RMD Roundup: A Few Key Updates About Required Minimum Distributions For Blue Cross Blue Shield Employees

Healthcare Provider Update: Healthcare Provider Information for Blue Cross Blue Shield Blue Cross Blue Shield (BCBS) operates as a federation of independent health insurance companies across the United States. Each individual organization under the BCBS umbrella serves specific geographical regions, offering a range of health insurance products and services, including individual and group health plans, dental and vision coverage, and more. Notable regional affiliates include Blue Cross Blue Shield of Illinois, Blue Cross Blue Shield of Texas, and Blue Cross Blue Shield of Florida, among others, facilitating comprehensive healthcare management and coverage options for millions of members nationwide. Healthcare Cost Increases in 2026 In 2026, significant increases in health insurance premiums are anticipated, particularly for plans available through the Affordable Care Act (ACA) marketplaces. Record hikes, as high as 66% in some states, are expected as a result of rising medical costs, the potential expiration of enhanced federal premium subsidies, and aggressive rate adjustments by major insurers like Blue Cross Blue Shield. The Kaiser Family Foundation warns that a staggering 92% of marketplace enrollees could see their out-of-pocket premiums surge by over 75% due to this confluence of factors, which will likely price many middle-income Americans out of affordable health coverage. Click here to learn more

As we approach the end of 2022, now might be a good time for Blue Cross Blue Shield employees to take a closer look at a few developments surrounding required minimum distributions (RMDs) for corporate employees in the United States.

What Are RMDs?

We'd first like to ensure that our Blue Cross Blue Shield clients understand the basics— What are RMDs? Once you reach age 72, you are required to take minimum distributions from your traditional IRAs and most employer-sponsored retirement plans. (RMDs are not required from an employer plan if you are still working at the company sponsoring the plan and you do not own more than 5% of the company.) You can always take more than the required amount if you choose.

The portion of an RMD representing earnings and tax-deductible contributions is taxed as ordinary income, unless the RMD is a qualified distribution from a Roth account. We'd like our clients from Blue Cross Blue Shield to note that failing to take the full amount of an RMD could result in a penalty tax of 50% of the difference.

Generally, RMDs must be taken by December 31 each year. You can delay your first RMD until April 1 following the year in which you reach RMD age; however, it's important that these Blue Cross Blue Shield employees be aware that you will then need to take two RMDs in one year — the first by April 1 and the second by December 31. (If you reached age 73 in the first half of 2022, different rules apply; see below.)

You may want to weigh the decision to delay your first RMD carefully. Taking two distributions in one year might bump you into a higher income tax bracket for that year.

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