NU Online News Service, Jan. 29, 2004, 3:35 p.m. EST – Fidelity Investments, Boston, says retirees need retiree health savings plans that would resemble 401(k) plans.[@@]

The average 65-year-old couple that retires today and has no access to an employer-sponsored health plan needs an average of about $175,000 to fund out-of-pocket medical expenses in retirement, according to a new Fidelity report.

Fidelity names the new health reimbursement arrangements and health savings accounts as possible vehicles for saving for retiree health expenses, but it points out that employees cannot contribute to HRAs and that HRAs are not portable.

HSAs are portable, and employees can contribute to HSAs, Fidelity says. But Fidelity says an ideal retiree health savings account would provide post-retirement access to health coverage at group-negotiated or subsidized rates. Holders of HSAs can use the assets to pay for qualified post-retirement medical expenses, but employers do not have to help retired HSA holders find or pay for health insurance.