New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

The ABCs of 401(h) Plans For Frontier Communications Employees

Healthcare Provider Update: Healthcare Provider for Frontier Communications Frontier Communications typically partners with large insurance companies for their employee healthcare plans. As of 2025, the primary provider for Frontier Communications is UnitedHealth Group, which offers a variety of health insurance plans catering to the organization's workforce. Potential Healthcare Cost Increases in 2026 In 2026, health insurance premiums are projected to soar, with many states experiencing increases that could exceed 60%. The combination of rising medical costs and the potential expiration of enhanced federal premium subsidies is expected to drastically impact consumers. Specifically, over 22 million individuals enrolled in Affordable Care Act (ACA) marketplace plans may see their out-of-pocket premiums rise by more than 75%. As insurers like UnitedHealthcare and Anthem announce substantial rate hikes, the financial strain could leave many families facing unaffordable coverage options, further complicating access to necessary healthcare services. Click here to learn more

'Employees of Frontier Communications companies who are about to retire should understand the benefits of 401(h) plans as it is a good way to reduce the tax liability and to secure the medical costs for themselves and their families thus ensuring a better approach to the healthcare in retirement.'

It is important for Frontier Communications retirees to understand the structure of 401(h) plans because the moneys that can be contributed and the time that can be saved on medical expenses will help to decrease the impact of the increasing healthcare costs and will help to establish a solid financial situation for the retirees and their families.'

In this article we will discuss:

1. The effects of the rising medical costs on health insurance premiums in 2023.
2. Basic information about 401(h) eligible retiree medical benefit accounts for Frontier Communications companies' employees.
3. The pros and cons of using 401(h) plans for healthcare and retirement purposes.

The average increase in premium that health insurance plans have requested for 2023 is 10%; some plans have asked for an increase of between 5 and 14 percent. However, this year, 72 providers submitted their plans, and only four of them show a reduction in the prices. This is because the cost of health care is rising.

In their submissions for 2023, many insurers expect that the cost of health care will rise by 4 – 8 percent. The behavior of the costs reflects the prices that the plans pay for hospitals, doctors, and drug makers because of the inflation and the prices that the plans expect the patients to incur in the following year. The Frontier Communications company employees who are eligible for 401(k) plans should learn how to optimize it to the maximum extent. Here is a summary of the most important information about these plans:

Summary of Discussion:

Retirees of Frontier Communications should know that it is a retiree medical benefit account that is established within a defined benefit pension plan to pay benefits for illness, accident, and hospitalization for retired employees, their spouses, and their dependents. It is essential to comprehend that Sections 401(h)(1)-(6) of the Internal Revenue Code must be met in order for payments to be made.

Education

Internal Revenue Code section 213(d) defines medical expense as amounts paid for medical care (1). This includes costs related to:
I. Transportation mainly for and necessary to medical care, qualified long term care services or insurance (including Medicare Part B premiums and qualified long term care insurance premiums).

It is important for retired Frontier Communications employees to know that the language of the plan document determines the schedule of distributions, the scope of coverage, and who is eligible for the plan. A 401(h) account cannot have discrimination in coverage, contribution, and benefit in favor of officers, shareholders, supervisory employees, or highly compensated employees. A 401(h) contribution is not permitted to exceed the total cost of providing the benefits, which must be amortized over the duration of prospective service.

In compliance with Section 1.401-14(c) of Treasury Regulation 1.401, a qualified 401(h) account must provide:
Pension benefits must take precedence over retiree medical benefits. The 401(h) medical benefits of the retirees must be placed in a separate account in the pension trust.

Except for key personnel, the account for the benefits of the employee, or the employee’s spouse or dependents, must be held in a separate account. Furthermore, this account can only be used to pay for the employee’s medical benefits. The contributions from the employer to the account must be reasonable and quantifiable.

Contributions to 401(h) accounts made during or after the tax year must be used to pay for medical plan benefits. These contributions are non-transferable and cannot be used for any other purpose. Furthermore, the plan must provide that any balance remaining in the 401(h) account must be reversed to the employer at the time of liquidation of the plan’s obligations for the retiree medical benefits.

Frontier Communications retirees should be aware that the subordination requirement is incomplete until the plan demonstrates that the total contributions for retiree medical benefits do not exceed 25 percent of total contributions. The 25% includes the actual contribution to the life insurance part of the plan (but excludes the contribution to fund past service credits).

This restriction is meant to ensure that medical contributions are subordinate to pension contributions. It is also important for Frontier Communications retirees to know that plan sponsors with overfunded, terminating defined benefit plans are allowed to make tax-free contributions (known as) to the related 401(h) accounts. Furthermore, there are restrictions that need to be taken into account, namely the amount transferred is not considered as a taxable reversion. The provision expires on December 31, 2025, or the asset transfer occasioned by December 31, 2025.

The Positives of 401(h) Plans

Deductible:

Employers can claim deduction on their tax returns up to a certain limit. There is no provision for the arrangement to be made for contributions that are beyond the total benefits cost.
Benefit is tax-free for retirees.

The funds are taxed on the way out, and the distributions are tax-free if they are made for the purposes of medical expenses.
The amount that can be contributed annually to the plan by employers is not restricted and can be anything from zero to 25%. They are not required to contribute, but they have the option to do so.

Frontier Communications employees who are interested in the possibility of maximizing their retirement benefits may be interested in knowing that contributions made to 401(h) accounts can be used to pay for qualified medical expenses that include spouses and children, and dependents. This enables retirees to go beyond the healthcare needs of the 401(h) plan and use the funds to support the medical costs of their relatives and friends. As we explained above, 401(h) plans are tax-compliant and flexible, and when used correctly, they can help retirees design a sound healthcare strategy that includes their families.

The Drawbacks to 401(h) Accounts

The plan itself is complicated and comes with expensive setup and management fees. Because it is not an IRS-approved plan, it operates with more time, administration, and supervision needed.
Employers have to keep the account open until all the retirees have used up their medical account benefits.
Actuaries are often needed to manage and supervise the account, but they can be hard to find.

The conclusion of the Pharmaceutical and Biotechnology Association (BPIA) indicated that its members raised the prices of arthritis and cancer medicines and other prescriptions by 5.6% at the beginning of this year. This means that a Frontier Communications retiree with a 401(k) may be in a better position (h). Furthermore, a large number of pension plan sponsors may be inclined to fund retiree medical costs through 401(h) accounts. Frontier Communications employees who are considering this plan are entitled to employer and/or employee contributions, as well as transfers of excess pension benefits, if permitted by the plan terms.

The contributions are deductible, the earnings are taxed on the accrual basis, and the withdrawals are tax-free for 401(h) accounts. Those Frontier Communications retirees who are not very sure how their 401(h) works may benefit from seeking professional financial advice. We at The Retirement Group will help you get a free cash flow analysis and talk to a consultant who will help you identify which decision is most appropriate for you.

Anybody, whether male or female, can be compared to a chef in the kitchen. The chef has the responsibility of preparing meals for his guests and therefore has to make sure that everyone gets the food that they want. The chef also knows that the enjoyment of the meal is not only limited to the consumer’s plate but also the company’s plate as well. In this analogy, the chef represents the Frontier Communications employees who are about to retire while the meal represents their retirement benefits. Just as the chef takes into account the diverse tastes and preferences of the guests, Frontier Communications employees must consider the overall needs of their retirement.

Featured Video

Articles you may find interesting:

Like a buffet, the 401(h) plan is a menu of choices that can help the financial health of the employee and his or her dependents. With each course as a different aspect of their retirement plan, from pension benefits to medical expenses, the chef prepares the meal to ensure everyone gets something out of it. In the same manner, Frontier Communications employees can choose the various components of the 401(h) plan to develop a full retirement plan that will benefit not only their financial situation but also that of their families. In the same manner that the chef’s attention to detail will improve the overall experience of the meal, the proper application of a 401(h) plan can positively affect the career of a Frontier Communications employee and his or her family

Sources:

1. Health Affairs. 'Health Insurance Premiums: Average Family Premium Hits $23,968 in 2023.' Health Affairs , 2023, healthaffairs.org/doi/10.1377/hlthaff.2023.00996 .

2. MissionSquare Retirement. '401(h) Retiree Health Account.' MissionSquare Retirement , missionsq.org/products-and-services/401%28h%29-retiree-health-accounts.html .

3. Groom Law Group. 'IRS Rules that Payment of 401(h) Account Benefits to Pension-Eligible Active Participants Won't Jeopardize Plan Qualification.' Groom Law Group , 2023, groom.com/resources/irs-rules-that-payment-of-401h-account-benefits-to-pension-eligible-active-participants-wont-jeopardize-plan-qualification .

4. American Society of Pension Professionals & Actuaries. 'Retiree Health Accounts Under Section 401(h).' ASPPA , 2019, asppa-net.org/news/2019/4/retiree-health-accounts-under-section-401h .

5. Emparion. 'Pros and Cons of 401(h) Accounts Plans.' Emparion , 2023, emparion.com/pros-and-cons-of-401h-accounts-plans .

How does Frontier Communications Corporation determine the eligibility and participation criteria for employees in the pension plan? What are the key components that employees should be aware of in terms of service hours and years of service that can impact their pension benefits?

Frontier Communications Corporation determines pension plan eligibility based on employees' transfer from Verizon, crediting prior service under the Verizon Pension Plan to the Frontier Plan. Employees must meet the eligibility and service requirements, including hours of service and years of service, which are integral to calculating accrued benefits. The pension plan specifies that employees' service prior to the transition is recognized for determining their benefits under the Frontier plan(Frontier_Communications…).

In what ways does Frontier Communications Corporation ensure that employees transitioning from Verizon retain their accrued benefits under the new pension plan? Can you elaborate on how prior service will be accounted for under the Frontier Plan and any potential challenges that may arise in this process?

Employees transitioning from Verizon to Frontier retain their accrued benefits, with prior service credited under the Frontier Pension Plan. This is facilitated by a "Mirror Plan," which ensures that benefits under Verizon’s plan are transferred without reduction. Prior service is critical to the calculation of benefits and will continue under the Frontier Plan. However, challenges may arise regarding understanding the precise terms of service credits post-transition(Frontier_Communications…).

How does the merger of the Verizon pension plans with the Frontier Communications Corporation Pension Plan affect employeesâ€™ future benefits? What measures are put in place to ensure that Former Verizon employees receive benefits that are at least as favorable as those they previously had?

The merger of Verizon pension plans into the Frontier Communications Pension Plan guarantees that former Verizon employees receive benefits that are at least as favorable as those they had under the Verizon plan. The benefits accrued under Verizon are preserved, and future benefits are determined similarly, subject to Frontier’s amendments(Frontier_Communications…).

What resources are available for Frontier Communications Corporation employees to access more detailed information regarding their pension plan benefits? How might these resources assist in understanding the changes post-merger with Verizon?

Frontier provides detailed pension information through resources such as the Milliman Benefits Service Center. Employees can access these resources to better understand the impacts of the merger and ensure their benefits remain intact. The Summary Plan Description (SPD) and Summary of Material Modifications (SMM) provide employees with comprehensive updates post-merger(Frontier_Communications…).

Can you explain the process and implications for employees at Frontier Communications Corporation if they decide to appeal a denied pension claim? What steps must they take, and how does the appeals process ensure compliance with ERISA regulations?

If an employee’s pension claim is denied, they may appeal by submitting a written claim to the Plan Administrator, with additional documentation if requested. The appeals process ensures compliance with ERISA regulations, offering employees multiple review stages to reconsider denied claims(Frontier_Communications…).

How does Frontier Communications Corporation communicate updates to its pension plan practices to employees? Are there specific intervals or methods by which changes are shared, and how can employees keep abreast of these changes?

Frontier communicates pension plan updates to employees through various channels, including formal documents like the SMM and SPD. Updates are typically distributed periodically, with critical changes communicated as needed. Employees should regularly check for updates to stay informed(Frontier_Communications…).

In the context of financial planning for retirement, how do past benefits from the Verizon pension plans get integrated into the existing Frontier Communications Corporation pension framework? What advice can be given to employees regarding their financial health as they approach retirement?

Past benefits from the Verizon pension plan are integrated into Frontier’s pension framework through the transfer of assets and liabilities. Employees should review their benefit statements and consult financial planning resources to ensure a smooth transition and optimize their retirement strategy(Frontier_Communications…).

What roles do the Milliman Benefits Service Center and the Claims Review Committee play in supporting the employees of Frontier Communications Corporation regarding their pension claims? How can employees engage with these entities for assistance?

The Milliman Benefits Service Center supports employees with pension inquiries, while the Claims Review Committee handles appeals. Employees can contact Milliman for questions and submit appeals to the Claims Review Committee if disputes arise over benefits(Frontier_Communications…).

As an employee of Frontier Communications Corporation, what should be understood about the standard forms of pension payments available at retirement? How do these options impact the total benefits an employee may receive over time?

Frontier employees should understand the available pension payment options, including annuities and lump-sum distributions. These options affect the total amount received, and employees should consider their long-term financial needs when selecting a payment method(Frontier_Communications…).

How can employees contact Frontier Communications Corporation for more information about their pension plan? What are the best practices for reaching out and ensuring that their inquiries are handled efficiently?

Employees can contact Frontier regarding pension plans through the Milliman Benefits Service Center by phone or via their online portal. It is recommended to prepare inquiries with relevant documentation to ensure efficient handling(Frontier_Communications…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Frontier Communications offers both a pension plan and a 401(k) savings plan for its employees. The Frontier Communications Pension Plan is designed for veteran employees, particularly those in bargaining units, and is structured to provide retirement benefits based on years of service and compensation. Employees must generally have completed five years of service to become vested. The pension formula involves a standard calculation of a fixed amount per year of service. Frontier allows eligible participants to elect a full lump sum if they retire after March 1, 2022, due to the plan’s improved funded status of 91% as of February 2022 (CWA 1298). In addition to the pension, Frontier offers the Frontier Communications 401(k) Savings Plan, which is available to all employees, with specific vesting and matching rules. The company uses Fidelity to manage this plan and offers a match of up to 6% of the employee’s contributions (CWA 1298). Matching contributions are subject to a vesting schedule that requires several years of employment before the company contributions are fully vested. Employees can contribute on a pre-tax or post-tax basis, depending on their financial strategy.

Restructuring and Layoffs: Frontier Communications has undergone significant restructuring efforts, including layoffs as part of its strategy to streamline operations and reduce costs. In recent reports from 2023-2024, the company has been focusing on reducing its workforce to improve efficiency and focus on core business areas. This restructuring is crucial to understand given the current economic climate, where companies are reassessing their operations to stay competitive. The economic environment and evolving market demands are driving such changes, and it’s important for stakeholders to stay informed about these developments. Benefit and Pension Changes: Frontier has also made adjustments to its employee benefits and pension plans. Recent changes include alterations to retirement benefits and 401(k) contributions as part of its broader cost-cutting measures. These changes reflect broader trends in the industry where companies are re-evaluating their benefit structures in response to economic pressures and shifting regulatory environments. Keeping up with these changes is essential for employees and investors alike, given the current tax and political landscape that influences corporate benefit strategies.

Frontier Communications typically offers stock options to executives and senior management. These options grant employees the right to purchase Frontier Communications' stock at a predetermined price within a specified period. The company usually sets performance targets that must be met for options to vest. RSUs: Frontier Communications provides RSUs to various levels of employees, including senior management and other key contributors. RSUs are granted with specific vesting schedules, often based on tenure or performance milestones. The vesting of RSUs is generally linked to continued employment with the company. Specific Information by Year

Frontier Communications Health Benefits 1. Official Company Website: Frontier Communications Careers: Health benefits are listed on their career page, providing information about the types of insurance, eligibility, and plan details. Company Newsroom: Check for any press releases or news related to changes in health benefits or employee healthcare initiatives. 2. Employee Review Websites: Glassdoor: Employee reviews often include information about health benefits and satisfaction with healthcare coverage. Indeed: Look for company reviews and benefits summaries from current or former employees. 3. Benefits Review Websites: Payscale: Provides detailed reports on employee compensation and benefits, including health insurance. Comparably: Offers insights into company benefits, including health insurance plans and employee satisfaction. 4. News Outlets: Business Insider: Check for any articles or news reports related to changes in employee benefits at Frontier Communications. Reuters: Look for any updates or news stories related to employee health benefits. 5. Industry and Financial News: Forbes: Search for any relevant articles discussing health benefits changes or company policies affecting employees. Bloomberg: Look for reports on Frontier Communications’ employee benefits and any associated financial impacts.