating funds.
HRAs are easy to use for your health care costs.
- Funding your account. IBM will allocate funds to your HRA (if eligible).
- Spending your funds. When you have an eligible health care expense, pay for them with your HRA payment card. Or pay with personal funds and request reimbursement from your HRA. Remember to always keep your receipts.
- Account information. Sign into your account regularly to check your account balance, view transactions and access health education tools.
The amount of the contribution to your HRA is determined each plan year in IBM’s sole discretion as sponsor of the Plan. Please see your plan documents or review the IBM subsidy document for more information.
The HRA is a “notional” account tracked for record-keeping purposes only. No actual funds are held in your name, and the account is not portable. When the time comes to pay benefits on your behalf, the money comes out of the Plan Trust or IBM’s operating funds.
Yes. The HRA is designed to cover expenses not paid by your health plan. It can be used to reimburse a portion of your out-of-pocket medical expenses, such as deductibles, coinsurance and/or copays for you and eligible family members.
Eligible expenses are defined by IRS Code Section 213(d).
Your HRA is accessible through an HRA payment card, which is a convenient way to access account funds. You can also pay for eligible expenses with personal funds and request reimbursement from your HRA.
If you're enrolled in an active UHC plan, you'll be set up with an FHA/HRA plan to use your funds. The FHA/HRA balance will be posted about 6 weeks after your Medicare eligibility date. Before this, the system will show a zero balance.
Example: If your coverage begins on Oct. 1, 2024, allow at least 6 weeks for Optum to receive a contribution balance to load into your plan. If you have an interest-earning account, interest posts on the first day of the following month for active and dormant accounts.
For retirees eligible for the future health account, your HRA will be credited with interest. This will be added to your account on a monthly basis, as long as a balance remains in the account.
The interest rate is:
- Fixed each January 1 based on the average of the annual interest rates on one-year U.S. Treasury Constant Maturities for August, September and October of the prior year
- Rounded to the nearest 10th of a percent plus 1%
For 2025, the annual interest rate is 5.2%, compounded monthly.
January interest is based on the December final balance and posted by Optum.
This amount should appear as a separate line item in your FHA/HRA balance. To see it, click “Account Overview” on the Optum HRA member portal website.
The February interest is calculated based on the January 31 balance, which includes the January balance and interest. Going forward, interest-earning accounts will post on first day of the following month for active and dormant accounts.
The HRA one-time transition credit provided by IBM will expire after December 31, 2024. If the funds go unused by this date, the transition credit will be forfeited. Claims for eligible expenses must be received by Optum on or before December 31, 2024, in order to be reimbursed. There will be no exceptions to receive claim reimbursements from these funds past December 31, 2024. To submit eligible expenses against your HRA Transition Credit, please log in to your Optum HRA account at my.optum.com/ibm.