What Blue Cross Blue Shield North Carolina Employees Should Know About Their 401(k) Plan

If you’re an employee at Blue Cross Blue Shield of North Carolina, your 401(k) plan is a powerful tool for building your retirement savings. Whether you’re just starting or nearing retirement, understanding your plan helps you make better financial decisions.

How Much Can I Contribute? For 2025, employees can contribute up to $23,500, with an additional $7,500 catch-up if you’re age 50 or older. This is information is accurate to our knowledge as of 10/6/25, but you should confirm it with your HR department and with your tax advisor. We are not your financial advisor (unless you have a written contract with us) and we are not you tax advisor.

What About Employer Matches? BCBS NC typically offers matching contributions to help boost your savings. The match can vary a little bit by BCBS NC entity, but generally it is a 100% match on the 4% of contributions and a 50% match on the next 2%, so basically if you put in 6% of your salary, up to the IRS limits, BCBS will often match 5%, to our knowledge. Matching funds are usually vested immediately.

BCBS North Carolina typically has "non-elective" employer contributions or basically discretionary employer conributions for many employees. You may get these employer contributions without you making contributions to this plan. This non-matching contributions typically vest over a 3 year period as of 10/6/25.

Can/Should I Roll Over My 401(k)? If you leave BCBS NC or retire, you can typically roll over your 401(k) into an IRA or a new employer’s plan.

While this is typically an individual decision, it might be helpful to know what we typically advise our clients to do. Often times if you have a great 401(k) you don't necessarily need to roll it over into an IRA, at least initially. 401(k)s sometimes have better creditor protections than IRAs (depending on where you are residing after you leave BCBS) and generally it is not helpful to roll money from a good 401(k) like BCBS's to a less good 401(k). A less good 401(k) typically won't have a self directed brokerage account which means fewer investment options, and it may have higher fees.

When Can I Withdraw? With some very limited exceptions (look up "hardship withdrawals") it can be very difficult withdraw money from a 401(k) when you are still working there. Once employment has been terminated, you can generally roll money into an IRA and IRAs don't generally require that a withdrawal qualified for a hardship exemption (unlike a 401(k)). But you should know that is you are under 59.5 years old and you take a withdrawal from an IRA or a 401(k), you should expect to pay a 10% penalty plus any income taxes owed on the distribution (because the income is often treated as wages in the year you get the money).

What Are My Investment Options? The BCBS North Carolina 401(k) is first class with excellent low cost index funds as well as a self directed brokerage account. This is pretty much the model for an excellent 401(k) in our view. You should understand that basic mutual funds are okay, but some of the best investments in many 401(k)s are in the self directed brokerage accounts (The Fidelity BrokerageLink Account at BCBS North Carolina).

Mutual funds generally have diversification rules and are selected for 401(k)s not because they are the best investment options per se, but moreso because they fit into categories and check boxes under ERISA (The Employee Retirement Income Security Act) that exempt the employer and investment advisor from liability.

Essentially the investments are selected first because of the liability exempting elements, and second because they can help you achieve your goals.

In our experience very sophisiticated investors do not use the standard mutual funds very much and instead rely heavily on the Self Directed Brokerage Accounts. The Self Directed Brokerage Accounts allows for more customization for your needs, potentially far more productive investment options, and at times lower fees.

But in general to really get the benefits of the Fidelity BrokerageLink Accounts it really helps to be sophisiticated about investing or to work with a fiduciary advisor who can help educate you on the plethora of options available.

How Can I Access and Manage My Account? Generally HR will be able to help get you enrolled in your BCBS North Carolina 401(k) and they are the people to contact.

If you really get stuck you can always contact Michael O'Connor who is the head of total rewards and shared services at Blue Cross Blue Shield North Carolina and his office can get you the information you need. Michael's linkedin is here: https://www.linkedin.com/in/michael-o-connor-cebs-0753ba9

Overall, BCBS North Carolina has an outstanding retirement plan, one of the best in the United States and it can be very beneficial to utilize the full features of the plan.

If you'd like to learn more about Daniel Harris or learn more about our services feel free to click on the following links.

Learn More About My Services