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Level 3

Are retirement healthcare benefits taxable ?

A retirement benefit from my wife's employer pays 90% of our Medicare Advantage account, a total of $18,000 per year.  

Will this benefit be considered income and therefore taxable ?

We are both over 65 yrs old.

7 Replies
Level 20

Are retirement healthcare benefits taxable ?

Is this a Health Reimbursement Arrangement (HRA) where the employer reimburses you for qualified medical expenses that you paid?  If so, the reimbursement is not taxable nor reported on a tax return.  Any medical expenses that you paid and were reimbursed cannot be entered on a Schedule A as an itemized medical expense.

Level 17

Are retirement healthcare benefits taxable ?

best place to check is the employer.   

Level 3

Are retirement healthcare benefits taxable ?

This is not a reimbursement for previous incurred medical costs.

The benefits referred to are to pay our Medicare Advantage account costs.  This is paid by the employer as part of a retirement package.  This is the employer from which my wife has just retired.

Level 20

Are retirement healthcare benefits taxable ?

What Medicare Advantage costs?  The monthly premium, co-pays, deductibles, prescription medication?  Does the former employer pay these fees directly?  If so, how would they know you incur these costs?

 

Since the maximum out of pocket is $6,700 using an Advantage plan, what is being paid to arrive at the $18,000 amount?

 

You really need to contact the plan that provides this benefit and find out if they will be adding this amount to the retirement benefits received and reported on a Form 1099-R.

Level 3

Are retirement healthcare benefits taxable ?

90% of Monthly premiums.  

Highlighted
Level 20

Are retirement healthcare benefits taxable ?

Medicare Part B premiums paid for an Advantage plan are $135.50 per month.  This is an annual charge of $1,626.  If 90% of plan premiums are paid then that would only be $1,463.40.

Where do you come up with $18,000?

Level 18

Are retirement healthcare benefits taxable ?

If your wife's former employer is paying 90% of your Medicare Advantage premiums, and this comes to $18,000/year, then the premiums must be $20,000/year. This is an astonishingly high number for Medicare Advantage premiums, which usually run to less than (often much less than) $300/month. Or is the $18,000 a typo for $1,800?

 

Did your wife receive a W-2 or a 1099-R for the payment made for the Medicare Advantage premiums? If so, which one, and what was on it?